Kansas Advanced Manufacturing - Wichita State University, Wichita

Kansas Advanced Manufacturing 2008

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2008

Center for Economic Development and

Business Research

W. Frank Barton School of Business

Wichita State University

August 2008

Kansas Advanced Manufacturing


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Kansas Advanced Manufacturing – Summary of Findings

The Center for Economic Development and Business Research, W. Frank Barton School of

Business, Wichita State University was given the task of analyzing various industry clusters in

the state of Kansas. The objective in doing the analysis is to analyze historical employment

trends, identify strengths and weaknesses within the industry cluster, identify future

occupational needs of the cluster and identify employers’ perceptions of the current workforce

supply. Notable findings are listed below:

The Advanced Manufacturing cluster in Kansas comprised over 15 percent of all jobs in

the state in 2006.

Wages supplied to Advanced Manufacturing employees comprised over 19 percent of all

wages in the state of Kansas in 2006.

The average annual wage of a manufacturing employee in 2006 in the state of Kansas

was $43,197 – which is 8.1 percent above the average annual wage in the U.S.

Transportation Equipment Manufacturing is the largest industry within the Advanced

Manufacturing cluster with over 41,000 employees statewide.

Sedgwick County employed 28.5 percent of all manufacturing employees in 2006 with

over 50,000 employed.

By 2014, 49,500 employees will be needed in the various Advanced Manufacturing

industries.

In general, the Advanced Manufacturing cluster is strongest in the Northeastern, South

Central and Southeastern portions of the state of Kansas.

Kansas is rivaled in industry concentration compared to the U.S. by Iowa and Arkansas.

Arkansas and Iowa are both strongest in the food manufacturing industry, while Kansas

is strongest in the transportation manufacturing industry.

The Advanced Manufacturing cluster will need employees at all levels of education. The

most predominate occupations needed by 2014 include supervisors and managers,

engineers and technicians.

In general, Advanced Manufacturers felt that hiring qualified employees with the correct

skill sets had become more difficult compared to five years ago.


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Kansas Advanced Manufacturing – Defined

Advanced Manufacturing refers to a variety of industries involved in the physical

transformation, production or development of a material into a new, tangible product. This

CLUSTER includes a variety of products from fertilizer to composite materials. The cluster is

defined by the North American Industrial Classification System as sectors 31-33.

Kansas’ Strengths

Transportation Equipment The transportation equipment sector employs more than any other sector in manufacturing,

41,045 individuals in 2006. This sector is composed of automobile and motor vehicle parts,

aerospace products and parts, and ships and boats. The largest employer in Kansas, Cessna

Aircraft Co., is included in the transportation equipment sector.

Food The food manufacturing sector is composed of industries whose primary purpose is to transform

agricultural and livestock products into a final good. Food manufacturing is the second largest

sector in manufacturing when measured by employment, with 30,804 employees in 2006. Two

of the largest employers in Kansas are Cargill Meat Solutions and Tyson Fresh Meats.

Key Locations The number of manufacturing employees is largest in Sedgwick County, Johnson County and

Wyandotte County, respectively. The highest average annual wage and the largest number of

manufacturing establishments are in Sedgwick County.

The top two growth sectors in

manufacturing from 2001 to

2006 in Kansas include

furniture and related product

manufacturing and primary

metal product manufacturing.

Each experienced more than

1,00o new employees over five

years.


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What’s next for Advanced Manufacturing?

Advanced Manufacturing is an important industry of the Kansas economy. Advanced

manufacturing companies supplied 15.4 percent of all employees in the Kansas economy in

2006. Nationally, advanced manufacturing supplied 11.4 percent of all employees. The average

annual wage for all industries in the United States in 2006 was $39,965. The average annual

manufacturing wage in the state of Kansas in 2006 was $43,197.

Nationally, the manufacturing industry is expected to decrease in total employment from 2006

to 2016 by 10.6 percent. Manufacturing in Kansas is expected to increase from 2004 to 2014 by

an estimated 12.3 percent, or a 16,500 position increase. However, the total openings through

2014 are expected to surpass 49,500 positions due to employee turnover and retirement. One of

the largest challenges facing the industry is and will be the supply of qualified workers within

the manufacturing industry.

The occupations with the largest concentration of positions in manufacturing in 2004 included

team assemblers, slaughterers and meat packers, and first-line supervisors/managers of

production and operating workers. These positions do not, currently, require formal education

or certificate programs. These occupations instead require on-the-job training or work

experience in related occupations. As the baby boomers leave the workforce, it will not only be

difficult to find skilled employees, but also to train new employees in these non education-based

occupations.

Manufacturing Employment as a Percent of Total Employment, Kansas and U.S.

Source: County Business Patterns, U.S. Census Bureau, 2006.

17.1%

16.3%15.8% 15.5%

15.9%15.4%

13.9%

12.8%12.5%

12.0% 11.8%11.4%

10.0%

12.0%

14.0%

16.0%

18.0%

2001 2002 2003 2004 2005 2006

KS US


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Kansas Advanced Manufacturing Cluster Statistics (2006)

Number of Establishments 3,165

Number of Jobs 176,444

Percent of All Kansas Jobs 15.4%

Average Annual Manufacturing Wage $43,197

Total Manufacturing Wages Paid $7.6 billion

Level Change in Total Wages Paid from 2001 $320.2 million

Percent Change in Total Wages Paid from 2001 4.4%

Employment Industry Concentration 1.36

Source: County Business Patterns, U.S. Census Bureau, 2006.

Top Five Advanced Manufacturing Industry Sectors

Rank Industry Sector Employed Percent of Manuf. 1 Transportation Equipment 41,045 23.3%

2 Food 30,804 17.5%

3 Machinery 19,331 11.0%

4 Fabricated Metal Products 16,013 9.1%

5 Plastics and Rubber Products 12,384 7.0%

Balance of Advanced Manufacturing 56,867 32.2%

Kansas Advanced Manufacturing 176,444 100.0% Source: County Business Patterns, U.S. Census Bureau, 2006.

Top Five Advanced Manufacturing Counties by Employment

Rank County Employed Percent of Manuf. 1 Sedgwick 50,312 28.5%

2 Johnson 19,983 11.3%

3 Wyandotte 12,026 6.8%

4 Shawnee 6,146 3.5%

5 Ford 6,026 3.4%

Balance of Advanced Manufacturing 81,951 46.4%

Kansas Advanced Manufacturing 176,444 100.0% Source: County Business Patterns, U.S. Census Bureau, 2006.


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Kansas Advanced Manufacturing Industry Employment Levels

Industry 2006 Employment

Percentage of Manufacturing Employment

Manufacturing 176,444 100.0%

Transportation Equipment Manufacturing 41,045 23.3%

Food Manufacturing 30,804 17.5%

Machinery Manufacturing 19,331 11.0%

Fabricated Metal Products Manufacturing 16,013 9.1%

Plastics and Rubber Products Manufacturing 12,384 7.0%

Printing and Related Support Activities 10,557 6.0%

Chemical Manufacturing 6,744 3.8%

Nonmetallic Mineral Products Manufacturing 6,219 3.5%

Furniture and Related Products Manufacturing 6,078 3.4%

Computer and Electronic Products Manufacturing 5,955 3.4%

Miscellaneous Manufacturing 4,879 2.8%

Electrical Equipment, Appliance, and Component Manufacturing 4,369 2.5%

Paper Manufacturing 2,736 1.6%

Wood Products Manufacturing 2496 1.4%

Primary Metal Manufacturing 2,289 1.3%

Petroleum and Coal Products Manufacturing 1,829 1.0%

Textile Product Mills 1,189 0.7%

Beverage and Tobacco Products Manufacturing 549 0.3%

Apparel Manufacturing 530 0.3%

Textile Mills 175 0.1%

Leather and Allied Products Manufacturing 175 0.1% Source: County Business Patterns, U.S. Census Bureau, 2006.

Kansas Advanced Manufacturing Industry Employment Distribution

Transportation Equipment

23%

Food 18%

Machinery 11%

Fabricated Metal Products

9%

Plastics and Rubber Products

7%

Printing and Related Support

Activities6%

Industries with less than 5% but more than 1% of

all Manufacturing

Employees26%


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Summary of Kansas Advanced Manufacturing Industry Sectors by Total Employment

Industry Employment Industry

Concentration* Number of

Establishments Total Wages

Paid ($1,000's) Average Annual

Wage

All Advanced Manufacturing 176,444 1.36 3,165 $7,621,873 $43,197

Transportation Equipment 41,045 2.65 187 $2,460,212 $59,939

Food 30,804 2.22 287 $987,885 $32,070

Machinery 19,331 1.80 329 $820,257 $42,432

Fabricated Metal Products 16,013 1.07 566 $571,988 $35,720

Plastics and Rubber Products 12,384 1.44 143 $475,385 $38,387

Printing and Related Support Activities 10,557 1.73 379 $364,121 $34,491

Chemical 6,744 0.88 142 $363,477 $53,896

Nonmetallic Mineral Products 6,219 1.35 225 $261,565 $42,059

Furniture and Related Products 6,078 1.17 179 $182,173 $29,973

Computer and Electronic Products 5,955 0.59 96 $315,848 $53,039

Miscellaneous 4,879 0.75 231 $163,236 $33,457

Electrical Equipment, Appliance, and Component 4,369 1.09 56 $184,259 $42,174

Paper 2,736 0.65 29 $109,544 $40,038

Wood Products 2,496 0.45 116 $73,693 $29,524

Primary Metal 2,289 0.53 41 $84,138 $36,758

Petroleum and Coal Products 1,829 1.86 30 $124,790 $68,229

Textile Product Mills 1,189 0.80 52 $28,806 $24,227

Beverage and Tobacco Products 549 0.37 21 $25,353 $46,180

Apparel 530 0.26 37 $13,877 $26,183

Textile Mills 175 0.10 13 NA NA

Leather and Allied Products 175 0.48 6 NA NA Source: County Business Patterns, U.S. Census Bureau, 2006.

*Industry Concentration refers to the industry concentration in Kansas versus the industry concentration in the U.S. A value above 1 indicates a stronger concentration in Kansas than

that of the U.S. A value equal to 1 indicates the same level of concentration in Kansas versus the U.S. A value below 1 indicates a weaker concentration in Kansas versus that of the U.S.

Bolded industries indicate industries with average annual wages above that of the U.S. annual average wage of $39,965.


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5 Key Occupations

The Occupational Alignment used in this portion of the analysis is based on the Kansas Department of Labor’s Occupational Outlook and degree

completions obtained through the Kansas Board of Regents. An Index (in bold) was calculated based strictly on economic criteria. Equal weights

were given to four criteria including the Median Annual Wage, Base Year Employment (2004), Total Openings (2004 to 2014) and the Additional

Training Needed. Indices can range from 0 to 4. The larger the index value, the higher the economic impact the occupation has in Kansas.

Below are three charts listing various Advanced Manufacturing Occupations. The first table illustrates employment needs at all education levels.

The second table illustrates employment needs for bachelor degree holders. The third table illustrates employment needs for technical education,

certificate programs and associate degree holders. It is important to keep in mind that occupations were ranked based on the calculated index

mentioned above and the occupational openings DO NOT include current shortages.

Occupational Alignment, Advanced Manufacturing, All Education Levels

Occupational Title Educational Attainment

Median Annual Wage (2004)

Base Year Employment

(2004)

Projected Year

Employment (2014)

Total Openings (2004 to

2014) Total

Completers Training Leakage

Total Number Needed to Be

Trained

Additional Trained Workers Needed Index

1. General and Operations Managers Bach + $69,243 2,329 2,668 779 664 31.1% 1,130 466 3.50

2. Industrial Production Managers

Work Rel. Occ. $78,749 1,582 1,949 672 - 0.0% - - 3.25

3. Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products Moderate $50,981 2,984 3,303 1,101 - 0.0% - - 3.00

4. First-Line Supervisors/Managers of Production and Operating Workers

Work Rel. Occ. $44,637 6,179 7,064 2,176 - 0.0% - - 3.00

5. Chief Executives Bach + $112,341 495 558 156 133 31.1% 227 93 2.75


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Occupational Alignment, Advanced Manufacturing, Bachelor’s Degree ONLY




(2004)

Projected Year

Employment (2014)


2014) Total



Trained


1. Computer Software Engineers, Systems Software Bachelor's $74,880 708 974 75 491 46.5% 631 140 2.75

2. Computer Systems Analysts Bachelor's $62,130 389 474 107 36 38.4% 210 174 2.75

3. Computer Hardware Engineers Bachelor's $77,626 412 486 67 150 47.5% 278 127 2.75

4. Electrical Engineers Bachelor's $65,894 727 853 123 276 47.5% 509 234 2.75

5. Industrial Engineers Bachelor's $62,962 1,744 2,072 345 777 47.5% 1,435 658 2.75

Occupational Alignment, Advanced Manufacturing, Technical Education or Associate’s Degree




(2004)

Projected Year

Employment (2014)


2014) Total



Trained


1. Mechanical Drafters Postsecondary $39,000 500 570 212 29 62.7% 569 540 2.50

2. Electrical and Electronic Engineering Technicians Associate $47,299 719 812 245 206 18.6% 301 95 2.50

3. Industrial Engineering Technicians Associate $42,286 661 888 364 306 18.6% 447 141 2.25

4. Mechanical Engineering Technicians Associate $42,682 282 312 86 72 18.6% 105 33 2.25

5. Electrical and Electronics Repairers, Commercial and Industrial Equipment Postsecondary $42,890 343 360 95 125 25.5% 127 2 2.25


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Available Workforce as Perceived by Cluster Industry Leaders

The Docking Institute of Public Affairs interviewed leaders from advanced manufacturing

companies in the State of Kansas on May 12 and May 23, 2008, EXCLUDING any aerospace and

defense and motor vehicle companies, which will be featured in subsequent reports. Employers

with the largest workforces were targeted for interviewing. Twenty interviews were completed.

Interviews were designed to assess industry leaders’ perceptions of strengths and weaknesses of

their cluster’s workforce quality and supply in Kansas, types of training on basic and industry-

specific skills most needed among new hires, and anticipated growth in cluster workforce needs

over the next 10 to 15 years.

Occupational Segmentation as Perceived by Industry Leaders

Clerical and Office Staff

12%

White-Collar Professionals

11%

Engineers, Designers, Others…

4%

High-Skilled

Blue-Collar16%

Low- and Semi-Skilled Blue-Collar

57%

Advanced Manufacturing Workers


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Supply of Workers by Skill Level

Ease of Hiring by Skill Level

0 2 4 6 8 10 12




High-Skilled Blue-Collar


Number of Respondents

Job

Cat

ego

rie

sAdvanced Manufacturing - Supply of Workers

Abundant Supply

Adequate Supply

Small Shortage

Large Shortage

0 2 4 6 8 10 12 14




High-Skilled Blue-Collar



Job

Cat

ego

rie

s

Advanced Manufacturing -Ease in Hiring Good Workers Compared to 5 Years Ago

Easier

About the Same

More Difficult


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Preparation of New Hires

Skill Sets Needed

Training Needs Public Education Might Address

0 2 4 6 8 10 12 14 16 18

Leaving High School

Leaving CC/Tech School

Leaving College

With Advanced Degree


Edu

cati

on

Le

vels

Advanced Manufacturing -Preparation of New Hires Coming to Work with...

Very Prepared

Somewhat Prepared

Not Prepared

1. Fundamental Reading/Writing Skills

2. Fundamental Mathematical Skills

5. Work Ethic/ Willingness to Learn


3. Fundamental Keyboarding/Computing Skills

4. Interpersonal Communication Skills

5. Work Ethic/Company Loyalty

Thinking of skills or skill sets needed at the workplace, are there certain skills that ____________ seem to lack or that could be improved upon?

3. Software Knowledge/Experience


4. Interpersonal Communication Skills

5. Work Ethic/Company Loyalty

3. Fundamental Keyboarding/Computing Skills

4. Shop Class/Trade Skills-Welding, Design

1. Fundamental Reading/Writing Skills

Four Year, Advanced, and Specialized Degree

HoldersHigh School Graduates Community College or Technical School Graduates

1. Practical Application of Education

1. Basic Keyboarding/Computer Skills

2. Knowledge of Purchase Orders and Invoices

3. AutoCad

4. English as a Second Language

5. General Clerical Skills

6. Manual Press and Molding

7. Industrial Fiberglass Arts

8. Professional Etiquette

When thinking about new AND current workers, do you have industry-

specific training needs that the public education system might

appropriately address?


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Definition of Terms

Cluster – refers to the concentration of employment within a given industry or industry sector

within a given region.

Industry Concentration – refers to the concentration of employment within a given

area relative to the United States. Industry Concentrations were calculated by dividing a given

area’s percentage of employment within a given industry, relative to all employees, by the

nation’s percentage of employment within a given industry, relative to all employees in the

nation. An industry concentration above one implies a strong or high potential industry

concentration within the given area; a low industry concentration implies a weak or low

potential industry concentration within the given area.

Educational Attainment – refers to the required level of education needed to obtain a

job in the respective occupational code.

Total Openings – refers to the total number of job openings from turnover and from

occupational growth in the respective occupational code.

Total Completers – refers to the expected number of instructional program completers

attributable to the respective occupation from 2004 to 2014. This analysis assumes a constant

annual rate of instructional program completers based 0n 2006 completer numbers obtained

through the Kansas Board of Regents.

Training Leakage – refers to the number of program completers that are not expected to

work in Kansas six-months after degree completion.

Total Number Needing to Be Trained – refers to the number of program

completers needed to fill all job openings from 2004 to 2014 in the respective occupation.

Additional Trained Workers Needed – is the difference between the Total Number

Needing to Be Trained and Total Completers.

Kansas Advanced Manufacturing - Wichita State University, Wichita

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