IBR Breakfast Series Panel: The adoption of AI in the manufacturing industry

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The adoption of artificial intelligence (AI) in manufacturing has revolutionized the industry by enhancing both quality and efficiency. By reducing the reliance on manual labor and introducing intelligent systems, manufacturing processes have become more streamlined, cost-effective and error-free. This transformation not only helps to improve the bottom line but also elevates the role of manufacturing employees, offering them more high-skilled positions. Overall, AI has become the cornerstone of modern manufacturing, reshaping the industry’s landscape and ensuring its competitiveness in an ever-evolving market.

That was the message at Idaho Business Review’s Breakfast Series event on Oct. 4 at The Grove Hotel, where three panelists – Brian Havey, director of sales at VersaBuilt, Chris Morgan, senior director of R&D at Bastian Solutions, and Jan Roeser, regional economist at Idaho Department of Labor – explored the impacts of AI technology in manufacturing.

The discussion was led by Kenneth C. Howell, business and finance group partner and banking group co-chair at Hawley Troxell, the event’s presenting sponsor. Here are some of the highlights:

Howell: How has technology changed your manufacturing operations?

Havey: “It has an incredible impact on the bottom line of the shop, and I’ve seen this evolve over the last 10 years. When the automation first landed on the floor, the employees were fearful of it.  ‘Automation took jobs’ … that was the initial thought. The actual outcome is 180-degrees away from that. 

There are fewer people, but the people that are there have been there for 10 years. We have robot operators now instead of operators that are doing these dangerous, potentially dangerous tasks, and these operators are moving up in the organization.”

Howell: Do you think the Idaho Department of Labor is still going to be relevant in 5 years?

Roeser: “I do believe, absolutely, that we still need humans and human intervention and we need to, we have to do quality control checks. And you see that across pretty much all industries. We have automation indexes that we look at, and they measure whether jobs would be obsolete. A lot of those were physical jobs, manufacturing, construction — some of those that we anticipate will go away with robotics. 

Our productivity is increasing, which only brings the opportunity for human ingenuity, creativity and innovation to continue in a different form. I don’t think we will ever be without some form of human intervention. But most importantly, we still need humans even though we have these fabulous tools that are at our avail.”

Howell: Could you comment on human capital given the rise of technology in the manufacturing industry?

Morgan: “During COVID, the companies that were the most successful were companies like Amazon — they were able to continue their success during that time because they didn’t require as much labor. 

[These companies] can make decisions to invest their human capital more intelligently, enabling growth and allowing AI to handle both routine and critical decision-making tasks that contribute to business forecasting — AI isn’t limited to manufacturing alone. So in terms of human capital, it allows folks to work in more intelligent ways and hopefully grow their careers as well, because you’re upskilling employees dramatically.”

Howell: What are you now going to be looking for in your employment workforce given the continued implementation of technology?

Havey: “In the world that I live in, we need technicians that are capable of going and installing this equipment, and it’s very important that the experience is positive for the customer. That requires a person that has a mix of skills — It takes a salesperson with an engineering background. We have some very specialized people that we bring in and we have to add to their skill set to make them as effective as possible.”

Morgan: “In reference to AI, it’s really difficult to find skilled AI developers. A lot of really strong AI developers are self-taught. So, it’s hard in my business to find folks who really hit the ground running — I want to see the universities to help build these folks up and make them much stronger.  You have to really bring people in that have a mix of disciplines — mechanical engineering, design, engineering and computer science.”

Howell: How does the Department of Labor view the impact of technology on employment in Idaho?

Roeser: “If you look at the numbers, [manufacturing in Idaho] continues to grow. We have a lot going for us here in Idaho with the business environment that we have, the utility rates that we offer, and also the growth of our population has been very strong for the past 10 years. 

The labor shortage is real. We literally have lower fertility rates, we’re not replacing the mass exodus to retirement. And we acknowledge that the way that we will continue on with a nice GDP is with automation and AI, across all jobs. There’s just no stopping it and it’s not that we’re losing jobs, we’re evolving jobs.”