Economic development organization Lakeshore Advantage Corp. launched an Industry 4.0 readiness poll last year to get an idea of how small and mid-size manufacturers viewed and used advanced technology within their operations.
Preliminary data from the ongoing survey show that 60 percent of the 88 local manufacturers that responded considered themselves either prepared or somewhat prepared to adopt Industry 4.0 technology.
The poll also looked at the most common barriers that are keeping manufacturers on the sidelines. Given the ongoing workforce shortage that has gripped the industry, it might come as little surprise that the No. 1 barrier cited in the study was the lack of expertise on staff to sustain such technology.
“That’s interesting because that’s where we can bring in our partners … and they can really address that through training,” said Amanda Murray, vice president of business solutions for Lakeshore Advantage, which services manufacturers in both Ottawa and Allegan counties.
“So, that’s where we’re working in tandem with our partners to say that companies are already implementing, or looking at implementing, but they can’t take full advantage of these technologies because they don’t have the skilled labor on staff or they can’t upskill their labor,” Murray added.
Lakeshore Advantage’s readiness poll is a precursor to a larger Industry 4.0 initiative made possible through a $92,787 grant from the Michigan Economic Development Corp. last year. The early data are already shining a light on how important the talent side of the equation is when implementing Industry 4.0.
This isn’t particularly great news for an industry that is grinding forward amid historically low workforce participation. Manufacturers in general are having enough trouble getting bodies into their production facilities, let alone finding time and resources to upskill team members to address the higher-skill needs of Industry 4.0 technology.
Still, the industry has access to a growing arsenal of resources in the form of various state programs that are focused on growing the talent pool and equipping both new and existing workers with the higher level of skills they need to exceed in the new tech-heavy manufacturing sector.
“There is a lot of training funding out there,” Murray said. “Sometimes, the challenge is companies need help navigating them. They can call organizations like Lakeshore Advantage, or West Michigan Works!. … We can sit down with the company and say, ‘What are your needs?’ Because some of the training funds are stackable, too.”
Training funds in high demand
The Going PRO Talent Fund is one state program that manufacturers have leveraged to equip workers with the skills they need in the Industry 4.0 landscape. The program, which received $40 million in the current state budget, awards grants to manufacturers and other employers throughout the state that they can use for workforce training initiatives, including training new hires and upskilling existing employees.
Last year, the state handed out $39.5 million to 1,021 employers as part of Going PRO.
“There is definitely a focus on upskilling existing workers,” said Amy Lebednick, business solutions director for West Michigan Works!. “That’s really why grants that support training funds are so important right now. (Manufacturers) have the opportunity to customize the training they need in order to not increase but simply maintain business capacity.”
Area economic and workforce development organizations have been beating the drum for Going PRO over the years, and Lebednick said West Michigan has traditionally taken a generous slice of the funds.
“Across all our industries, manufacturers take home the largest amount of those grant dollars in West Michigan and across the state,” she said. “In West Michigan, specifically, we get 25 to 30 percent of the statewide funds. It’s definitely being utilized a lot in West Michigan.”
State programs that make education and certification programs accessible via local community colleges are another key component to developing employees capable of tackling the demands of Industry 4.0. These included Michigan Reconnect and Futures For Frontliners, which make a wide range of training opportunities free for people of certain demographics.
While most economic developers agree that these efforts are moving the needle in bringing higher-skilled employees to the workforce, the problem is multi-layered — and such an extreme exodus from the workforce has made it an uphill battle.
“We are seeing that the whole talent situation has created a problem and that companies don’t necessarily have the funds to upskill or even the employees to do it,” said Terry Hossink, regional director of Michigan Manufacturing Technology Center-West. “If you take someone off the line to upskill them, you don’t necessarily have someone to replace them. It is a real thing and it is causing them to wait (to adopt Industry 4.0 technology).”
Eric Erwin, CEO at Ludington-based foam craft products manufacturer FloraCraft Corp., has found some success in the tight rope act of implementing Industry 4.0 technology while also dealing with a much smaller workforce than in years past.
Two years ago, FloraCraft employed around 200 full-time employees and would tack on 120 temporary employees to meet seasonal demand. Now, the company employs 245 permanent employees and requires fewer temporary workers because of its automation efforts.
“Our ability to continue to grow requires us to utilize the same number of workers but to increase our output and our productivity,” Erwin said. “Automation in the last 20-some months has been our largest CapEx investment. We greatly automated our entire process.”
FloraCraft saw a rise in demand from one of its large clients, a key player in the discount dollar channel with 14,000 retail stores nationwide. To keep up, the company installed two automated packaging lines with the same output as four lines in its legacy system. Output spiked from 400,000 units in a month to 1.2 million, all while using six fewer people.
FloraCraft’s 4-inch extruded polystyrene balls are another in-demand item. The company is working with Wyoming-based Orka Automation LLC on an automated cutting machine that would also increase output for that product.
The digital transformation brought additional training.
“We’re hiring people for programming, automation, robotic work … sending a lot of employees to get certifications,” Erwin said. “That adds value to them and adds value to us and keeps people focused and connected, which is very critical.”