{"580181":{"#nid":"580181","#data":{"type":"news","title":"Georgia Companies Adopt Competitive \u201cSmart Manufacturing\u201d Techniques","body":[{"value":"\u003Cp\u003EGeorgia\u2019s manufacturing sector remains a vibrant and profitable part of the state\u2019s economy, with more companies incorporating strategies such as smart manufacturing to remain competitive.\u003C\/p\u003E\u003Cp\u003EBut as the industry is integrating more innovative practices, it is not as focused on cybersecurity vulnerabilities and faces an additional challenge of finding enough skilled workers for its emerging needs, according to the findings of the 2016 Georgia Manufacturing Survey.\u003C\/p\u003E\u003Cp\u003E\u201cOne of the biggest takeaways is the industry\u2019s use of smart manufacturing, which was a new focus for this year\u2019s survey,\u201d said Jan Youtie, principal research associate at the Enterprise Innovation Institute (EI\u003Csup\u003E2\u003C\/sup\u003E), the Georgia Institute of Technology\u2019s chief economic development arm. The concept refers to the use of data and information to improve product design and development, enhance manufacturing processes, and foster responsiveness to customers and suppliers.\u003C\/p\u003E\u003Cp\u003E\u201cNearly all the companies are using smart manufacturing technologies, but fewer of them are paying attention to cybersecurity issues,\u201d Youtie said.\u003C\/p\u003E\u003Cp\u003EGeorgia Tech researchers conducted the survey of 526 manufacturers with 10 or more employees. Georgia Tech produced the survey in collaboration with Kennesaw State University, the Georgia Department of Labor, and Habif, Arogeti \u0026amp; Wynne, an Atlanta-based accounting and business advisory firm.\u003C\/p\u003E\u003Cp\u003E\u201cManufacturing is one of the most important sectors in Georgia,\u201d Youtie said, noting there are more than 9,000 manufacturers in the state and collectively they employ more than 360,000 workers and account for 11 percent of Georgia\u2019s gross state product. \u201cWe wanted to look at how manufacturers are changing, as well as how they are using technology and the kinds of challenges they face in response to changes in the broader economy.\u201d\u003C\/p\u003E\u003Cp\u003EGeorgia manufacturers are increasingly focused on incorporating new technologies into their operations, such as automated customer ordering and computer-aided design. But the survey findings suggest that while the industry is embracing new technologies, it is not focusing enough on cybersecurity risks.\u003C\/p\u003E\u003Cp\u003E\u201cThey\u2019re focused on the technology and implementing it, but not thinking about the human aspect or the workers who utilize the technology,\u201d said Karen Fite, director of the Georgia Manufacturing Extension Partnership (GaMEP), a federally funded EI\u003Csup\u003E2\u003C\/sup\u003E economic development program that works with the industry to help companies grow and remain competitive.\u003C\/p\u003E\u003Cp\u003E\u201cThere is a lot of talk about cybersecurity and everybody recognizes it as an issue, but most manufacturers haven\u2019t realized that they have a lot of data that could be at risk,\u201d Fite said, adding the findings reflect a broader trend that Manufacturing Extension Partnership programs in several states have found. \u201cManufacturers still see cybersecurity measures as very cumbersome to implement, so it\u2019s not immediately at the forefront of the issues they are working to resolve. We have to help them think about some of the solutions they can utilize.\u201d\u003C\/p\u003E\u003Cp\u003ENot surprisingly, larger manufacturers \u2014 those with at least 250 employees \u2014 have a higher degree of focus on cybersecurity issues. Nearly two-thirds of the large companies surveyed reported that cybersecurity is a focus.\u003C\/p\u003E\u003Cp\u003E\u201cWe kind of expect that, but it is surprising that one-third of larger companies are not as focused on this issue and we hope that smaller companies would pay attention,\u201d said survey co-director Philip Shapira, a professor in Georgia Tech\u2019s School of Public Policy and a professor of innovation, management, and policy at the Alliance Manchester Business School in the United Kingdom. \u201cIt\u2019s not just about secrecy; it\u2019s about protecting manufacturing systems, which are increasingly connected to the Internet. These systems are interdependent, so it\u2019s protecting against viruses and downtime and other potential issues that might come up if you don\u2019t pay attention to cybersecurity.\u201d\u003C\/p\u003E\u003Cp\u003EAnother area of focus for industry \u2014 a trend underscored by previous surveys \u2014 is workforce skills. Survey respondents cited the Georgia workforce\u2019s technical and basic skills as being among the top concerns. More than 34 percent of respondents raised the need for workers with more technical skills as a concern, an increase of more than 7 percent from 2014.\u003C\/p\u003E\u003Cp\u003EManufacturers also reported a growing need for workers with basic skills. More than 28 percent of respondents reported that as a concern, up nearly 7 percent from 2014.\u003C\/p\u003E\u003Cp\u003E\u201cHistorically, this has been an issue that\u2019s been close to the top, but it\u2019s really jumped in terms of the need to have a skilled workforce,\u201d Fite said. \u201cAnd that\u2019s critical as companies adopt more smart manufacturing practices because it\u2019s about new technologies and it\u2019s going to require new and different skill sets, such as data-driven skills that the current workforce doesn\u2019t have.\u201d\u003C\/p\u003E\u003Cp\u003EAnd while manufacturers cited workforce skill among their top needs, it\u2019s not something the industry is devoting a lot of resources to address, Shapira said, explaining companies spend roughly the equivalent of 1 percent to 2 percent of payroll on training.\u003C\/p\u003E\u003Cp\u003E\u201cI think there is a role for policymakers to try to find ways to work with existing companies,\u201d Shapira said. \u201cAnd that\u2019s where something like the GaMEP can help. If companies knew where to invest in training and have some guidance, they might be more willing to invest in that.\u201d\u003C\/p\u003E\u003Cp\u003EGeorgia manufacturers may be more willing to make those investments given that the industry is enjoying more profitability. As measured, profitability jumped 13 percent in the 2016 survey results, compared with 2014.\u003C\/p\u003E\u003Cp\u003E\u201cThis is the second survey in a row where we\u2019ve seen profitability go up for manufacturers in spite of a hesitancy to invest in new technology and techniques,\u201d Fite said.\u003C\/p\u003E\u003Cp\u003EPart of what\u2019s fueling that trend is that more companies are focused on incorporating innovation as a differentiator as opposed to competing on price. It\u2019s a marked change from prior years.\u003C\/p\u003E\u003Cp\u003E\u201cIn 2014, there was so much growth in manufacturing that the companies competing on low prices almost had the same returns as companies competing on innovation,\u201d Youtie said, explaining the survey began tracking that difference in 2000. \u201cBut this year, we\u2019re back to seeing that companies that are competing on innovation having higher returns than companies that are competing on low cost.\u201d\u003C\/p\u003E\u003Cp\u003EIn addition, companies that compete on innovation tend to pay higher wages to their employees, Fite said.\u003C\/p\u003E\u003Cp\u003EThat focus on innovation could also help explain why outsourcing and insourcing trends seem to have stabilized. Outsourcing in particular has long been a concern as Georgia and the nation as a whole shed jobs to lower-cost countries.\u003C\/p\u003E\u003Cp\u003E\u201cWhen we first started, we saw that 18 percent of manufacturers were outsourcing and only 11 percent were insourcing,\u201d Youtie said. As Georgia manufacturers \u2013 particularly those in the apparel and textiles sector \u2013 moved jobs overseas in the 2000s, the outsourcing trend was expected to continue. \u201cBut the outsourcing percentage is steadily going down where this year it\u2019s leveled off to around just under 12 percent, \u201dYoutie said.\u003C\/p\u003E\u003Cp\u003EIn contrast, insourcing has steadily increased to its current 12 percent, where it has leveled off. \u0026nbsp;\u201cWe have 10 years of experience with this trend, and the industry realizes there is a big cost with outsourcing,\u201d she said.\u003C\/p\u003E\u003Cp\u003E\u201cSo if you bring that business back, you have quicker delivery and lowered business risks. If you look at the total cost and also the percentage of labor in manufacturing, these indicators are not as high as they were in 2005, so it\u2019s harder to view outsourcing as being so economically sensible for industry.\u201d\u003C\/p\u003E\u003Cp\u003EFirst produced in 1994, the Georgia Manufacturing Survey is conducted regularly to benchmark the use of modern manufacturing technology, practices, and techniques. Information obtained from the survey is used to improve manufacturing assistance programs and regional innovation initiatives that help Georgia companies compete, improve their profitability, and create jobs for Georgians. More information can be found at (\u003Ca href=\u0022http:\/\/www.gms-ei2.org\u0022 title=\u0022www.gms-ei2.org\u0022\u003Ewww.gms-ei2.org\u003C\/a\u003E).\u003C\/p\u003E\u003Cp\u003E\u2014 P\u00e9ralte C. Paul\u003C\/p\u003E","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":"","field_summary_sentence":[{"value":"Manufacturers are focused on innovation, but challenges remain in cybersecurity and skilled labor needs."}],"uid":"28137","created_gmt":"2016-09-21 09:17:14","changed_gmt":"2022-05-26 17:09:36","author":"P\u00e9ralte Paul","boilerplate_text":"","field_publication":"","field_article_url":"","dateline":{"date":"2016-09-21T00:00:00-04:00","iso_date":"2016-09-21T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"580201":{"id":"580201","type":"image","title":"Advanced manufacturing in Georgia","body":null,"created":"1474465543","gmt_created":"2016-09-21 13:45:43","changed":"1475895391","gmt_changed":"2016-10-08 02:56:31","alt":"Advanced manufacturing in Georgia","file":{"fid":"207333","name":"dsc_10411.jpg","image_path":"\/sites\/default\/files\/images\/dsc_10411.jpg","image_full_path":"http:\/\/tlwarc.hg.gatech.edu\/\/sites\/default\/files\/images\/dsc_10411.jpg","mime":"image\/jpeg","size":2183358,"path_740":"http:\/\/tlwarc.hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/dsc_10411.jpg?itok=zzqc8IQZ"}},"580231":{"id":"580231","type":"image","title":"Smart manufacturing adoption","body":null,"created":"1474466045","gmt_created":"2016-09-21 13:54:05","changed":"1475895391","gmt_changed":"2016-10-08 02:56:31","alt":"Smart manufacturing adoption","file":{"fid":"207335","name":"smart_graph.jpg","image_path":"\/sites\/default\/files\/images\/smart_graph.jpg","image_full_path":"http:\/\/tlwarc.hg.gatech.edu\/\/sites\/default\/files\/images\/smart_graph.jpg","mime":"image\/jpeg","size":81040,"path_740":"http:\/\/tlwarc.hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/smart_graph.jpg?itok=2Uoey6qM"}}},"media_ids":["580201","580231"],"related_links":[{"url":"http:\/\/www.gms-ei2.org\/","title":"Georgia Manufacturing Survey"}],"groups":[{"id":"1214","name":"News Room"}],"categories":[{"id":"139","name":"Business"}],"keywords":[{"id":"170716","name":"2016 Georgia Manufacturing Survey"},{"id":"136201","name":"Georgia Manufacturing Extension Partnership"},{"id":"11149","name":"Jan Youtie"}],"core_research_areas":[],"news_room_topics":[{"id":"106361","name":"Business and Economic Development"}],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cp\u003EFor media inquiries, contact: - Laura Diamond\u003C\/p\u003E","format":"limited_html"}],"email":["peralte.paul@comm.gatech.edu"],"slides":[],"orientation":[],"userdata":""}}}