Idaho Manufacturing Alliance hosts trade show and conference for companies to ‘reinvent and reimagine’ going into 2023

Manufacturers need to know that “We are entering a new era of demographic decline, lower trade levels, labor shortages and higher cost structures.”

Why?

Because “We are transitioning out of an economic era where abundant global labor and trade created an extremely lost-cost environment.”

Those are the words of Idaho Department of Labor Economist Sam Wolkenhauer, who shared those insights at the Dec. 1 second annual Idaho Manufacturing Alliance (IMA) trade show and conference, held at Boise Centre.

So, what can stakeholders in and around manufacturing do?

Some answers to that question were provided at the conference as well, which offered several panel discussions around current challenges and solutions (not necessarily unique to manufacturing) to hiring and retaining talent, adopting new technologies to improve work efficiency, and more.

‘Restructuring Culture & Benefits for Competitive Hiring’

Addressing audience attendees looking to build culture in their companies, moderator Alex Stanton, CEO of ExBabylon IT Solutions, started off the panel discussion by saying, “You have to acknowledge the culture you already have,” good or bad, or some of both. He then asked the three panelists — Katie Kory, human resources director with ACT Manufacturing/Lakeside; Ron Ray, human resources director with Bestbath and Steve Watts, president of Image National Signs — to speak to working at a company where “the culture wasn’t what leadership wanted it to be.”

Culture starts with the top, according to Ray.

“Things like being overly frugal, unwilling to invest in people…these are systemic problems,” he explained, and not addressing those is “kind of like swimming against the current when you’re trying to make a better culture.”

Similarly, Kory stated, “All executive teams should be very mindful of their management teams,” and, “If you don’t train your managers, you’re going to have problems…and a one-time training session is not enough. There must be ongoing training…”

Watts added, “You have to meet employees where they are, and help them be part of the solution to move you forward.” If you don’t do that, “you don’t get the same level of buy in.”

For instance, when it comes to employees desiring to be paid more, Watts said, “I want to pay as much as I can. We need to deliver value and create that opportunity” together.“When you set targets for them and say, ‘Here’s what we need to accomplish if you want to earn more, how do you think we can make this happen?’ (the employees) start to come up with answers pretty quickly,” he added.

When it comes to performance and retention, some manufacturers have moved and others are considering moving away from directly tying compensation increases to merit discussed in regular reviews. Ray said Bestbath is one of those companies that has moved away from that and has opted for more of a dialogue approach to regular reviews with the employee.

“It’s a dialogue that sets the stage (for) the improvement plans for that employee for the next year,” he said, adding, “and less about a report card.”

Watts said Image National Signs currently uses a one-to-five scale that is timed with merit increases, and the company is considering if that still makes sense to do.

“If we think about the people on the other side of the table, what they really want to hear is ‘what’s my score and what’s my increase going to be,’ and everything you say while you’re having a conversation, they don’t hear a lot of it,” Watts said.

One thing the company has done recently, he added, was develop a skill and wage matrix that employees could look to if they want to grow their career path and increase their pay.

Kory underscored the importance of wage transparency, explaining that employees know how much they make compared with other employees in the company, and at other companies.

“It is really important to do your benchmarking and wage audits pretty regularly, because if you’re not, (the employees) are,” she added.

Kory also said that an employer doesn’t have to necessarily pay the most to retain employees; the wages have to be fair. Ray gave the example that the company he works for shares a total compensation figure with employees, explaining what each benefit is worth to them and translating that into an hourly figure (benefits on top of base pay).

Panelists discuss emerging technologies in manufacturing

Panelists underscored the importance of being open to incorporating technologies and maintaining a culture open to such changes; they also acknowledged one challenge to that openness is the fear some employees have of losing their jobs.

When asked by an audience member what has been instrumental in improving the operation, that excites the operator and then allows for more change to happen, panelist Kevin Summers, senior automation sales specialist with Miller Electric, posed the question, “Why do your operators leave?”

“They leave either because they’re tired of having their head in the (fumes) all day or they’re being overworked,” he explained, adding that it can be beneficial to introduce technologies that improve the operator’s productivity — I.e., maybe now they don’t have to put in overtime — and ultimately make their life, and yours, easier. Scott Weaver, NorTECH automation and product specialist with Norco, added that sometimes incorporating technologies that contribute to a worker’s physical comfort could lead to their happiness and retention and as an employee. Graham Francis, district manager with Haas Factory Outlet, brought up an instance where he saw employees’ jobs become more entertaining as a result of implementing new technology.

Jimmy Garcia-Meza, CEO of CloudPlugs, acknowledged that in some cases machines will replace the worker, giving the example of cars replacing horses.

“The only path is to move forward and then help that person (losing their job to a machine) progress in their education and learning of the adoption of new technologies,” he explained, “so we can drive effectiveness and optimization across the enterprise.”
He also said, “Most of the time, we’re trying to improve their (the worker’s) life.”

To some degree, a company may not be able to afford not adapting. Garcia-Meza pointed out that there are a lot of up-and-coming people and innovations that could put a competitor out of business, and Weaver acknowledged the at times scarce workforce and other resources that technologies could address. Summers backed that up, and, regarding the fear of job loss, he pointed out that not everything can be automated.

So, after being open to incorporating new technologies, moderator Steven Shaffer, senior risk improvement innovation specialist with EMC Insurance, asked how companies can implement those technologies.

Summers advised looking at processes and what might be costing a company time; when considering automating a process, don’t automate a broken process. He added that sometimes consulting someone trusted for help can be beneficial, and he advised taking baby steps.

Garcia-Meza advised aligning elements and processes inside the organization behind the objective of “how am I going to make my customers’ lives better?”

Francis underscored the importance of having data, where trends and other helpful information could be seen. Such data will help prepare for automation, and he advised that automation doesn’t handle variation well.

Regarding data, Garcia-Meza advised consolidating siloed data, and having the ultimate goal of building a machine learning model if possible.

What is happening economically, and why?

“The economy that we got used to in the 90s and the 2000s is essentially passing away, and it’s being replaced with a new global economic model of lower levels of globalization, lower levels of trade, higher prices and shortages of labor,” Wolkenhauer said. “Fundamentally, our economic reality going forward is going to be very different than what we’ve come accustomed to…normal has changed.”

Wolkenhauer’s key points included:

1. The global economy is buckling under demographic transition (such as decreased birth rates in many countries) and geopolitical strain. “Our modern life is made possible by a very interconnected system of global shipping,” Wolkenhauer explained, regarding recent inflation. “In 2020…we basically slammed the e-brake…and we’re in the process of unwinding (the connections).”

2. America is doing a little better — such as with local energy, manufacturing growth and dollar strength. However, the country is “not immune to demographic decline, and we are part of the globalized economy,” as Wolkenhauer put it.

3. A recipe for high prices is labor shortages and financial tightening at the same time of trying to build out industrial capacity. Similarly to the global supply chain mentioned above, Wolkenhauer explained that labor availability is shrinking, both with decreased birth rates and aging populations globally.

“For the last 50 years or so, there really was unlimited labor,” he said. “And so, there was no sense that the world was running out of productive people, that there were limits to the global labor force. That is over.”

“And,” he added, “we’re reaching a point where labor and the availability of working-age people is going to become one of the most important constraints on economic activity.”

When it comes to manufacturing specifically, Wolkenhauer said, “What you are going to see is a lot of manufacturing coming back to America.”