13, June 2018
Addressing the Workforce Shortage
Although the workforce shortage ranks quite high nationally, it is, I believe, the number one issue constraining the growth of North Dakota businesses, especially in the manufacturing arena, based on on-going interviews within that segment of our economy. We hear all of the speculations and assumed root causes, such as, it is difficult to attract talent because of our winters, etc. Whatever the reason, no one has come up with the secret sauce that will fill the thousands of job openings that exist right now. Perhaps a novel approach to at least partially, and probably significantly, resolve this issue is to take a hard look at the jobs listings themselves.
Let’s illustrate this concept with an example straight from the on-going integration of technology into the manufacturing processes. Let’s say a manufacturer has struggled to attract welders (sound familiar?) and has decided to purchase welding robots to achieve the additional capacity needed to fulfill delivery commitments. Obviously, integration involves a lot of planning, which eventually involves programming and maintenance, both requiring skilled labor—it just does. So, from the Accounting department’s view of the situation, the process for acquiring the robots includes meeting specific return-on-investment (ROI) criteria, i.e., comparing initial and on-going costs to the projected benefits, aka, increased output, cash flow, revenue, etc. Ideally, they’d like to have the robots run around the clock to maximize the machine utilization metric. And what are the robots doing during that time? Obviously, putting down as many quality weld beads as mechanically possible in the time allotted.
Now, what if the robots came with job descriptions, just like their human counterparts. Let’s take a look at an example of a typical job description for a human welder first:
We are looking for a skilled Welder to join metals and other materials at our facilities. You will operate appropriate equipment to put together mechanical structures or parts with a great deal of precision. Your job is important as it provides the foundation for strong infrastructure.
Our welders must be competent in using potentially dangerous equipment following all safety precautions. The ideal candidate will also have a steady hand and great attention to detail.
- Proven experience as welder
- Experience using a variety of welding equipment and procedures (TIG, MMA etc.)
- Ability to read and interpret technical documents and drawings
- Knowledge of relative safety standards and willingness to use protective clothing (face-shield, gloves, etc.)
- Deftness and attention to detail
- Proficient in English
- Successful completion of a relevant apprenticeship program is required
- Professional Certification (e.g. an AWS welding certificate) will be a plus
The robot’s job description would probably look like this:
We are looking for a reliable robot (97% to 99%) to join metals and other materials at our facilities. Your job is important as it provides the foundation for strong infrastructure.
- The ideal candidate will be accompanied by a user manual.
- Weld stuff
This is not intended to make a case for replacing your human workforce with robots. The key point here is that you invested in the robot for one function only, the value-added task of putting down a weld bead. By the same token you hire a welder for his or her skill at putting down a quality weld bead, and you pay them accordingly, especially if you want to attract and retain them. But if we were to break down a typical welder’s job into its primary elements, as shown here from an actual observation--a more appropriate job description would be for a material handler that does a little welding on the side:
Task: Weld Assembly for Item XYZ
As you can see, the elements that you pay them for make up roughly 5% of the job. The bottom line is that you need less welders than you think and more welding. If the overall effectiveness of a robot was 5% would you purchase up to 20 more robots, depending upon demand, or would you investigate and address the reasons for the downtime?
It is probably not reasonable to expect a human to perform value-added tasks eight to 10 hours per day but you can certainly see that there are opportunities to significantly reduce the downtime percentage and therefore reduce the number of planned new hires of skilled labor. This particular strategy may involve hiring material handlers to “feed” the value adders. Yes, you are still adding people but you are not paying them a skilled labor salary and one material handler can service multiple value-adders. As an added incentive, you can quickly increase uptime and output by a significant percentage and thereby increasing cash-flow, revenues and the ROI. From the real-life example above it would not be unreasonable to experience triple or quadruple-plus throughput increases. Utilization, human or machine, is only meaningful as a metric if it is aligned with demand, but we’re assuming the demand is there because, after all, you were planning on hiring additional welders.
For further reference, here is a national-average comparison of material handler compensation versus a skilled welder:
One can, and should, apply this logic and thought process to any job listing, for any job title. The idea is to optimize the value-added components of any job—those aspects that you, and your customers are paying for. Ultimately, you can pare back those job listings for which there are few, if any, people to fill them.
Fill Them with Technology
You are no doubt aware of the Industrial Internet of the Things (IIoT) and Industry 4.0 (coined first as "Industrie 4.0" in Germany) since they have been dominating the content of manufacturing-related publications. As we move deeper into the digital age there are opportunities to utilize technology to accomplish tasks for which there are either few people, or are tasks that few people really want to do. One example is the emergence of the collaborative robot, or cobot, which is designed to work next to, or among their human counterparts. The heavy lifting will still be accomplished by industrial robots, but the cobots can efficiently perform the repetitive, mundane tasks, such as pick-and-place, and do not require complex programming and associated technical staff to make them run and keep them running. Most are bench-top mounted, one or two arm machines that perform their tasks with a high degree of precision and reliability, and at reasonable prices. They can be outfitted with vision systems and a variety of sensors and features.
Technology is advancing at an amazing rate, actually much faster than a manufacturer can typically integrate into their production processes. But depending on the business case now and in the future, there are technological solutions that can increase performance and productivity right now if implemented and integrated intelligently and strategically, which includes eliminating waste and optimizing the value-added activities in advance of automation. This will save your company a lot of money in technology investments. After all, why automate a task that should probably not be done at all. But that is the topic for my next blog.