2018 Indiana Manufacturing Survey: Push for automation increases

As Indiana’s largest industry sector enjoys continued growth in revenues and profits, its employers are investing heavily in automation and manufacturing efficiency, welcoming an industry movement that, nationally, has been dubbed “Industry 4.0”.

The 2018 Indiana Manufacturing Survey: Industry 4.0 Has Arrived shows that most Indiana, USA manufacturers consider investments in facilities, machinery and related information technology to be their top concern.

Meanwhile, the percentage of firms identifying workforce development as their top concern declined to its lowest level in a decade.

“If last year’s shift in favour of automation and facilities was a growing wave, then this year’s results seem more like a tsunami,” said survey co-author Steve Jones, professor of finance at the IU Kelley School of Business on the IUPUI campus.

“Hoosier manufacturers recognise that they must join the Industry 4.0 revolution if they want to remain competitive.”

The annual manufacturing survey – commissioned by Katz, Sapper & Miller, authored by faculty from Indiana University’s Kelley School of Business on the IUPUI campus, and promoted by the Indiana Manufacturers Association – is designed to assess the state of Indiana’s manufacturing industry and provide insights into management choices made by manufacturing companies across the state.

Respondents to this year’s survey reflect views from rural to urban Indiana communities, and industries ranging from industrial equipment, automotive, aerospace/defence, packaging, high-tech, and healthcare.

“Manufacturers continue to see automation not only as a way to increase efficiency and productivity, but also as a way to address workforce shortages,” said Jason Patch, partner-in-charge of Katz, Sapper & Miller’s Manufacturing and Distribution Services Group.

“Still, they recognise that, even as increased technology reduces their reliance on unskilled workers, they will need more skilled workers to operate the factories of the future.”

The report authors suggested that, in order to meet this growing need, manufacturers must train and “upskill” current workers and aggressively recruit high school students into the field. At the same time, they must make the case to all Hoosiers about how important manufacturing is to the state’s economy.

“This survey shows that manufacturing is strong in Indiana, but the state can’t take its position for granted,” said survey co-author Mark Frohlich, associate professor of operations management at the IU Kelley School of Business on the IUPUI campus.

“Issues such as regulations and tariffs, healthcare reform and the workforce shortage must be addressed if Indiana manufacturers are to maintain their competitive strength.”