[Transcript]

[00:00:00] Jan Griffiths: This is the Auto Supply Chain Prophets podcast, and we are on a mission to bring you the latest insights and thought leaders leading the charge on supply chain transformation in our beloved automotive industry. This podcast is powered by QAD and AIAG. I'm Jan Griffiths, your host and producer. Let's meet your co-hosts.

[00:00:27] Jim Liegghio: I'm Jim Liegghio from AIAG.

[00:00:29] Terry Onica: I'm Terry Onica from QAD. Let's dive in.

[00:00:36] Jan Griffiths: Hello, and welcome to another episode of the Auto Supply Chain Prophets Podcast. Let's check in with my co-hosts. Terry Onica. What have you been up to?

[00:00:45] Terry Onica: Well, it's not what I've been up to, but this weekend I'm headed off to Europe to attend the Odette conference, so I'm super excited about that. And we are going to be starting MMOG/LE Version Seven right after the conference ends. So, we're gonna start the global meetings to start taking a look at it to see what needs to be updated, so all that great work begins.

[00:01:07] Jan Griffiths: I love that. Jim, what about you?

[00:01:09] Jim Liegghio: Jan, good morning. Good morning everyone. Proud to say, I just celebrated my 25th anniversary in supply chain. It hit me the other day. The day almost got away from me before I realized it. I realized it was 25 years ago I started my very first internship at a transmission plant in Kokomo, Indiana. So, I had that moment of realization and said, "Where the heck did 25 years go by?" But I've had a lot of fun in my career, so let's do it more. Let's keep going.

[00:01:35] Jan Griffiths: 25 years. Wow, that's a long time. Well, as you know, I have recently been to my beloved Homeland, to Wales. And I love to go back at the same time every year. It's a milestone marker for me. It's an opportunity to look back at the business and see how far it's come. And I do it two different ways: I do it professionally with the business, and then I also do it personally.

So there's always one thing, one habit that I want to change. And I look at how far I've come with my commitment from the year before, and it really is a wonderful process. It's a great time to think and get into more of the strategic mindset which I absolutely love. So I escaped tariff talk for a while—almost.

CBS Detroit got ahold of me, and I did an interview from Wales. I was actually on top of a mountain and they got ahold of me, and I managed to get back to the apartment and shower, change set of the microphone, and do an interview. So, I did have to put my brain into tariff mode for a moment. So, one of the things I was thinking about when I was in Wales was our ability to take on more manufacturing in the US. We know that one of the objectives of tariffs is to drive manufacturing back into the US, and we talk about, well, but you know, our manufacturing capacity base—our manufacturing base is gone. The capacity isn't there. But what about the people? What about the workforce development? How do we get our workforce ready for manufacturing coming back into the US?

And that's why I am thrilled today that we are bringing onto the show somebody who cares passionately about this issue and has spent his career working in workforce development. And we're gonna take a look at workforce development through the supply chain lens, which is really unique. Let's welcome to the show, Torsten Schimanski. Torsten, welcome.

[00:03:55] Torsten Schimanski: Thank you very much and good morning. And congratulations on the anniversary on the one hand side. Looking forward to your travel, Terry. Nothing's better than traveling. And it's amazing, Jan, that you're sitting on top of a mountain and think about workforce. So, it cannot get any better, I think.

[00:04:13] Jan Griffiths: Now, Torsten, you are the Chief Strategy Officer for NJMEP, and I know that I had to look up exactly what that was and what that meant. So, tell us a little bit about what you do and what is NJMEP.

[00:04:30] Torsten Schimanski: The New Jersey Manufacturing Extension Program is part of a nationwide organization, the Manufacturing Extension Program that is supported and covered by NIST, the National Institutes of Standards and Technology, part of the US Department of Commerce.

So, we are around for a little bit more than 20 years. And our job, our task, our mission is to make sure that manufacturers stay in the United States. This is how it started a few decades ago. Today, we are going to make sure that manufacturing stays in New Jersey for the most part.

Every state in the United States has minimum one office, so we are a nationwide organization and we are serving small to mid-size company offering consulting, as well as workforce development services to make sure that they have a shot at DOD contracts, and that they have a shot staying in business. That we are cutting costs, that we are improving supply chains, that the next certification can get in that is needed for the next contract that these companies would like to get. So, I'm serving NJMEP now for almost eight years, and it's alright.

[00:05:43] Jan Griffiths: Torsten, at the risk of stating the obvious, you're a German guy. Why do you care?

[00:05:50] Torsten Schimanski: I care because I'm a German guy.

[00:05:53] Jan Griffiths: Why do you care about US manufacturing?

[00:05:56] Torsten Schimanski: It started actually through apprenticeship programs when I moved to the US in 2007. I noticed that the apprenticeship programs, the way I know them from Germany are not really sufficient in the United States. And to be honest, as a European and someone who dearly cares about workforce development, coming from a country where education is technically for free, it just hurt me that youngsters at the age of 20 to 24 are finalizing their college education with a five maybe six digit number in debt. And apprenticeship is the alternative to that. So, I started looking into that, and I had the opportunity then to—in the manufacturing industry—to bring the German or European based model to the United States. It started with a company called Festo Didactic, and then NJMEP gave me the opportunity to do it full time—and that's the reason why I care.

[00:06:54] Jan Griffiths: That makes perfect sense. Thank you.

[00:06:57] Terry Onica: That's fascinating. We're glad you're here in the United States bringing all of that best practice and knowledge here.

So, I read an article that you had wrote for Quality Digest and it had to do with the workforce, and I found it very fascinating. And in that article, you stated a 2024 study from the Manufacturing Institute in Deloitte, and they indicated that domestic manufacturing could require up to 3.8 million jobs to be filled by 2023.

And also, a 2022 report from Deloitte that estimated 2.1 million US manufacturing jobs could go unfulfilled by 2030. Wow, tell us what's behind these numbers.

[00:07:44] Torsten Schimanski: These are scary numbers, don't you think? And in parts, it's the answer to your question, Jan, when you were sitting in Wales on top of your mountain. There is a skills gap and there is an issue with workforce, and it is not just the manufacturing but these numbers are very particular to manufacturing. And Deloitte as well as the Manufacturing Institute worked on this study. These numbers are really well known in the industry. It's kind of a North Star for all workforce development in manufacturing.

And there are several aspects coming to this, as well as the issue—the typical baby boomer issue—where they're moving out of the workforce while, at the same time, new workforce is not coming into manufacturing.

And it's a kind of a homegrown problem as well, where in manufacturing there is a certain lack of image, and or we do have an image. If I think about my mom, if I tell her that I work in manufacturing, she is wondering, what am I doing? Because her picture is very much from the 1920s in manufacturing where we talk about dull and dangerous jobs. It couldn't be further from the reality. But the point is, if we are not promoting jobs in the industry as well as the really sustainable salaries that are coming with it, no one is going to move into that. And I would like to ask Jan, I know you're not living in New Jersey, but what do you think, how many manufacturers do we have in New Jersey?

[00:09:14] Jan Griffiths: Oh, how many manufacturers? Gosh. Are you saying automotive or manufacturing as a whole?

[00:09:21] Torsten Schimanski: The entire industry. All industry sectors combined.

[00:09:25] Jan Griffiths: Oh gosh, I wouldn't even be able to guess. I dunno, 60,000?

[00:09:31] Torsten Schimanski: That's a really amazing guess and I wished it would be true. It's about 10,000 companies altogether. By the way, that's the bravest estimate I've ever heard. So, therefore, you're definitely on top of the mountain on this one.

[00:09:44] Jan Griffiths: In my head, I was thinking about small manufacturing companies. You know, I was thinking about adding them all up together. And of course, my history is automotive in the Detroit area, and thinking about all these little companies. So, that's how my mind projected that number.

[00:10:02] Torsten Schimanski: But here's the point that I want to make with that question, 'cause I usually ask anyone I'm meeting for the first time: how many manufacturers are in New Jersey? The usual answer is somewhere between 5 to 20. Then there are a few that are a little bit braver and they say 200 to a thousand. And then there are the superheroes, they think it's more than 5,000.

I'm not sure in which category you are falling right now, but the point really is if we have individuals that believe that New Jersey has 5 to 20 manufacturing companies. And in this case, employers, we are not going to find any parents, any teachers, any counselors, any legislators, any multipliers you possibly can think of who would recommend their own children and or the neighbor's children to look into manufacturing for career. And as long as this number is kind of a secret, obviously, we are not going to make any progress in this context, and we are not going to find additional workers.

So, coming back to your question from earlier, with all the manufacturing companies that the administration wants to bring back to the United States, we have to think about where is the workforce coming from?

Because the jobs that we have lost 30 years ago over that went overseas, these are not the jobs that are coming back. These jobs are going to be different in terms of requirements, in terms of the machines that we are going to use, in terms of maintenance, and this is exactly what we have to look into as the United States, but also every single company by itself.

[00:11:45] Jim Liegghio: I have a question. Torsten, you talked a lot of numbers, a lot of volume, a lot of folks we need to get back into the industry, back excited about the industry and parents and neighbors encouraging young people to get into this. What other motivators are there for the young people? What are you using as a draw to these folks to get into manufacturing? What's the sell point?

[00:12:02] Torsten Schimanski: If you were to ask ChatGPT in this context or any AI tool, the answer would probably be a sustainable income. The average income after two to five years when you get into welding could be somewhere between $70-90,000. In New Jersey, sometimes, even a little bit more.

I personally don't like that answer because, of course, sustainable income, making a living, having a great paycheck is one thing. But I believe that the reason why people are continuing working in their jobs, why they're investing in their personal development with continuing education, becoming better, smarter, faster is simply because of the fact that they're proud of what they're doing. So, there is something at the end. They can touch, they can see, they can ship.

And I do believe, and I actually tested it in some of other manufacturing companies that I know, why are you still working here? There's no one saying, "Oh, I'm here because I have a really comfortable office chair," or "Because we have a billard or pool billard table in the canteen, and we are using that from time to time."

What people are going to tell you is, "I'm really proud of what I'm doing." Especially contracts that are related to the Department of Defense, where there are small parts that are going into an FA team and is crucial for the whole thing to fly. They're incredibly proud of that—and I think that's a core motivation why should someone or why someone should look into these kind of positional jobs that are available.

[00:13:39] Jim Liegghio: In your article, Torsten, you described this as a supply chain problem. Can you really expound upon that and explain what you mean by a supply chain problem?

[00:13:48] Torsten Schimanski: I would love to, because the whole thing came up as an idea. So, for Jan, and to play on this picture, I was sitting on top of a mountain in Switzerland and I thought, "What if we handle workforce development differently?" Because we are doing quite a few things already, and if you see the numbers from Deloitte and the Manufacturing Institute, we are a little bit late. And there is no way that within the next two to three years, we are going to fix a work gap issue of more than 2 million individuals. And we are also too late to fix that until 2033 or 2030. And with more companies coming to the United States, the issue will be accelerated. We are just too late.

So, the idea or the thought was: What would happen if we are going to bring a workforce person together with a supply chain person? And what would happen if we are using supply chain techniques to the workforce issue?

So, what if we go and we compare demand planning with a workforce forecasting, how would we tackle it? How would we make it a little bit more professional? What if a sourcing strategy could lead to talent acquisition channels? What if quality assurance could be used for talent fit and retention? Retention—big topic by the way. Or supplier relationship management—we call it a retention strategy in workforce development.

So, the same techniques as a critical element to every single company. And I think you are way more expert in supply chain than I am, but if you don't owe your supply chain, you are going to go under. We are treating workforce development in the same way, because without workforce, without a qualified workforce, you go under. And that was the idea to compare two fields, and maybe merge skills to have a better outcome.

[00:15:49] Terry Onica: What do you think is gonna happen if we don't address this problem? As you stated, it's going to take some time to do this, but what will happen? What do you foresee? That's one of the things that scares me is just how is this gonna end up if we're not successful at bringing people into manufacturing.

[00:16:09] Torsten Schimanski: Yeah, we are moving now to the dark side. I couldn't see that. Well, what we are going to see if a workforce is not there and or the right workforce is not there—and we have seen that especially during COVID times and right after COVID—that if staff members do not have the education with a high turnover rate, we can see that the quality level goes down. And all of a sudden, I don't have the quality in my product anymore that leads to faulty parts. I have to do them again. It's going to cost me a lot of money and it cuts into my margins.

When you see your facility and think about maintenance, without the right staff, you cannot maintain your machines, and all of a sudden you have downtime. That, again, will lead to frustration, cuts into your profits, and then you again have a retention issue eventually.

So worst case scenario, those companies that will not be able to get it under control will always be in the situation that they have to find staff members from other companies and they have to pay them more.

So now, you probably would ask, is that an employee or is that a mercenary that I'm hiring? Because if I get you, Terry, to work in my company because I'm offering you $2 more an hour, what am I'm going to do in half a year when someone is offering you another $2 on top of that? And that's not really sustainable.

The other aspect of it is automation. We have to look into automation and we have to see what kind of jobs and what part of the jobs can be done by machines and robots and or AI. And so, the reason why I'm saying that is so simply because of the fact, as you mentioned at the beginning I'm from Germany originally—I think based on my accent, I also cannot really hide it. But the point is, a country like Germany is competitive with their products, world champion in exporting machines and machinery and technology. How can they be competitive if wages are even higher than they are in the United States? And the only way to do that is actually through mission technology, that is supporting and also keeping the cost down. So, if you ask for my personal opinion, I believe that is exactly what's going to happen.

You get it under control, you get your workforce, your talent development under control, and or you go under, and or you're going to invest into more machinery. But don't get me wrong. if you cannot find the workforce for the production line today, and let's say you bring in two, four, or five welding robots instead, who is going to maintain your robots? Who's going to teach the robots?

So, all of a sudden you have the workforce development issue on a higher quality level. So, the only way really is to take care of it, and to actively work on your talent development and workforce development pipeline.

[00:19:14] Terry Onica: How do organizations find you—these small and midsize manufacturings to get your assistance? Question one.

And then, question two, how can you help them to develop strategies so that they can avoid this and really grow their workforce?

[00:19:29] Torsten Schimanski: We are in constant contact with around about 8,000 companies in New Jersey that we are working with. We have a lot of history over the last 25 years, and it's about a relationship network. It's about getting the feedbacks that you need and being recommended to other companies because most manufacturers do stick together in their personal networks.

So, this is the way how we are engaging with companies and also providing solutions. We are working with the manufacturing institutes. We are part of a NIST. We are offering solutions that we are actively bringing to these companies. We are identify the status quo of these companies by an assessment. It's usually a free assessment that we are offering. So, we are coming in, identifying the areas of work, and then offer solutions.

We are working with a network of around about 100 experts at NJMEP that are supporting this because we do not have all the know-how on staff, because otherwise the company would be five times larger. So, we have experts, specialists that are coming on board for these projects and helping these companies to then move forward.

It comes to the point that these companies also have to have to be in the right mindset. And when you walk into a normal manufacturing company these days—an average company, and let's call it that—there are around about 25 to 35 employees working there. Then you have one individual that is responsible for HR and payroll and helping out with the admin desk—sometimes writing invoices. And well, if there's someone missing on the production line or on the shipping line, then that individual is helping out there as well. So, often enough, parts of HR are outsourced.

So, it is easy to sit here and to say, "Well, you have to take care of your workforce development pipeline." But yeah, of course you also have to make the time, you have to have an individual that is taking care of it. So it has to come up on the priority list. I think that's the key—the core element here.

[00:21:41] Jim Liegghio: It's a good lead in, Torsten, that the thought I was just having—the question I was gonna have is: Is this a consistent push? Is this a steady push? We're trying to build Rome in the next couple years here, or is it very cyclical? Is this more of a cyclical effort that depends on ebbs and flows in the economy or hiring and retention strategies, that kind of thing? Like what is the regularity of your efforts and how does that play into the world you're trying to build here? Let's say.

[00:22:03] Torsten Schimanski: Well, the issue is there. Everybody's aware of it. Every single company is feeling it. So therefore, this is not new. Absolutely not. And as you mentioned, the Deloitte Review is a little bit older—the first one and the second one. So, they doubled up on it for obvious reasons. They wouldn't do it if there is not a certain need.

So the change has to come now. And from my point of view, it starts with the individual mindset. I do remember a client that I talked to about apprenticeship, for example, and the answer was, "I'm not going to invest into this. This is the work and the job of the government." It's an interesting take, and of course everybody has their own opinion and their personal point of view.

My take on this one is: If you wait for the government to fill the jobs in your facility, I'm really concerned about your facility because it's not going to happen. So, in this case, help yourself because no one else is going to. But all the tools are there. And like a big box of Lego at home, it doesn't make sense if you have all the stones sitting on the floor, but if you start putting them together in a certain order—and this is what we are helping our clients with—then all of a sudden it does make sense. And you can start thinking about sourcing your future workforce from the families of your existing workers. Start working closely with your local community colleges or the trade schools. Find a way to your own legislator in your town. Make sure there is some advertising that you find people that are going to talk on behalf of your industry and or your company. So, getting involved is a big topic.

We offer in New Jersey a program called Makers and Creators. This is where we are going to 21 schools in 21 counties in New Jersey, and we are introducing manufacturing. The program is supported by NJEDA. We have around about 200 to 600 students that are walking through our showcasing of welding CNC technology, additive manufacturing, and robotics. We also invite companies that are going to showcase what they're doing, the kind of jobs they're offering, and all the kind of jobs that they're offering maybe in 4, 5, 6, 7 years. Because they do have an idea looking at their shop floor, noticing that everyone there is 60 and older. There is something going to happen in the next 5, 6, 7 years.

So, we have five to seven companies that are usually joining us for these events, out of 10,000. And this is where you make a difference for your company and as well for the industry.

[00:24:47] Jan Griffiths: And I believe that it is so very important for young people to see and visualize what these roles actually mean and what they do. So, I think, you know, what you're doing is absolutely the right thing to do.

[00:25:02] Terry Onica: So, Torsten, you are from the New Jersey MEP. If there are manufacturers in other states that are interested in the work that you're doing, do they reach out to you or to their local state MEP?

[00:25:17] Torsten Schimanski: Because I'm afraid that after this podcast we'll have 30,000 people calling me. My recommendation is the following: There is a tool online that is called Find Your Local MEP or your local Manufacturing Extension Program. It's hosted on the NIST site—NIST MEP site—and it's easy to find. You will find your local, closest MEP. If you cannot find it, you will find me on LinkedIn, and I'm definitely going to help you out.

[00:25:47] Terry Onica: That's great. I'm sure many people are gonna be interested.

[00:25:49] Jan Griffiths: Torsten, what is the very first step a manufacturing company should take? Is it to find their local MEP contact, or what is your recommendation for the action item that they should take right now to start to address this issue of workforce development?

[00:26:06] Torsten Schimanski: Always reach out to your local MEP. So, that's the advertising part of the answer. But what I think every company should do as a first step before reaching out to anyone is to map out the critical skillset that you need for your organization that you need today, on the one hand side. And then, take it to the next 1, 2, 3, 4, up to 10 years to see what's going to happen. It sounds complicated, but to be honest, if you ask your workers on the shop floor, they know the answer by heart. Within a minute. Even though they're not HR experts, they know the gaps, they know the issues, they know what's missing. And of course, you are going to get an answer like, "Oh, five years, everything was better." For whatever reasons. But this is how you identify the gap.

In terms of mindset, you also have to stand to the fact that there is a gap and acknowledge it, and see that this is crucial to the future of your business, to the future of your products, to the future of your innovations, and to the future of those that are working at the company right now. Not everybody is going to retire within the next five years. There is a mix of people, and they're taking it to the next level. They're bringing it into the 2030s, 40s, and 50s.

But this not science fiction or an exercise for someone who is a visionary. This is really very simple, bringing it back to supply chain, demand planning. In this case, for your workforce.

And if the idea is going to make a few people think and think, "Oh, why shouldn't I bring someone with supply chain workforce development and HR in a meeting? Let's see what's going to happen." I'm a big fan of design thinking and agile and Scrum. This is exactly what we are doing in these kind of projects, so why not here?

[00:27:57] Jan Griffiths: Perfect. That's a perfect way to close today. Torsten Schimanski, thank you so much for joining us.

[00:28:03] Torsten Schimanski: Thank you so much for having me, and I'm always happy to help and to support. Thank you again for the opportunity.

[00:28:11] Jan Griffiths: We love to hear from our listeners, reach out to any one of us, our contact information is in the show notes. And if you want to dive deeper into our content, check out our website at autosupplychainprophets.com.