The mystery of the missing machine operators, explained
In 2018, an extensive Korn Ferry report predicted that more than eight million global manufacturing jobs could go unfilled by 2030. Four years and one pandemic later, Chief Revenue Officer Adam Crandall of automation company Dynamic Designs Solutions reported:
“In the manufacturing space today we’re seeing huge issues with labor shortages. Companies across the space are having extreme difficulties obtaining the right kind of talented personnel in order to help meet the demand of today's marketplace and they simply can’t hire fast enough. It’s a huge challenge, one that's continuing post-pandemic and one that we don’t see easing off any time soon.”
More college graduates than in the past, looking for higher-paying work, spend less time in vocational practical work and more time in computer-type work. Likewise, laborers not wanting to work two or three jobs look for higher-wage positions.
More industrial production and manufacturing jobs are being “reshored” to America. Indeed, Kearney’s 2021 Index reported that 92 percent of executives express positive sentiments toward reshoring and that 79 percent of executives who have manufacturing operations in China have either already moved part of their operations to the United States or plan to do so in the next three years. Another 15 percent are evaluating similar moves. The growing demand for machine operators is overwhelming an already short supply.
More young people are leaving the manufacturing labor force for employers such as UPS or Amazon that offer higher entry wages and bonuses, while many young workers go from job to job collecting sign-on bonuses, according to Industry Week. Even though most manufacturers have raised their minimum wages to $15 an hour, entry-level non skilled workers can get paid $22 at companies like Amazon.
Factors like better education, better healthcare, improved access to birth control products, and raised legal age of marriage are driving down birth rates across the world, with experts predicting that the working population will plummet as early as 2050.
The Great Resignation and Reshuffle
Then there was COVID-19. The pandemic accelerated the labor shortage in manufacturing. Machine operators lost wages because of plant shutdowns or reduced hours. Other laborers exited the workforce in search of safer, more flexible, higher paying opportunities.
The labor gap will probably get worse rather than better. According to the United States Census Bureau, nearly one-fourth of the manufacturing workforce is age 55 or older. As these older workers retire, younger workers are avoiding manufacturing jobs in favor of technology, healthcare, and other opportunities where working conditions and compensation are more attractive.
Indeed, Deloitte projects a gap of 2.1 million unfilled manufacturing jobs by 2030. There are simply not enough workers available to fill the roles. To describe this threat to manufacturing as “existential” is not an exaggeration as many economists see the imbalance in labor supply and demand as at the heart of America’s current economic challenges. They say that fixing it is critical to the continued growth of the American economy.
What to do?
In August 2022, employees of the Aerospace Joint Apprenticeship Committee (AJAC) considered their options. These included:
Recruiting participants from contingency staffing services that are ready to work at a moment’s notice. These companies handle everything from employment screening to onboarding. You can also solicit employee referrals (see whom they know), post your job online and keep a database of potential candidates on hand.
Establishing long-term job training programs and offering workers incentives like tuition reimbursement.
Partnering with educational institutions and developing paid internship programs for high school graduates.
Matching the starting wages of Amazon, FedEx and similar companies to incentivize entry workers.
The problem with these and other options is that most strategies take years to put in place before they generate significant results. All are expensive, driving increased labor costs and raising the price of finished foods. Even with these measures in place, your frontline laborers will still tend to leave when they get higher-paying jobs. Even if you manage to resolve these issues, the fact is that there simply aren’t enough candidates to fill all of your open machine operator roles. In short, you need a more effective and persistent solution.
Further options include:
Utilizing remotely controlled equipment (also called next-generation production monitoring), where workers operate virtual machines long distance, from anywhere in the world with no detectable time lag. It gives workers more flexible working conditions but doesn’t stop them from leaving for higher wages. This can reduce the number of workers you need to keep your facility running at full capacity, but requires higher skilled workers who may be even more difficult to recruit and retain.
Adopting robotic process automation (RPA), where you install collaborative robots to automate your manufacturing operations. These cobots safely work alongside human partners to accomplish many common tasks, such as handling materials, assembling items, palletizing, packaging and labeling, inspecting product quality, welding, press-fitting, driving screws and nuts, tending machines, and so forth. The robots work more efficiently, consistently and precisely than humans, ramping up quickly to match workload peaks and respond to big demand spikes.
How about RPA?
Studies suggest collaborative robots are the best way to fill the global labor shortage. These robots free up workers for critical tasks, help reduce workplace injuries and associated downtime by taking over hazardous or repetitive jobs, and entice young employees attracted to tech to your workforce, among other benefits. They can also contribute to greater employee retention, as workers can be moved onto more complex and interesting work while robots take over the boring work.
Robotic automation is about more than just mitigating the impact of the ongoing labor shortage. Effective automation can improve capacity while significantly reducing labor costs, meaning that it leads directly to American manufacturers being more competitive on cost with overseas competitors. RPA helps manufacturers improve throughput, win new business, and grow, rather than just survive.
On the other hand, the whole process of traditional robotic automation can be a hassle, and is often too expensive to be easily justified by most manufacturers. Disadvantages include:
High upfront investment. Deloitte estimates that one simple bot could cost you anywhere from $4,000 to $15,000. Any traditional automation deployment requires a systems integrator, which can cost as much as ten times the robots themselves, for an average cost to automate of more than $250,000.
The cost and complexity of traditional RPA doesn't allow for incremental adoption of automation. That means that even smaller facilities will need to commit all-in to automation, which may be too costly, time-consuming, and risky to be practical.
Unpredictable additional costs of RPA implementation including the cost of the initial business processes analysis, upgrading or reorganizing your facility to accommodate the integration, and the need to hire staff to service and maintain the robot. Plus the cost of rehiring a systems integrator to reprogram and redeploy a robot should your needs change, which can cost almost as much as the original deployment.
Cyber security risks, with hackers using your robots as a vulnerable end point to access your IT system and harm your company. This risk may require manufacturers to hire additional IT support staff to keep connected robots safe.
Traditional automation is out of reach for most smaller manufacturers for these and other reasons. But luckily there's a new way of doing things.
Around five years ago, companies like Rapid Robotics adopted a subscription-based model called Robotics-as-a-Service (RaaS), allowing you to deploy robots without buying them. The advantages of this business model include the following:
RaaS offers more predictable costs with little to no upfront capital required to get started. You pay providers like Rapid Robotics a fixed monthly rate, regardless how often or how long you operate your robots. This eliminates the massive upfront CapEx of traditional automation, and delivers nearly instant ROI and savings on labor costs. It’s more akin to hiring a new workforce than it is to purchasing equipment.
RaaS providers like Rapid Robotics offer always on, 24/7 support, which means you don’t need any in house robotics expertise or additional IT support to keep your robots running. Unlike traditional automation deployments, your RaaS partner is dedicated to servicing and maintaining the robots so you can focus on growing your business.
You get robots that are pre-trained on required manual tasks and that you can deploy straight out of the box in a matter of days, rather than waiting the usual 2-3 months for RPA readiness. The RaaS approach reduces risk, frees up your CapEx for other purposes, and gives you almost instant ROI.
RaaS gives organizations the ability to rapidly scale up and easily redeploy robots in response to changing market conditions and client needs. This means that as your needs change, new robots can be deployed in days, and your existing robots can be moved to another task in a matter of minutes, thanks to the pretrained AI. That’s in contrast to traditional automation that’s specialized to a single task, so it can't be redeployed without massive costs and downtime. This makes these robots perfect for small contract manufacturers with their high mix operations and sometimes unpredictable volume.
RaaS allows businesses to approach automation as an incremental process, rather than a single giant process. Incremental automation gives manufacturers the opportunity to test, learn and validate after each deployment, and to automate incrementally over time. This helps you scale your RPA to meet your changing business needs.
When and how to get started with RaaS
It’s no exaggeration to say that labor shortage is killing American manufacturing. There simply aren’t enough workers to do the jobs. In order to keep the machines running, American manufacturers need to find alternatives to human labor. And that’s robotic automation.
Robotic automation will be a key factor in determining which manufacturers grow over the long term, and which fade away. For those interested in continuing to thrive, the time to get started with robotic automation is right now, not 6 months from now, and definitely not five years from now.
Luckily, by partnering with Rapid Robotics, you can have a robot working on your floor in a matter of days for as little as $4/hour. Automate your tasks now, get instant ROI, and position your business to grow as labor costs rise.
To find out more about how you can solve your labor shortage, improve operational efficiency and transform your business into the fast, flexible, growth-oriented manufacturer of the future, contact Rapid Robotic now for a free automation consultation.
For more information on how Rapid Robotics can automate steps in your manufacturing process, go to rapidrobotics.com/contact-us for a free automation consultation.