Manufacturers in West Michigan have turned to automation in recent years to get jobs done quicker and cheaper, and their investments in the technology shows no signs of slowing down.
That’s according to company executives, engineers and robot suppliers who’ve noticed the growth of automation correlating to a shift in the manufacturing workforce, a move that’s helped companies maximize their efficiency and their investments in capital equipment.
At Zeeland-based automotive supplier Gentex Corp. (Nasdaq: GNTX), the company is using automation “to do more” and “enlarge the funnel of growth” for the company, not reduce headcount, CFO Steve Downing told analysts last month during a conference call to discuss the company’s third quarter results.
“If you can automate and become cost effective and globally competitive out of the North American operational footprint, then the advantage of that and what it offers for us is the ability to have people move from very manual production efforts to more computer maintenance, to line management, to kind of higher-end skill sets and job performance,” he said. “How you equate that and how you make those numbers work is obviously driven by our growth of the business.”
Gentex is far from alone in considering investments in automation as a way to take hold of its future and prepare for growth, especially in a market nearing full employment in which employers are plagued by talent constraints.
“Every manufacturer has a robot,” said Bill Veldboom, general manager of Norton Shores-based Seabrook Plastics Inc. “We have continued to invest in robots, and that’s partially because of the tight labor market, and this can help us reduce our cost.”
At its plant, Seabrook has deployed a robot for each work center. The company specializes in plastic-injection molding for Department of Defense gas mask contracts and Class-A special molds for automotive companies.
As robots become an increasingly important part of its production philosophy, Seabrook has expanded its building size by 25 percent and is now using larger presses with capabilities greater than 1,300 tons.
“The additional equipment we are just bringing in will each have a robot,” Veldboom said of the new 700- and 1,300-ton presses.
For Seabrook, automation not only has helped reduce costs, but it has also improved the company’s quality. Seabrook has gone 16 straight months with a defective rate of zero parts per million, Veldboom said. More importantly, the company expects that automation will contribute to growth across the board, including for headcount.
“As we expand into larger equipment (molds), I know that our number of full-time employees will grow,” he said. “Given the labor market, there is always that question of can we do some things that are not necessarily value-added, but can we do it easier or better with the technology.
“It doesn’t mean our objective is to replace people, but I think it’s going to be a complement.”
Additionally, the company hopes to leverage technology for the safety of its workers, using automation to do tasks that might otherwise endanger employees, such as reaching in a mold to manually extract a part, or for repetitive motions that could cause worker strain, Veldboom said.
“We also use camera systems for visual inspection for functional attributes such as fill, dimension, etc. That liberates our operators to document process controls, take periodic measurements and perform inspections that do not lend themselves to automation,” he said. “Of course, that changes the skill set of what we need from operators since they are performing higher-order tasks.”
Beth Roberts, electrical engineer at Grand Haven-based Automatic Spring Products Corp., told MiBiz via email that the implementation of automation in the workplace has made the company’s work environment “engaging and safer” and a place “where people want to work.”
Currently, Automatic Spring Products has five robots and roughly 375 employees. Automation has taken the “mundane, repetitive and risky” jobs and transformed them into opportunities for employees, Roberts said.
The company views automation as more than a robot picking up parts and then packing it in a box, she added.
“(Automation) includes collecting and storing data automatically in order to focus energies toward the correct process for continuous improvement goals,” Roberts said. “We must be able to compete on the global market in order to grow as a company and provide opportunities for our employees. Analysis of the ‘collected process data’ helps to effectively determine the ‘problem’ in order to improve our processes and remain competitive on that global market.”
A MOVE TOWARD COBOTS
Across North America, manufacturers ordered a record number of robots (9,773) costing roughly $516 million during the first quarter of 2017, according to a report from the Ann Arbor-based Robotics Industries Association. Orders were up 32 percent from the first quarter of 2016.
As the market for automation equipment grows, the mix of technology is also shifting toward more advanced systems, including collaborative robots, or cobots, said Mark Ermatinger, vice president of sales at Industrial Control Service Inc.
In the past, robots were sequestered behind barriers to protect workers’ safety. But with the rise of cobots, those fences have come down as humans and robots can safely work together on the line. The cobots, which feature built-in safety cutoffs, can be programmed simply by using a smartphone or tablet to record the movement of the operator, Ermatinger said.
Industrial Control, a Zeeland-based consultant and distributor of automation equipment, showcased cobots made by Fremont, Calif.-based Precise Automation Inc. during a recent client workshop.
Ermatinger envisions the product being used as factory line chasers, grabbing miscellaneous parts and delivering it down the line. The cobots, which can cost from $20,000 to $30,000, can memorize multiple moves and have a life expectancy of seven to 10 years before needing maintenance, he said.
The so-called next wave in automation has been available for about three years, but customers have only started asking for it in the last 12 months or so, he added.
“The technology is so new so it’s interesting how it may change the whole landscape of manufacturing,” he said. “People say, ‘Is this going to take my job?’ Well, the answer is you’re more valuable in a different part of the plant … (and) you may be able to do a lot better job for a lot better pay.”
According to ABI Research, global sales of cobots are expected to reach 40,000 in 2020, quadrupling the market of cobots today.
“Employers just can’t find people, so they have to do something,” he added. “The other aspect is the employer has to be profitable. If products are going to Mexico and China and you’re making a product that is too expensive, you are going to go out of business and your plants are going to shut down. … A lot of people say, ‘You’re taking my job.’ No. I am saving that company; I am saving that community.”
AUTOMATION ISN’T FOR EVERYONE
While automation can help companies focus their workers on more value-added processes, some manufacturers that have embraced the technology in the past are making the switch back to human workers on their shop floors.
That’s the case at Wyoming-based Rapid-Line Inc., which two years ago invested more than $2 million in new equipment and automation meant to alleviate talent concerns. Now the company’s strategy has shifted to focus more on people, particularly after Rapid-Line’s former owner sold the business to its workers via an Employee Stock Ownership Plan (ESOP).
President Rick Van Dis told MiBiz his “thinking is different” than the previous owner when it comes to automation.
“It depends on the nature of the work. If you are in a high-paced environment, high-volume manufacturer, it makes sense,” he said. “For low volume, it doesn’t make sense to have robots, so humans make more sense.”
For Rapid-Line, the move back to human workers comes as a reaction to customers’ demands for shorter runs of customized products, he added.
“(Consumers) want unique things, and a robot won’t be set up to make a custom product. There are interface points to improve processes, but people are always going to have to get up and go to work,” he said.
Throughout the 20th century, the percentage of workers involved in U.S. manufacturing has declined from 32 percent to 8.7 percent in 2015, when 12 million people worked in the sector, according to the Bureau of Labor Statistics.
However, manufacturing still accounts for 21.3 percent of working people in West Michigan, almost 2.5 times the national average. Since 2009, manufacturers in the region have added 37,853 jobs, an increase of more than 33 percent, according to data from Talent 2025 Inc.
Despite the rise of automation, manufacturers say humans — and their creativity — remain essential for the industry.
“There are a lot of automation companies in the area, and that is driven by the availability of skilled labor and reserving skilled human beings for more complex activities that can’t be done well with machines,” Veldboom said. “I think our content of technology is going to increase as it has because we have been willing to grow without necessarily adding people.”