Q: Which is better, cheap labor or automation?

A: The Manufacturer’s Dilema...Automation or Cheap Labor

Manufacturers the world over are being squeezed by the demands of the global market. Ever ex- panding trade zones flood the labor market, which lures agile manufacturers to where the ‘grass is greener’ (and labor is cheaper). But, is it still possible to be ‘penny wise and pound foolish’?

Case in point, a US manufacturer of window furnishings and treatments. Not wanting to be the last kid on the block, a major manufacturing facility is established in Mexico. After only a short time in operation, several serious oversights become painfully clear.

The workforce is terribly unskilled, or more accurately, terribly unfamiliar. Through no fault of their own, the typical prospective employee may never have set foot in a manufacturing facility, let alone operate industrial machinery. An engineer told me of instances where two-piece dies were set up on a press separately and not properly aligned causing costly damage to dies and debilitating down time.

Another problem was keeping trained employees on the job. The same engineer said, “the turnover rate was atrocious”! Employees would receive a paycheck and not be seen again. There are stories about lines of people waiting days or longer until a position in a factory needed filling. The rotation continued day in and day out. How productive is a workforce when each day, every day is a training session?

This is not to say that there are no success stories or that there will be a mass exodus back to skilled labour markets, but this company learned valuable lessons. They are currently in the process of automating as many of the manufacturing and packaging processes as are feasible. Experiences has proven that making manufacturing more efficient, while keeping the skilled employees who know the process, just makes good sense.

For example, their in house automation unit, along with actiOn feed systems, is nearing completion on a curtain rod machine, that will produce 48-60 assemblies per minute. One operator monitors the machine, keeping the 9 feeder bowls filled and loading the spools of raw strip material. That strip stock is cut, roll formed and conveyed to where the finials (decorative end covers) are placed on each of the rod ends and crimped automatically. A chain drive feeds the finished product into bulk storage for future packaging as orders are placed.

This has been successful and there are future projects on the drawing board. This would definitely not be the case had cheap labour costs been the panacea many optimistically assumed that it would be.

To automate or make the transition to a friendlier labor market? No doubt the debate will rage on into the future and as the workforce becomes more familiar and skilled in the industrial environment, the point may be moot. But manufacturers be warned, the grass is not always greener on the other side of the fence.