Published in Manufacturing
A facility of Holland-based JR Automation Technologies LLC, a global designer, builder and integrator of automation solutions. A facility of Holland-based JR Automation Technologies LLC, a global designer, builder and integrator of automation solutions. COURTESY PHOTO

West Michigan manufacturers see opportunity in automation, Industry 4.0 as labor shortage persists

BY Sunday, July 04, 2021 05:30pm

Dowagiac-based Lyons Industries Inc. has long been notorious for dirty, thankless work.

Lance Lyons, a third-generation president for the bathroom fixtures manufacturer, once passed through a Burger King drive-thru when a restaurant employee spotted his company T-shirt.

“The woman recognized my shirt and said, ‘I heard that place is really tough to work at,’” Lyons said. “Now, I feel like we’ve turned a corner.”

For most of the last decade, Lyons Industries — which produces bath tubs, whirlpool tubs, showers and other products for wholesale and retail across the United States and Canada — has steadily invested in automation. Not only did injecting this form of Industry 4.0 into its operations help make the process of building fixtures easier, but it’s also been a helpful tool to deal with a major labor crisis that has plagued manufacturing and other industries during the COVID-19 pandemic.

The still slightly understaffed Lyons Industries now uses a variety of automated solutions, including four fiberglass-spraying robots, several semi-automatic conveyor systems to move products across the facility, and an additional robot to cut holes so whirlpool tub fixtures can be outfitted with jets.

In the coming months, the company plans to introduce a large automated platform that Lyons compared to an oversized Roomba vacuum cleaner equipped with vision and radar. The solution is designed to stack and move pallets of product to spare a human from the laborious work.

“These robots are pretty cool, and now we can attract people that we couldn’t before because we have the technology, and word spreads,” Lyons said.

Labor reckoning

A labor shortage has emerged as the crisis du jour for most industries, including manufacturing, as the pandemic accelerated the trend of Baby Boomers slowly aging out of the workforce.

The U.S. manufacturing industry is on pace to have 2.1 million unfilled jobs by 2030, according to a recent study by Deloitte and the Manufacturing Institute. U.S. Department of Labor data also show that only 9 percent of U.S. workers are employed by manufacturers, a number that topped 20 percent back in the 1980s.

Lyons knew his business was on a collision course with a labor crunch, but like most executives, he didn’t anticipate a transformational event like COVID-19 would accelerate it.

“What we thought would take 10 years to happen — and I might be exaggerating here a little bit — took about 10 weeks to happen,” he said.

Lyons Industries was at a crossroads in 2012 when leadership began to realize its emerging labor difficulties. Despite having 170 employees on the payroll at the time, the company was hiring 300 people a year and seeing 200 percent turnover.

That’s when company executives turned to automation to make roles less cumbersome and more attractive to potential employees. The company started by fully integrating two of its fiberglass-spraying robots into operations in 2014, followed by two more.

The spraying robots alone required a roughly $1.5 million investment, Lyons said. He hoped for a return on that investment in three years, but the return came in half that time.

Lyons Industries continued to pursue automation investments with $1.7 million in 2019 and $3.2 million in a pandemic-dominated 2020. The company is on pace to make $4 million of automation investments this year.

Automating production allowed the company to reduce scrap and rework while also increasing quality, which sent warranty claims plummeting. Relative to the rest of the industry, Lyons Industries is now experiencing a mild labor shortage. The company currently employs 126 workers, about 10 shy of Lyons’ target. 

For manufacturers sitting on the sidelines, perhaps overwhelmed by such a daunting topic as Industry 4.0, Lyons offered a simple solution: “Look at the biggest problem — what is making it difficult to hire and what is making it difficult to keep people? Focus on one thing. We found that one thing led to another.”

Manufacturers seek solutions

As labor challenges persist, manufacturers are also facing pre-pandemic levels of demand or better.

Justine Burdette, regional director of the Michigan Manufacturing Technology Center-West (MMTC-West), is seeing growing interest in advanced technology as a solution for companies to keep pace with demand.

I would say we’ve seen an influx of people curious about automation and all different types of technology that would be tied in with Industry 4.0,” said Burdette, whose organization provides free Industry 4.0 assessments and other resources for manufacturers. “They’re not looking for just the flash and the sizzle — I think people are coming to us thoughtfully and really trying to understand what is the best way for me to solve a business pain.”

However, Burdette cautioned that while technology can cure many ills, Industry 4.0 requires more than simply throwing a robot into the mix.

“I think a lot of people look at automation or Industry 4.0 technologies and think it will be a silver bullet — like they’re going to solve this thing the next day and all their problems will go away. There needs to be a much more thoughtful process on how you either re-engage or retrain the labor that you do have,” she said.

Corey Carolla, a partner at newly established automation company JMC Industries Inc. in St. Joseph, agreed with those sentiments. He said around 85 percent of the clients he speaks with are seeking help with automation to address a labor-related pain point.

Carolla said that using automation to fix one solitary workforce-related problem is like putting a “Band-Aid on a gunshot wound,” and that it’s more effective to address problems at a systemic level.

“Automation companies like ours, we’ve all doubled our sales because there are a shitload of ‘Band-Aids’ that need to be applied, but none of us yet have truly been able to put a systematic, long-term fix in place,” Carolla said.

Optimizing humans

With labor at a premium, making the most out of the humans on a shop floor is vital. 

Michael Ramirez, partner and president of Wyoming-based Orka Automation LLC, said companies can’t afford to squander their built-in workforce on non-value-added work. That’s why Orka always begins by removing the human touch from what company officials deem “crappy” jobs, Ramirez said.

“Our take on automation is that you can’t replace workers because you need workers,” Ramirez said. “What you really should be thinking about is where are my jobs seeing the highest degree of turnover? Where am I losing the most people? Because those inherently are what we call crappy jobs. It’s work people don’t want to do.”

The Orka team recently encountered this dynamic with one of its clients, an Indiana-based Tier 1 auto supplier that was seemingly working through a labor crisis.

After Orka Executive Vice President and Partner John Amrhein walked the factory floor, he spotted humans performing a lot of non-value-added work, like picking up products and moving them from station to station.

“They’re looking at it as a labor shortage,” Amrhein said. “We’re looking and saying, ‘It’s not that you have to bring in automation to replace people, because you can’t find them. You have some bad processes, too.’”

According to Amrhein, integrating automation within a workforce immediately is fairly simple.

“Start small,” he said. “Do a process that is a quick win. Don’t wait and try to boil the whole ocean. Just get a quick win, show your employees that automation can help them — it’s not just there to replace them. It’s there to augment them.”

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