Labor and Automation

How automation and technology make people less necessary, more important
Bethany Stough, Window & Door
June 14, 2019
FEATURE ARTICLE : Workforce Development | Management

The fenestration industry is waking up to technology advancements and automation. While some companies have invested in more automated factories for years, industry suppliers and economic forecasters have seen a shift in the past two to three years where this type of investment is growing into a mainstream industry trend. The robots and automated machinery widely on display and sold at industry trade shows is one indication of this growing trend. 

Not a Simple Switch

Technology may be enticing and a solution to some labor woes. However, industry companies are faced with many challenges when considering technology investment. “The majority of the jobs on the factory floor are cost prohibitive to automate, most due to [their] non-repetitive nature,” Morgan Donohue, vice president of Erdman Automation, says. “The product variations and multiplicity of the work needing to be performed require a significant amount of flexibility. This coupled with tight wage scales and often relatively low volume, the return on investment [of automation] is not often there.” 

Additionally, in order for the industry to fully realize the potential of automation, everyone has to be all in. Company leadership and industry advocates must collaborate and support technology adoption. “We have to collaborate more as an industry to get closer to full automation. Even with design we get picky,” says Tony Mehringer, vice president of sales and marketing, Sturtz Machinery Inc. “There’s so much customization in windows, it's hard to automate. It’s hard to standardize products. But at the end of the day, there's not much homeowner benefit if you can't simply get windows built in the most cost-efficient way.”

Note: This part of the automation/personnel equation sparked a lot of conversation, more than we could include here. Read the rest of the story. 

Another is the investment increase across the manufacturing sector at large. In 2016, MAPI Foundation published a research series on manufacturing productivity performance, including survey data from U.S. manufacturers—spanning across company size and industries—on automation investment. From 2011 to 2016, 83 percent of surveyed manufacturers engaged in automation investment. In 2016, an additional 76 percent of surveyed manufacturers planned to engage in automation investment. (See Fig. 1.)

At the same time, for manufacturers, business is up while labor is scarce. “Younger workers maintain a negative perception regarding manufacturing, and retail jobs exist that pay similar or better wages with less manual labor,” says Matt Batcha, business development for windows and doors, FeneTech, commenting on reasons why this industry is challenged with finding enough workers. 

As a result, Tony Mehringer, vice president of sales and marketing, Sturtz Machinery Inc., says that the past two years especially have seen all sizes of companies investing in equipment instead of people. “Glass production, PVC, IG fabricators, manufacturers—they’re all seeing the same thing: labor continues to thin out and there’s not a lot of backfill,” he says. “Time is a problem for companies to recruit, and not knowing what to try to be effective. You have to keep reinventing yourself, considering new things.”

Is automation the necessary reinvention? 

Updating technology and investing in automated machinery requires an adjusted type of workforce, sources say. Could this type of investment also serve as a reinvention for industry companies to attract workers and keep them engaged? There’s no simple answer, and plenty of differing perspectives. But, as the fenestration industry seeks to remain competitive and growing in a changing global marketplace, the discussion of technology and its impact on people is necessary. 

“The fenestration industry is trying to solve its labor issues by getting more laborers in a market with no workers; trying to hire people that don’t exist,” says Mitch Lewandowski, vice president of sales for Softtech. “Technology is a solution for labor challenges. It automates tasks and keeps younger workers engaged.”

Lewandowski says trying harder to attract workers the same way the industry always has simply is not working because, “we’re capturing a disappearing market.” 

According to Mary Meeker's 2018 Internet Trends Report, the average adult spends 5.9 hours per day with digital media, up from 3 hours a day in 2009. Technology-based interactivity is what people—young and old—are accustomed to in “the spaces where they live and play,” says Lewandowski. “When the workplace doesn't align with how they work and play, they disconnect; it’s not relatable,” he says.

Sources encourage workplace investments, including new technology to streamline processes and reduce manual labor. “Most young people want to go into technology-based environments. Mechanically inclined people even want to use tech to solve manual problems,” says Lewandowski. “When you contrast the average window and door manufacturer with other manufacturing jobs available using modern workplace practices, this industry is not [immediately] attractive to younger people.”

Fig. 1—Percentage of Manufacturers that Engaged or Plan to Engage in Automation Investment
Source: MAPI Foundation

The other side of ROI

While it is unclear whether automation could be a solution to attracting workers to the industry, sources agree that automation does have a clear impact on the labor challenge. 

“We, too, feel the unemployment crunch; fewer and fewer young adults are going into technical labor jobs,” says Morgan Donohue, vice president of Erdman Automation. “We have begun a rigorous on-the-job training program to teach the skills to young adults who are willing. But for us to make our next 50 percent increase … we will be adding less than 70 jobs. Still significant, but some of our customers would be adding hundreds if not thousands. Automation makes you less reliant on the labor market. Increased efficiencies decrease the need for more labor.”  

Lewandowski sees antiquated technology as a big reason industry companies still rely so heavily on people and manual processes. “Factories are set up using old systems that weren't designed to run today’s business,” he says. “This is a big challenge to solving problems and growing. There is equipment out there to grow your business without more people. People don’t always know what’s available to them,” he says. 

Sources also note that automated machinery, while an investment, does not have the same requirements as people do. Of note, machines don’t mind doing boring and repetitive tasks, and it doesn’t require benefits, paid time off, breaks, vacations, insurance premiums or other costs associated with hiring individuals. Sources say these are the soft costs companies should consider when weighing the return on investment of an automated factory. 

Figure 2 (below) shows the top five motivators for the 83 percent of respondents who engaged in automation investment in the five-year period prior to the MAPI Foundation survey. 

“For window and door manufacturers, there’s a huge cost [associated with] turnover. More automated equipment can alleviate those costs,” says Mehringer. “Due to the current environment, [companies] are being forced into it. There just aren’t as many options now to grow.” 

“By using old machinery, training costs for younger people unaccustomed to them can be high,” says Lewandowski. “And turnover can be high with more manual processes. There's a lot of cost getting new workers trained and assimilated to antiquated systems when advanced workstations can do a lot of the work, and are also more attractive to them.”

In automation discussion, people are key

A frequent question in the automation discussion is, if machinery and job tasks are automated, where do the people go? The McKinsey report addressed this concern saying, “History would suggest that such fears may be unfounded: over time, labor markets adjust to changes in demand for workers from technological disruptions.”

Donohue says, “In 20 years in the industry, I’ve never seen a company fire people because they got a new machine. They move them to other areas, and I don’t see that changing.” 

Industry sources also note the personnel benefits of freeing workers from certain tasks to do others. Lewandowski says, “Automated machinery … gives opportunities to do other things. Moving people into different roles is an opportunity to grow them. It allows companies to ask: how can I use [my people] more effectively?”

Figure 3 (below) presents the top six reasons surveyed manufacturers gave for not investing in automation in the five years ahead of the MAPI Foundation survey. 

Whether or not new technology and a more technologically advanced workplace could attract younger workers or keep them engaged, any renewed focus on how to make the workplace people-centric is a boon to the industry. As automated as manufacturing can become, people should always be the focus, sources say. Even though fewer human workers may be required as automation gains more ground, the skills and analytical abilities of humans will be even more important.

“Change your mindset to what makes sense to today’s workforce,” says Lewandowski. “We don't make windows, we use technology to solve problems people have in daily life. We use technology to give customers a better experience.” 

Related reading | Labor and Automation: Not a simple switch