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Industry Report: Automation and the Manufacturing Workforce

By Eric Peterson | Oct 04, 2022

Aerospace & Electronics Industrial & Equipment Energy & Enviro Contract Manufacturing Arizona California Colorado Texas Utah

A concerted federal push and snarled overseas supply chains are boosting manufacturing in the U.S. in a time of economic uncertainty.

Automation is a key to the comeback. A tech-savvier manufacturing workforce is a parallel need.

Generally, manufacturers are ahead of the curve, but there is plenty of low-hanging fruit to harvest. Many contract manufacturers have recognized bottlenecks tied to administration, not manufacturing, and strived to automate business processes in tandem with the factory floor.

"Administrivia" overload

Don Sweeney | Courtesy Ashling Partners

Ashling Partners is focused solely on process improvement via intelligent automation. The Chicago-based "global boutique" has locations in both Texas and California.

Ashling is the Gaelic word for "vision," and there's a reason for that. "We felt that the vision that people have had is finally coming to fruition through a consolidation of things like RPA, BPA, OCR -- the alphabet soup that makes up this space," says co-founder Don Sweeney.

The company's largest customer sector is manufacturing. "We work with manufacturing firms to help improve all of the processes that have not already been addressed by automation," says Sweeney. "Robots on the assembly line have now been within manufacturing for years, but the administration side has not been addressed."

Manufacturers "get the concept and value of automation," he notes. "Where I have not seen them become an early adopter is pivoting from that core metric of hours back to the business. Right now, manufacturing is still looking for a hard ROI in what they do for automation."

Like manufacturing automation, intelligent automation is all about getting employees focused on meaningful work instead of "mundane repeatable activity after activity after activity," says Sweeney.

Ashling conducted a survey on employee engagement in 2021; respondents said their roles were meaningful, but the majority of their workload was not. "A handful of their activities make a meaningful difference, but everything else is administrivia," Sweney explains "As the processes get smarter and machine learning processes get smarter, they'll be able to fill in the gaps."

One Ashling client, a shoe manufacturer in Minnesota, automated order entry. Because fall is the big shoe-buying season, the company no longer needs to enlist a small army of temporary workers to handle the increased workload. "Now the spike in your orders -- if there's seasonality in your orders -- there's no issue with that," says Sweeney. "Now they don't have to work until 10 o'clock at night, they don't have to work weekends. All of those things are significant to the employee."

Sweeney calls intelligent automation a "nice to have" for manufacturers in 2022, but forecasts it becoming a prerequisite by 2032. "They will eventually become table stakes," he says. "People coming into jobs in the next decade will expect these things to already be there."

Photo courtesy Oshkosh Corporation

As that transition occurs, expect to see a wide-ranging shift for the manufacturing workforce. "Employee experience is going to be the big change," says Sweeney. "Employees will spend more time engaging with other employees, being more collaborative, doing more meaningful activities for the company, and the data will already exist."

Regardless, most automation investments remain tied to "measurable ROI" for the time being, he notes. "A lot of it is still about quantifiable hours back to the business. I think that, over time in the manufacturing industry, we'll start to see more and more about the user experience and investment to keep and improve the employees that they have and upskill the employees that they have, but it's certainly going to take time to get there. . . . This is going to drive a significant effort to upskill and reskill workers. This is not going to be a small change."

Adds Sweeney: "I think that people, as they move towards this more meaningful work, they'll become more engaged as employees, because they're now doing work they feel makes a bigger difference. Once they become engaged, then they'll even want to do more. It becomes the Jim Collins flywheel concept where there's more and more engagement, more and more productivity, because they're seeing the results themselves."

Greg Grey | Courtesy Oshkosh Corporation

A member of the Fortune 500, Wisconsin-based Oshkosh Corporation has worked with Ashling since late 2019 to leverage intelligent automation. Greg Grey, Oshkosh's senior digital transformation manager, says the 15,000-employee manufacturer of emergency, industrial, defense, and postal vehicles and equipment is looking to boost revenue from $8 billion to $12 billion by 2026.

Automation will be a big part of that. While the company has long leveraged automation in manufacturing, the corporate treasurer recently pushed for automating business processes due to workforce issues. "He said, 'I've got people in their twenties and I've got people in their fifties in my department, and really very little in between,'" says Grey. "'I'm able to get brilliant people on this team that clearly don't want to be doing any mundane or repetitive types of tasks, and really want to be 100 percent value-add.' Part of his strategy with treasury was: 'Let's automate everything we can that's mundane and repetitive.'"

The department successfully implemented process automation with Ashling's help, and Oshkosh leadership subsequently tasked Grey to expand the strategy enterprise-wide in 2020.

"The majority of use cases we have gathered as well as implemented have been related to supply chain," says Grey. "In one case in particular, we had six buyers that, on the average, were writing 150 emails each per day to suppliers asking them where things were."

The result? "We were able to automate all of that. We completely took that off of their plate so they could focus on developing alternatives to the suppliers that we had, because that was clearly what we needed to do at that time."

Photo courtesy Oshkosh Corporation

Oshkosh also automated processes for accounts receivable. "We increased our collection rate exponentially as a result of that," says Grey. "We have automated to date the equivalent of 100 employees. We have not let go or laid off a single person with that. What we've done is basically rewrote job descriptions for folks as a result of that."

And that catalyzes employee engagement, he adds. "In 2017, we celebrated our 100th anniversary, and to many people, we were just a stodgy manufacturing company that's been around for 100 years. Now we're really looking at ourselves as a technology company, with the things we're doing with electrification and telematics, but also how we look at our work internally. We want to digitize as much as we can, and as far as those hands-on, mundane types of things, at some point, we'd like to say there's zero of that around and every position we hire for is something where it's 100 percent decision-making and value-add types of things -- and not keystrokes."

A means to an end on the shop floor

In Murray, Utah, Summit Peak Manufacturing has leveraged manufacturing automation since its founding in 2020, says CEO Ken Curry. As the contract manufacturer grows in the energy, aerospace, and semiconductor industries, the plan is to double down on automation in all areas.

"As we grow this business, we don't want to just grow it by employees," says Curry. "We want to grow by automation, by use of robots, and different things we're interested in doing."

That makes for different prerequisite skill sets, and a pair of employees in their twenties are up to the task. "They're really adaptable to automation," says Curry. "A lot of the challenge is to keep them challenged. That's a big thing for us: We want to give them opportunities to be challenged."

The quest to automate extends from the shop to the office: Summit Peak is implementing JobBOSS2 to help with the administrative workload. "One of the things we set out to do when we first opened this two years ago was to go as paperless as possible, and we've done a pretty dang good job with that," says Curry.

Brian McMorris, founder and president of Futura Automation in Scottsdale, Arizona, has worked in manufacturing automation for more than 40 years for organizations ranging from small businesses to Fortune 500 companies. He started Futura in 2017, and the company now has a presence in Arizona as well as California, Utah, and several other states.

Manufacturing automation inherently requires different skill sets in the workforce, but McMorris says it's rarely the impetus for investment. "The customer, as they become more technical with their manufacturing processes, they have to have more technical people to support that over time," he explains. "That elevates the jobs that are internal to customers, but the impetus for doing a project in the first place is not to enhance the way the company is perceived or anything that's fluffy like that. It's always about solving a specific problem."

He points to a Futura customer, an injection molder in Chicago, that automated the inspection of plastic parts for the automotive market. "Doing a job like that for six to eight hours a day five days a week for the rest of your career, looking at parts, deciding which ones are good, which ones are bad, that's not a very good human job," says McMorris. "That's the kind of job that causes turnover, it's not rewarding, it doesn't lead anywhere, so the company has problems retaining people who are capable of doing inspection -- or they're doing a poor job of the inspection, and the customer is rejecting shipments of products because they're defective."

Once such process-based problems are solved, customers "are going to need better internal skill sets to maintain this equipment, so we don't have to come and do it all the time," says McMorris. "It's unlikely you're going to do that on a part-time basis; it has to be a full-time task."

Automation is "a means to an end," he adds. "The tools to get where you want to go -- which is more data to improve your processes -- that's the end."

Eric Peterson is an editor with CompanyWeek. Reach him at epeterson@companyweek.com.