If you run a manufacturing facility in Florida, you probably didn’t wake up this morning thinking about productivity. You woke up thinking about overtime. About the order that took a week to get out the door when your competitor ships in three days. About the machine that sits idle through every changeover, the scrap piling up in the corner, the supervisor who spends the whole day putting out fires and never gets an hour to plan.
No manufacturer has ever called me to say they have a productivity problem. They call me about those other things. But they are the same problem wearing different clothes.
October is Manufacturing Month, which makes it a good time to say the quiet part out loud: Florida has won the manufacturing growth war but is lagging in productivity.
The growth is remarkable, and most people still have no idea it has happened. Manufacturing gross domestic product here has climbed from $40.3 billion in 2014 to $88.8 billion today. We have nearly 28,000 manufacturing facilities, third-most of any state, and roughly 430,000 Floridians make their living in them.
Now the other numbers. On average, a Florida manufacturing worker turns out $207,610 in product a year. The national average is $238,164, a difference of more than $30,000 per worker. Across our workforce that comes to almost $13.1 billion a year in output this state never captures. Closing that gap would create jobs, encourage investment, fund raises and bonuses, and generate tax revenue without raising taxes. It is one of the greatest economic opportunities in front of Florida.
So why does this productivity gap exist? Partly from growth. We have added companies and workers faster than almost any state, and a new operation takes years to hit full output. Partly from history. Many of our manufacturers are second- and third-generation companies whose processes have worked for decades, and nothing has forced a second look. And more than 80% of Florida manufacturers have fewer than 20 employees, which means everyone is wearing several hats just to keep the day running.
Sometimes the problem is budget. Often it is a concern that sounds like this: “Change means robots, and robots mean layoffs.” Actually, the evidence runs the other way. A-1 Industries in Fort Pierce makes wooden trusses. Working with an adviser from our FloridaMakes network, they put $2 million into robotics aimed at the repetitive, injury-prone work on their floor. They kept all 65 of the employees they had, then added 65 more. Automation tends to absorb the work that is dangerous, repetitive, or impossible to hire for, and what it frees up is capacity. Capacity is what pays for raises, benefits and training.
So what should a manufacturer do? My advice: Don’t buy anything yet. Find your bottleneck first. Most owners I meet have a theory about their constraint, and it’s usually a good one. But it’s often also incomplete, and an outside perspective helps.
That is what an assessment is for. Ask a business adviser to visit your facility and tell you what they see, including where capacity is hiding and what it would take to free it. Florida has proven it can attract manufacturers. The next decade is about investing in the ones already here, so that Florida makes more, makes faster, makes better.
Destin Wells is vice president of strategic growth and partnerships at FloridaMakes, Florida’s federally designated Manufacturing Extension Partnership center, based in Orlando.