Springfield Business Journal_2019-02-25

10 · SBJ.NET FEB. 25-MARCH 3, 2019 Springfield Business Journal Editor Eric Olson discusses the manufacturing industry with Di- anna Devore, owner of Design Fabrications Inc.; Chad Myers, general manager of Springfield Remanufacturing Corp.; and Danny Perches, economic development project manager for the Springfield Area Chamber of Commerce. Eric Olson: In one word, how you would describe the state of manufacturing? Dianna Devore: Growing. Danny Perches: Thriving. Chad Myers: Confused and uncertain. Long hours Olson: That’s an intriguing answer. What do you think is behind that? Myers: Always the uncertainty in what government regulations can do. We’re prepared to have a slowdown in 2019. You have some analysts think there is a potential recession coming. Our company had grown so quick so fast. It’s all about parts and people. Whoever has the capac- ity gets the order. You have inventory and now you have inflation. There’s an awesome opportunity right now for an enormous amount of capital investment. Olson: Are you seeing similar things with clients? Devore: We don’t do repetitive manufac- turing; we manufacture products for specific jobs. But what we see is, how fast can you get this to me? And if I say it’s eight weeks, “OK, I need it done in six.” Right now, it’s looking like that is a bigger determination factor on whether you get the order than the price. Olson: The company that can turn it around the quickest can win right now? Myers: Lead times are compressed. Like Dianna was mentioning, 67 percent of the orders we accepted last year were less than lead time. You put a lead time out there established based off the longest time that we have for any parts or materi- als. We’re not very familiar with saying no. Devore: Right. [laughs] Myers: It’s about people’s jobs. It’s not an overconfidence. If we create a bad situ- ation, we can clean the bad situation up. But 67 percent of our orders were less than lead time, which then equated to an enormous amount of overtime. Devore: We’ve been working overtime. I can’t remember when we weren’t. We have a big backlog, bigger than we’ve ever had. At some point, that’s got to level out. Steel prices went up so rapidly last year, and we stayed busy. The supply was good. But we had to increase our prices quite a bit, and in some cases that caused the [project] owner to go back and say, “How can we save money here?” Then they start cutting steel out, moving into wood. Critical number: People Olson: There’s been a lot of energy and focus around the workforce locally and statewide. In fact, Gov. Mike Parson was in town last week at SMC Packag- ing to talk about workforce issues. He was touting what’s called Fast Track, a financial aid program for adults working toward degree programs that have been identified as in need. Do you see a skills gap in manufacturing? Devore: There’s a definite shortage of skilled workers. We have a major compe- tition going on just to get workers. That has definitely driven our wages higher, and it has started all kinds of initiatives I know with the chamber and with the city of Springfield Workforce Development. I’m also involved with the Springfield Contractors Association, as president last year. Our initiatives have been around attending career fairs at high school. We had a counselors’ roundtable last year where we asked the counselors: How do we get these people, these young folks, especially those who don’t want to go to college or are not college bound, how do we attract those into our workforce? Their response was great. They said, “Tell me how to focus these kids, and we’ll do it.” If a kid wants to be a nurse … there’s a path to get to that goal. But when you say I want to be a welder, they say they don’t know how to help them. That’s bad on us. So we’ve worked on putting together presentations, just maps for welders. Go here, here and here. Another important factor is educating parents, as well, that it’s not a bad thing to go into manufactur- ing. The Build My Future event, we’ll be having the third annual in Springfield here in April. We’ve already signed up, I think, 1,800 students. Myers: I can remember being in high school and there were vocational op- portunities from the time you were a junior. All of a sudden, it disappeared. I feel like I can say this because my wife’s a teacher: You know, 20 years ago they said go to college so you never have to end up in a factory. We were one of the first, now there’s a couple others here locally and in the state, to partner with the state on the apprenticeship program so we can bring young adults now into the factory and they can actually do an internship. They go straight to the floor. They get the same skill that was taught in vocational schools, but now it’s real-life application at the same time, which I think is even better. My biggest issues or thoughts with the workforce is there’s not enough. Olson: So there’s not much of a skills shortage but a people shortage. Myers: The latest job reports say we’re at 6.9 million open jobs in America. By 2020, it’s projected to go 8.5 million. We’re handing out job applications at the maternity wards now. [laughs] We have third-graders that come in, and we shut down the factory and tour them around. We bring those kids in and start talking to them about things that are relevant to what they’re learning. Penmanship. You want to fill out an ap- plication? We got to be able to read your application or we won’t be able to call you. I put a lot of responsibility back on the manufacturers right now. The Fast Track program, I think it’s a good pro- gram. I think it will help. But we have to market better what we offer. We will pay 100 percent tuition reimbursement in our factory. Part of our target right now is getting up to the high school kids. We have that (Greater Ozarks Centers for Advanced Professional Studies) program. We’ve kept four people on. (Ozarks Technical Community College), we have a great partnership with them. We started the reman track. It is going to be an exhaustive process for the next three to five years of getting the people you need to be able to fulfill the orders you get. We 100 percent believe as a company that by 2020, whoever has the people will dominate the market. Olson: Where’s the hope in manufacturing to reach that next workforce? Myers: I don’t know that in my career I’ve ever experienced one magic pill or one program that really stood out from an- other. I’m trying to attract professional jobs and hourly jobs that don’t require near the skill set. I’m looking for engi- neers, I’m looking for CFOs, I’m looking for somebody to run a soda blaster. Our HR staff grew from one to four in the last year and a half because of how much investment we’ll have to make in attract- ing and retaining people. If I hang one thing on it, it’s retention. And figuring out how to bring technology in, so that you don’t need as many people. Olson: At the [recent] Missouri Associa- tion of Manufacturers’ conference, Jack Stack [of SRC Holdings Corp.] gave the keynote presentation and in it he said, “We realize right now our biggest weak- ness is the ability to attract and retain employees.” He said, “Our critical num- ber now is people.” What other critical MANUFACTURING WES HAMILTON Sam Dryer, Mutual of Omaha; Danny Perches, Springfield Area Chamber of Commerce; and Chad Myers, Springfield Remanufacturing Corp.