Stronger, eager to grow
Posted October 2021
By John A. Lahtinen for Providence Business News
The flexibility required of Rhode Island manufacturers to stay open throughout the COVID-19 pandemic has made many of them stronger, says Kathie Mahoney, center director at Polaris MEP, the state’s manufacturing extension partnership.
“No one was prepared for what happened [in March 2020],” she said. But manufacturers “proved their resiliency.”
Whether it was pivoting to produce much-needed personal protective equipment or offering flexibility to their employees to work from home or take advantage of more-flexible shifts, manufacturers have adapted to meet the needs of both their customers and their employees.
Mahoney says several companies have also pointed to relationships they have with their vendors and customers that have never been stronger.
Business at Cranston-based Amerisewn, a division of Desmark Industries Inc., has been steady throughout the pandemic. In fact, the cut-and-sew contract manufacturer has even managed to add a few new customers.
“This experience has forced us to really look hard at our capacity allocation, supply chain timelines, costing and workforce expenses,” said Layne Mayer, director of growth. “We have improved and tightened all stages of projects. Operationally, we have really focused more on how we cost a job and have been firm with the pricing that keeps us in a strong position. We have hired and trained more people into project management roles so that we have a much tighter understanding of efficiencies and costing and the strengths of every member of our team.”
The company, he said, also “understands our customers better. … It is more of a two-way relationship. We have learned how important and critical we are to their business, and we can now better address their challenges.”
However, as business ramps up again, one concern many companies face is finding enough qualified candidates to fill open positions.
A recent study by Deloitte and The Manufacturing Institute suggested the skills gap in the U.S. could result in more than 2 million unfilled jobs by 2030, with the cost of those missing jobs potentially reaching $1 trillion in 2030 alone.
Edward M. Mazze, distinguished university professor of business administration at the University of Rhode Island, expects significant growth over the next few years in manufacturing parts and products in several areas. Possible growth areas, Mazze said, include medical and pharmaceutical, chemical, computer and electronic products, food and beverage, textile, electric equipment and appliances, general purpose machinery and fabricated metal products. But Mazze also foresees trouble for companies filling open spots.
“The sign most often seen in front of a Rhode Island business today is ‘Help Wanted,’ ” Mazze said. “One of the results of the pandemic has been the lack of qualified employees for manufacturing jobs. Many people are rethinking about how, where and why they want to work. Some are dropping out of the workforce; many are relying on federal and state government programs to provide financial assistance. Some will stay home to take care of children. It is expected that this shortage of skilled labor will continue to be a major issue for [hundreds of] manufacturing companies in Rhode Island.”
Mazze says manufacturers have had to not only revise their business models to satisfy customers and stay competitive, but also reexamine compensation and benefit programs to attract and retain workers.
Rhode Island, through public and private organizations, offers financial incentives and training programs to encourage people to return to work. But, Mazze says these initiatives continue to face two major challenges – the continuing fear of the pandemic and a lack of trust in the government’s ability to implement the programs fairly.
Stuart Benton, CEO and president of West Warwick-based specialty personal care products manufacturer Bradford Soap Works Inc., faces many of the same staffing issues. He had about 25 spots available in Rhode Island at the end of August.
“The availability of labor is a challenge in the state,” Benton said. “Even with Honeywell closing some operations, it is still challenging to find people to work. I was speaking with a business owner who employs over 2,000 people in the state and they were short almost 200 people. We have reemphasized our employee referral program, participated in work fairs and are looking at nontraditional sources of workers, but it is a struggle to fill all of our positions. The historical sources of people in the state don’t have much of a pipeline to offer us. We are trying to work with [the Community College of Rhode Island] and others to source people.”
Beyond finding the employees, Benton says some questionable government decisions have hurt Rhode Island manufacturers.
“The new governor [Daniel J. McKee] pushed a taxation in R.I. of [Paycheck Protection Program] money companies got, which at a minimum is a double taxation, as most manufacturers used this money to pay wages,” Benton said. “This PPP tax affects less than 5% of the companies and raises significant tax dollars. … It is like a money grab on the backs of a small number of businesses.”
Many have looked to the state’s job training and apprenticeship programs as paths toward bolstering the workforce.
The R.I. Department of Labor & Training says there had been 2,184 total participants enrolled in manufacturing industry training programs through the DLT initiatives Real Jobs RI and Back to Work RI since July 1, 2020. Of these, 1,372 were incumbent workers seeking additional skills and 774 were new people entering into training programs.
“Rhode Island made Real Jobs a permanent part of our state budget,” said David M. Chenevert, executive director of the Rhode Island Manufacturers Association. “We need more career tech schools such as the William M. Davies Jr. Career & Technical High School. Davies’ advanced manufacturing school cannot produce enough machinists to fill the jobs of an aging workforce. CCRI and rhw New England Institute of Technology offer classes but that is barely meeting the minimum needs. Career technical education is a critical component for Rhode Island’s economy. If we cannot fill jobs, why would anyone move their company” to Rhode Island.
Chenevert says financial support for Real Jobs is critical as a step toward solving the training shortage.
“We talk about a five-year plan for our state’s economy,” Chenevert said. “RIMA is working to develop a transportation solution for many unemployed people. … We are working with the [R.I. Public Transit Authority] on a program called ‘Have Jobs Will Travel.’ We are focusing on Woonsocket, Central Falls, Providence and Pawtucket to get unemployed people the ability to get to industrial parks that are hiring and offering good-paying manufacturing jobs.”
Supply chain issues have jumped front and center for many companies during the pandemic. Finding materials, as well as the increased costs of those materials, has affected their bottom lines.
“The federal government is now recognizing that certain aspects of manufacturing had a reliance on overseas production,” Chenevert said. “Now they see the negative results of the lack of production being done in the United States. Many manufacturers are subject to the decisions of the government in how they can acquire supplies.
“Many companies have learned a hard lesson on who they use regarding outside purchases,” he added. “I see certain companies seeking alternative suppliers and shifting a percentage of their supply chain to a more local source.”
Product shortages and extended lead times “have definitely been an extra challenge,” said David Spencer, CEO of Pawtucket’s family-owned Atlantic Paper & Supply. “Additionally, product costs have escalated at unprecedented rates. To combat these issues, our procurement team has increased inventory on all our critical product lines.
“As a smaller company, we’ve always had to be extra scrappy and resourceful,” he added. “I’m extremely proud of our people for the way they have dug in and gone the extra mile to ensure that customers get what they want, when they need it.”
Despite the obstacles and uncertainty, Chenevert sees opportunity for growth. In addition to discussion about reshoring product lines back into the U.S., the federal government is also stepping up support for manufacturing.
But for things to turn around locally, he says, more changes are needed.
“We have an opportunity to bring work into Rhode Island,” Chenevert said. “Reshoring has been difficult due to Rhode Island’s business climate. We have one of the worst business climates in the country. To develop reshoring, we must change that image. The state legislature needs to make the business community part of our economy’s solutions before they present legislation.”
RIMA, Polaris MEP, Bryant University’s John H. Chafee Center for International Business and the state have been working with manufacturers on reshoring efforts through a pilot program now in the development phase, which has provided valuable data on potential opportunities.
“This is an excellent example of how several organizations work together to improve the manufacturing ecosystem in Rhode Island,” Polaris’ Mahoney said. “When the pandemic shut down several supply chains from overseas, the importance of a domestic supply chain became even more relevant and important. Companies have not seen this type of disruption before. They needed to react quickly. Buying locally has always been critical to keep jobs in Rhode Island [and the nation].
“The pandemic has made everyone more aware of the importance of a local supply,” she said.
Polaris MEP has been connecting companies with suppliers through the MEP National Network. Although Rhode Island-based, nonprofit Polaris has resources in 50 states and Puerto Rico.
Local manufacturers understand some aspects of their businesses may never be the same as they were pre-pandemic, but they’re working both to embrace this reality and to open themselves up to new opportunities and ways of thinking.
“I see new programs in the K-12 schools to build an awareness of the opportunities for careers in manufacturing,” Mahoney said. “Manufacturing can provide a solid career for folks that want to make a difference and like to make things.
“Job training can provide the skills to grow a solid career path for their future selves and family. I also see manufacturers continuing to make an impact on the state’s economy through innovative programs at their companies and within the state to reinforce the critical need of manufacturing.
“A silver lining of the pandemic,” she said, “is manufacturing is more resilient, flexible and stronger.”