Thanks to Los Angeles manufacturers, LA still ranks as one of the biggest centers (number one in 2014) of manufacturing in America. Behind that statistic, however, there are many challenges this sector faces.
Workforce Renewal and Digital Transformation
The largest manufacturing sector in Los Angeles County in 2009 in terms of employees was computer and electronic products, followed by apparel, and then transportation equipment, fabricated metal products, and food.
In general, the split between durable and non-durable goods production was about even. Manufacturing used to be the biggest employer overall in the area but has now slid to the fourth largest. Fundamental difficulties to resolve include:
- Aging workforces. There is a pressing need to hire new workers to replace those who retire. However, it does not mean Los Angeles manufacturers have to lag behind in terms of modernization and digital technology. Older generations understand the power of IT and are willing to learn, besides being adept in the use of mobile devices and smartphones.
- Increasing the concentration of low-wage, low-skill manufacturing. Overall, Los Angeles County has been shifting towards a greater proportion of low value-add manufacturing. Meanwhile, surrounding counties in California have been moving to more sustainable, higher-wage employment. Los Angeles may need to boost the use of smart technology and automated production systems to allow workers to add more value elsewhere.
- Lack of skilled workers. Manufacturers face a similar challenge to the construction and the logistics sectors in that their brand image in the job market may fail to inspire excitement. Manufacturing, like the other two sectors, has been fundamentally transformed by IT and related digital technologies. 3D-printing as a revolutionary new production technique is just one example. Skilled digital-era workers can now have as much fun in manufacturing as almost anywhere else.
The Priority is Still Real Business Benefit
It would be unwise to suggest that just slapping more technology onto manufacturing solves all problems. The classic case of General Motors versus Toyota shows otherwise. In the 1980s, GM fell in love with robots and spent a fortune on them, but with little result.
Meanwhile, Toyota stayed lower-tech but focused on better management and better processes. GM stalled, and Toyota overtook it to become the worldwide leader in automobile manufacturing.
Somewhere Over the Rainbow (or Up in the Cloud)
Since then, technology has become both cheaper and easier to use for business benefit. Cloud computing services are a case in point. Los Angeles manufacturers can access ERP (enterprise resource planning) software, procurement and logistics management programs, and CRM (customer relationship management) applications to smooth and accelerate daily operations.
Other cloud solutions to help attract new workers, upgrade skills, and add value in the manufacturing sector are available too.
What other challenges does your Los Angeles manufacturing company face? Tell us about it in the Comments box below.
If you own or manage a manufacturing or distribution company in Los Angeles, and you’re looking to stay up to date on the latest technology, be sure to download your free guide, How COOs at Los Angeles Distributors and Manufacturers Get More Done: A Guide to Productivity, Data, Staffing, Delegation, and Making It Home for Dinner Most Nights.