Top 5 stories from Manufacturing Dive

Manufacturing is shooting past its pre-pandemic norms. 

The industry, aided by both massive private and public investments, has seen huge gains in employment and capital spending on new projects in the last five years. 

Employment reached 13 million as of January 2024, while the number of manufacturing establishments in the U.S. rose by more than 11% between the first quarter of 2019 and the second quarter of 2023, reaching 393,000. 

And yet, the industry is staring down a major obstacle to all that growth — labor. 

An April 2024 report from Deloitte and the Manufacturing Institute claims that manufacturers could need as many as 3.8 million new workers by 2033. Roughly 1.9 million of those could go unfilled if current labor gaps remain unsolved. 

Check out our five top takeaways from the report on the industry's impending job gap and companies’ efforts to address it. 

1. Manufacturers need workers at every level, but especially in technical roles

In reviewing five years of job posting data, researchers found a 75% jump in demand for simulation and simulation software skills, mainly for technology-enabled production or testing roles. These technical roles that can leverage the integration of connected devices, equipment and systems are likely to grow the fastest between 2022 and 2032, according to the report. 

The number of industrial machinery maintenance technicians, which made up 270,000 manufacturing workers in 2022, are slated to jump by 16% by 2032. And in production roles, the fastest-growing segment is for highly technical roles, such as semiconductor-processing technicians and electronics and electromechanical assemblers. 

2. Higher education needs to adapt to changing demands

Across the country, the number of associate degrees awarded has stagnated over the past decade as more people turn to certificates as an alternative option to gain training for skilled trades. 

The report found that the average growth in certificate awards was more than four times the growth in associate degrees for manufacturing-related programs between 2011 and 2022. 

That shift is in line with the Biden administration's push for the industry to offer more jobs that don't require college degrees.

But while certificates could help grow the talent pool for foundational industrial knowledge, the report claims that it could leave a gap in those qualified for higher level technical roles. 

It begs the question of how colleges continue to prove the vitality of bachelor's and associate's degrees in fields like computer and information sciences and engineering, which can help give individuals the technical skills companies need. 

3. Workers want flexibility — or they'll look elsewhere

Gen Z and millennial workers are more likely to switch jobs than previous generations. 

Like in many industries, companies are finding flexibility and remote-work options are two of the most impactful ways to attract and retain employees. Nearly half of survey respondents noted that flexible work arrangements, including flexible shifts, shift swapping or split shifts, is a strategy they've used successfully to retain workers. 

In addition to flexible schedules, workers also want affordable and available childcare. The issue has become so important that more companies are beginning to offer it onsite or to subsidize childcare costs. 

Above all though, companies listed competitive benefits as the best way to attract and retain employees. This could include not only competitive wages but paid time off, robust health care and ample parental leave. 

4. Manufacturers prioritize training to keep workers

Companies are focusing more on training and re-skilling workers in a bid to keep them on the job. Many are offering mentoring and rotational programs for new hires to help them receive well-rounded skills development. 

In addition, internal training programs are proving vital to help employees adapt to new technologies, according to the report. Skills assessments are then helping employees to track their progress. 

Manufacturers can also leverage digital tools like tablets and smartphones to do on-the-job training and performance maintenance. 

5. Companies need to "broaden the aperture" on the talent pool

Manufacturers are increasingly partnering with community organizations and educational institutions to recruit workers. Nearly all of those surveyed said they are forming at least one partnership to improve recruitment and retention, and many are partnering with four or more organizations. 

At the same time, Manufacturing Institute President and Executive Director Carolyn Lee noted in an interview that companies need to "broaden the aperture" to look at more populations and communities across the U.S. to bring people into the industry. This could include people such as mothers who left the workforce during the pandemic, refugees, formerly incarcerated individuals or those with cognitive disabilities. 

"How do you bring people who are on the sidelines back in and what are the pathways?" Lee said. "There is this broader vision around what you need to do to be able to attract and retain that workforce.”

Manufacturers across the U.S. are leaning into artificial intelligence as a pivotal aspect of business growth. It’s not surprising then that 87% of those surveyed in a Deloitte report on AI in manufacturing have adopted the technology or plan to do so in the next two years. 

However, a key challenge to implementing AI is training a workforce to leverage the technology, especially factory-level employees. A 2023 Boston Consulting Group study found that only 14% of frontline workers say they have received AI upskilling, compared to 44% of leaders.

“While approximately 70% of the current US workforce is concentrated in frontline roles that are seeing an increase in the demand for AI proficiency, AI skilling offerings to date have been almost exclusively geared toward non-frontline populations including roles like data scientists, executives, and engineers,” said Matthew Daniel, senior principal for talent strategy at Guild, a workforce training organization.

As more manufacturers navigate upskilling workers to use AI in everything from R&D to assembly and maintenance needs on the factory floor, here’s how some companies are tackling the workforce training challenge. 

Online programs can offer workers flexible training

Offering training that can help workers upskill to leverage AI in their daily functions is a key way companies can ease anxieties in workers around the technology replacing their jobs, Daniel said. Doing so could be key for companies, as 36% of respondents in BCG’s study believe their job could be eliminated by AI.

“Organizations should proactively create avenues for employees to upskill with AI and reframe the narrative to not fear AI and the unknown but to showcase what's possible — their workforce leading, adapting, and adding unprecedented value.”

Workforce training organization Guild offers bundled AI training programs focused on related topics, such as AI literacy and ethics, workplace applications, technical programming and executing AI-driven strategies. 

The programs are fully online and offer a flexible schedule so frontline workers can participate without disrupting work. Online training options that fit into the workflow of employees can make the process easier for individuals to tackle.

“It's not just about adapting to AI — it's about empowering the frontline workforce to thrive alongside it and giving them the tools and resources to do so,” Daniel said. 

Leveraging digital tools to upskill workers

Upskilling is important for workers that may not be familiar with AI or other digital tools, said Bill Rokos, chief technology officer at Parsec Automation Corp., an organization working with more than 11,000 manufacturing companies to integrate AI into their workflows.

“For many floor workers, powerful tools like the Internet of Things, automation and digitalization are brand-new concepts,” Rokos said.

Augmented reality, virtual reality and other digital resources can offer helpful simulation platforms for workers to practice these new skills. 

“Using augmented reality and virtual reality, manufacturing leaders can provide workers with on-the-job training and enable them to learn new skills in a safe and controlled environment,” Rokos said.

That’s exactly what digital solutions firm UST is doing. The company is using the metaverse as a virtual training environment with gamified learning to teach how to use AI for tasks like data analysis, predictive maintenance, quality control and optimization. 

“We simulate real-world scenarios and problem statements in a virtual world and get workers to solve complex problems with a higher level of retention due to experiential learning,” said Ramya Kannan, vice president and industry head of manufacturing at UST. “The metaverse provides an interactive and immersive learning experience.”

This kind of learning also allows for easy collaboration and real-time communication between multiple workers and trainers.

“We can share feedback, add learnings from mistakes back into the training program and constantly improve the experience,” Kannan said.

Manufacturers are also using “AI-powered predictive maintenance, which analyzes equipment sensor data to forecast maintenance needs to reduce operational downtime, improve equipment reliability, and enhance worker productivity,” Rokos said. 

Many of these training programs, whether online or in-person, focus on safety and control, ensuring workers know how to protect company data as operations become more connected, according to a recent report from the National Association of Manufacturers. 

”The most effective AI models are humancentered, allowing them to learn and unlearn, continuously improving to meet the needs of their human operators,” the report said. 

For the last 50 years, Semicon West, one of the microelectronic industry’s biggest conferences, has been held in the San Francisco area. However, for the first time since its inception, next year it’s moving to Phoenix, Arizona, as the area becomes a hub for semiconductor manufacturing.

“Greater Phoenix is home to more than 75 semiconductor companies including SEMI members EMD Electronics, Intel, and Taiwan Semiconductor Manufacturing Company,” Joe Stockunas, president of SEMI Americas and host of the event, said in a statement announcing the change.

In just the last four years, the Phoenix metro area saw 14 major manufacturing announcements and was ranked number one in the U.S. for manufacturing construction.

Arizona’s semiconductor storyline begins in 1949, when Motorola opened a research lab in Phoenix that later manufactured transistors, a type of semiconductor, Phoenix Mayor Kate Gallego said in an email. Then, ASM came to Phoenix in 1976, followed by Intel opening its first semiconductor factory in Chandler in 1980, becoming one of the state's largest employers.

As major players in the industry started accumulating here, related companies and suppliers followed, building a strong manufacturing ecosystem in the region.

In May 2020 TSMC added to this mix, with plans to build three fabs in Arizona worth a combined $65 billion, the largest foreign direct investment in the state’s history.

Talent pipeline creates a draw

The state’s efforts and incentives to attract manufacturers combined with one of the nation’s strongest talent pipelines in the semiconductor industry, have helped draw mega projects like TSMC’s to Arizona, according to the chipmaker.

“As we were considering different sites in the U.S., the Arizona team made a strong impression with their preparedness and understanding of the range of issues and criteria for our decision,” a TSMC Arizona spokesperson said. “The team assembled included top elected leaders in city and state government, economic development, utilities, and higher education.”

Gallego said the state’s partnership with Arizona State University and the school’s growing engineering program were some of the top reasons for “getting TSMC to commit to Phoenix,” the mayor said in an email.

“ASU is a major partner on workforce development initiatives and is helping bridge the gap between when new technology is invented and when it’s made and deployed,” Gallego said.

The state has also partnered with Maricopa Community Colleges, where it sponsored the Route to Relief program and Semiconductor Quick Start courses, which aim to introduce people to the possibilities in the semiconductor manufacturing and trade industries.

“In partnership with the state, industry, and federal government, the City also launched a Registered Apprenticeship program, the first of its kind in the country, to help train the next generation of semiconductor technicians,” Gallego said.

TSMC plans to invest $5 million to train 80 facility technician apprentices over five years. The pilot program was launched with a cohort of eight facilities technician apprentices, all of whom have become full-time TSMC employees and will be a part of an 18-24 month program consisting of on-the-job training and classroom instruction, according to the company spokesperson.

The company plans to expand the program to other fab technician roles beginning next year.

Where manufacturers go, suppliers follow

With the growing support of state and city officials, a rapidly developing talent pipeline and the increasing impact of major projects like the TSMC fabs, the area is seeing a “massive influx of semiconductor-related companies completing the industry supply chain,” said Chris Camacho, president and CEO of the Greater Phoenix Economic Council.

“GPEC has since located 39 semiconductor-related companies to the region, creating more than 7,700 jobs and over $37 billion in capital investment,” Camacho said.

One such company is Benchmark Electronics, which builds equipment to produce semiconductor chips. The company opened a new facility in Mesa, Arizona last year.

“To put it simply, we love being located near a lot of our customers,” said Ryan Rounkle, VP of the semiconductor capital equipment sector at Benchmark. CHIPS and Science Act incentives and the strong technical talent pool further supported the decision to move here, Rounkle said.

Like TSMC, the company partners with local educational institutions like the Grand Canyon University and ASU to build the necessary workforce.

The state has also added new legislation that decreased property taxes for many semiconductor companies and reimbursements related to major public infrastructure improvements.

“Manufacturers and suppliers are attracted to our environment that offers a favorable corporate tax structure and tax credits, and a minimalist regulatory approach in addition to competitive labor, land, and operating costs,” Camacho from GPEC said.

Since 2020, the state has welcomed more than 40 semiconductor projects, representing over $102 billion in capital investment and more than 15,700 direct jobs, according to the Arizona Commerce Authority. The numbers are likely to go up as Intel and TSMC’s projects begin production.

In October 2023, the small staff at Massachusetts-based Machineosaurus Manufacturing Company made the switch to a four-day workweek. The transition came after CEO Matthew Boucher read a presentation about the idea of the shortened workweek from HR consulting firm Randstad. 

As a contract manufacturing business focused on machine shop services, such as machine parts and small assemblies meant to be integrated into other machines, the company couldn’t cut down on total production, explained Boucher. But Machineosaurus’ nine employees could switch to longer hours, spread over four, rather than five, days.

“We were having to come in on Saturdays a lot. My observation was that it was just wearing people out,” Boucher said. “The team likes getting overtime, but at the same time only getting a day and a half to the weekend, it just gets tiresome.”

After discussing the concept internally for about a month and then spending a few weeks notifying customers, the company made the transition, according to Boucher. Ultimately, staff found that by working shifts from 6 am. to 4 p.m. from Monday to Thursday — rather than 6 a.m. to 2 p.m. Monday to Friday —  they were able to boost weekly sales per payroll dollar by 50%.

Machineosaurus is one of a number of firms experimenting with a shorter workweek. In 2022, the Society for Human Resource Management found that 32% of organizations already offer some form of a compressed workweek. Nine percent of companies have implemented a four-day workweek specifically, according to SHRM’s 2023 Employee Benefits Survey. 

For Machineosaurus, the transition has been successful — and there no plans to go back to the previous schedule. 

"It's really just been a real blessing for me as the business owner,” Boucher said. “It gives me time to work on the business instead of in the business." 

Benefits vs. drawbacks of a four-day workweek

One of the biggest benefits for Machineosaurus came from adjusting the logistics of overtime work, Boucher said.

Mondays at Machineosaurus tend to be busy, thanks to work leftover from the week before, while Tuesdays tend to be slower. Under the new schedule, however, the team pushes to catch up on their work by Wednesday end-of-day — when management decides whether overtime will be necessary — in order to protect their Fridays. Now, the business is closed between Friday and Sunday.

Boucher has discovered that a shorter workweek — and cutting down on commuting hours — can improve worker happiness. The company also found that the switch can came with other more surprising benefits for the manufacturing process, such as saving on equipment startup and shutdown time. 

The four-day workweek can be used as a recruitment tool, said Patrick Penfield, a supply chain practices professor at Syracuse University.

“This could be a great recruitment tool for manufacturers especially in our ‘tight’ labor market,” Penfield said. Recent employee surveys exemplify this desire — a 2024 Bank of America survey found that 65% of employees wanted a four-day workweek, making it the top desired benefit in addition to their current slate of offerings. 

But the switch comes with operational hurdles as well, including with customer adoption. In the case of Machineosaurus, customers had to get used to deliveries not happening on Fridays. Boucher said he spent several weeks reaching out to customers to prepare them for the switch. 

Another challenge is the limits of the materials manufacturers are working with, argues Penfield, pointing specifically to manufacturing processes that have extensive start and shut-down costs. A four-day workweek could make operating these plants more expensive.

“[I]f you are making glass or steel [for example], it might be difficult to shut down and restart your factory without losing product,” Penfield explained. “Lastly, the pressure to still produce a product in four days versus what you produced over five days. If you have equipment/machine failure, supplier issues, lack of materials it could significantly impact your ability to ‘catch up’ and meet the schedule.”  

Plants that operate on a 24-hour, seven-days-a-week schedule would need to find part-time employees that can work a separate shift, Penfield said, if full-time staff are on a 4-day schedule. Automation could also help ease these issues, he added. 

Companies considering the switch may need to consider how the schedule change will impact salaries. Employers might reduce salaries to align with the reduced working hours, Emily Dickens, chief of staff, head of government affairs and corporate secretary for SHRM, said in an email. She also warned that the four-day workweek isn’t fully a trend yet — and is still in the early stages — even if some firms are finding success in the scheduling model. 

While deploying a four day workweek might boost employee retention and mood, other strategies could also be effective at improving worker happiness and staff retention. She pointed to other flexible work arrangements, including job sharing, part-time schedules and flexible time systems, as other options. 

“While there is supporting evidence for the benefits of a four-day schedule, organizations must carefully weigh the pros and cons, considering the diverse needs of their staff members, to determine if this is the best approach for their workforce,” Dickens said. 

As drugmakers look to optimize manufacturing processes to meet demand for new and complex drugs, as well as combat record high drug shortages, some experts are pointing to a production method that could help tackle these dueling challenges: continuous manufacturing. 

The manufacturing method, which relies on continuously inputting materials into the production process, has been used in other industries like food for decades. Yet the pharmaceutical industry hasn’t quite caught up yet. Some in the sector, however, say that could change as more companies see the method’s merits.

What is continuous manufacturing?

Continuous manufacturing is an “advanced manufacturing technology where input materials are continuously fed into production and transformed, and processed output materials are continuously removed,” according to the Food and Drug Administration. 

In the drug manufacturing world, it means production lines running 24/7, uninterrupted.

This constant input has multiple benefits for manufacturers — including the need for less inventory storage space, more real-time data points and improved time to market compared to traditional batch manufacturing, according to Kevin Bittorf, senior executive and consultant for pharmaceutical manufacturing at SCX CMC Solutions.

Continuous manufacturing can all be performed in one space, which reduces inventory and storage needs because it produces items without breaks between batches.

“Where batch manufacturing, you have more physical storage because you're waiting for release time before it goes out. You're storing more raw materials,” Bittorf said.

Batch manufacturing involves a series of steps that require multiple rooms for different stages of production, resulting in more monitoring, manpower and a lengthier end-to-end process. After each step in the batch process, additional tasks must be completed, such as moving materials to a different site, conducting quality checks or reviewing equipment.

Currently, continuous drug manufacturing is best for making small molecule capsules, tablets and oral solid dose products, usually in larger volumes, Bittorf said.

What roles do AI and automation play in continuous manufacturing?

Manufacturing continuously provides access to thousands of additional data points, which can be used to analyze and improve processes in real-time. 

“The disadvantage for continuous manufacturing is you have to track each component," Bittorf said. "Knowing where each component is when you introduce it, the timestamp of that and ensuring that you have an idea of where and when each component was inputted into the system."

Any added costs driven by the need for more data storage are outweighed by the long-term benefits to production efficiency, he added.

“You have more data, that's more expensive, but you might be able to store less. You have less material losses because you don't need as much sampling. You have less startup and shutdown costs because you're running less, so you save more material overall,” Bittorf said.

The focus for drugmakers should be on what they do with all the data once they have it, which calls for a more technically skilled labor pool to help with the advanced automation and data upkeep, according to Doug Hausner, senior manager of business development continuous manufacturing at Thermo Fisher Scientific.

“The hard part is getting that all established. So getting all those systems in place, making sure everything works," Hausner said in an email. "It's a lot of frontloaded effort, as far as people and time to get everything set up to then allow it to run smoothly for long periods of time without a lot of intervention or support."

Why the pharma industry has been slow to respond

Continuous manufacturing in the pharmaceutical industry has been slowly growing for about a decade, according to Bittorf. Yet it’s a process more embraced in other sectors like steelmaking, food and auto, while drugmakers have been more hesitant.

One reason for that could be because continuous manufacturing is a more expensive option, with upfront costs for advanced equipment and data storage, Bittorf said.

The industry must also navigate more FDA approvals at multiple stages of development, production and distribution.

“One of the challenges for pharma has been the culture and ability to adopt new things in a highly regulated environment,” Hausner said.

Another hurdle is that FDA approval is needed if a company wants to change its existing manufacturing process to continuous, meaning it’s smarter to start from the beginning of a new drug's manufacturing process, rather than after a drug has completed multiple trial phases, Hausner added.

“If I already have an existing product in market, there's much less benefit to switch the manufacturing process. You have to pay for the capital and the other things that go with change and you have to resubmit that," Hausner said. "Most of the interest is in using the technology for bringing new products to market."

Signs of continuous manufacturing adoption in the industry

While regulatory hurdles exist, the federal government is pushing drug companies to adopt the process.

In 2021, the House of Representatives passed a bill that would direct the FDA to designate up to five national centers of excellence in advanced and continuous manufacturing. The same year, the Department of Defense awarded $69.3 million to Continuus Pharmaceuticals to develop continuous manufacturing capabilities for critical medicines. 

The FDA has been on board too, performing an audit in 2022 that compared batch manufacturing to continuous to compare federal approval and market entry speeds. Continuous manufacturing outperformed batch on both fronts.

“FDA encourages the utilization of CM for the development and manufacturing of drug substances and finished drug products,” the agency said in the audit report.

While a slower uptick than other industries, the adoption of the process is creating change throughout the drug supply chain. 

“It’s being adopted, and this can be seen through the investments equipment providers have publicly announced to meet demand for their continuous manufacturing equipment. These are being purchased by branded companies who are bringing pipeline products through using continuous manufacturing technology,” Hausner said.

Major contract drug manufacturers are also taking note of continuous manufacturing's potential. 

Thermo Fisher Scientific operates a continuous manufacturing line at its Greenville, North Carolina, facility, according to Hausner. The company has four active continuous manufacturing oral solid dose programs and is planning for two commercial programs in 2026.

Pfizer has two facilities completely dedicated to CM in Groton, Connecticut, and Freiburg, Germany. The company estimates that 70% of its small molecule, solid oral dose portfolio will be made using its continuous manufacturing process within the next ten years. 

Yet Hausner and Bittorf both note that not all manufacturers should adopt the newer technology right away. They must evaluate the costs, product volume, future scaling and technical feasibility of the available equipment and facility for producing drug products.

“It’s not a simple question — comes down to program-specific benefits,” Hausner said.

Bittorf hopes that in the next five to 10 years, more companies shift away from seeing continuous manufacturing as a burden to implement. 

“Right now, a lot of companies are ‘I'm worried about going into continuous manufacturing because I think there's this regulatory hurdle, there's not enough equipment out there’ and I just want it to be looked at as ‘I have a choice on how to manufacture my product. How do I want to do it and what's the best way for my product?’” Bittorf said.