George N. Saliba 2016-02-22 12:50:25
Numerous variables surround the degree to which high-tech equipment is implemented. Paterson-based Accurate Box Company’s President and CEO Lisa Hirsh has witnessed manufacturing technology evolve from older equipment that once yielded 1,000 box sheets per hour, to today’s equipment which now outputs between 10,000 to 12,000 box sheets per hour (Accurate Box manufactures litho-laminated packaging). Moreover, while in years past it once took as long as eight hours for Hirsh’s employees to prepare equipment, today’s setup time can be as brief as 35 minutes. Hirsh explains, “If a [manufacturer] has kept up with technology and invested in newer machinery, then it is a world of difference compared to what was available even 10 or 15 years ago.” Industry wide, today’s advanced manufacturing technology may be highly automated, replete with robots and laser precision, and yield higher-quality products and also efficiencies for owners/operators. Additionally, cutting-edge “lean manufacturing” techniques strive to reduce waste and, by extension, manufacturing costs. At one end of the manufacturing technology spectrum are entities such as Phillips 66 Bayway Refinery, Linden, a 24-hour-a-day operation which produces enough gasoline in 10 seconds to fuel an average family car for one year. Sophisticated refinery technology monitors gasoline and/or diesel production on a real-time basis, and separate equipment can help optimize the entire refinery. Phillips 66 Bayway Refinery Manager Darren Cunningham tells New Jersey Business that industry wide, while production volume is enormous, profit margins may be more modest. Cunningham explains, “The advanced control systems [examine] about 100 variables on a minute-by-minute basis, and also how those variables interact. They optimize the [refinery] units. We will say, for example, ‘The price of gasoline is higher than the price of diesel, so we want to maximize how much gasoline we make.’ Then, all those variables are automatically manipulated to ensure we are doing that. [The advanced control systems] also look at other things, such as how much energy are we consuming. In refineries, one of the biggest costs we have is energy, so we always to try to minimize how much we use.” All this is a far cry from the refineries of yesteryear, of which Cunningham remembers, “When I first started in this business 30 years ago, one of the jobs I had was to run a refinery optimizing program, and, basically, you put the inputs in – which took you a day – and then you had to run it overnight on a mainframe computer, and hope that you didn’t [accidentally] put a ‘1’ or a ‘0’ in the wrong column. Then, you would get your results the following day. Now, we can do that [immediately]. The computing power available now just wasn’t there, all those years ago.” Manufacturing Technology Investments Overall, while impressive manufacturing technology exists, some New Jersey manufacturers don’t necessarily possess it. Referring to the manufacturing industry as a whole, Accurate Box’s Hirsh says, “The problem that many manufacturers have is that they don’t reinvest, and they have antiquated equipment, which runs less efficiently and more slowly than newer equipment.” Alan Haveson, who recently stepped down as president of the New Jersey Technology & Manufacturing Association (NJTMA), says, “There are many companies that would like to take advantage of [manufacturing] technology, but affording the equipment and knowing which pieces of equipment to buy are challenges. Then, where do you find the guy who can operate it?” At Jackson-based UNEX Manufacturing, Inc., vice president of operations Howard McIlvaine, opines, “Yes, we constantly upgrade certain equipment with new equipment. However, we also upgrade with used equipment that might be 10 or 20 years old, because it’s more affordable. Can we afford a half-million-dollar new piece of equipment? Yes. We can buy one, but then we are not going to do anything else for the next two years. So, I am often shopping for equipment that might be from the 1990s; somebody else is upgrading to the latest half-million-dollar piece of equipment, and we’re buying their $50,000 used piece.” John W. Kennedy, PhD, CEO of the New Jersey Manufacturing Extension Program, Inc. (NJMEP), says, “I always use the word ‘evolution,’ because in a lot of facilities, they don’t just add machines, wipe out everything they have done in the past and have a completely automated system ... Most clients are not completely automated in any way, shape or form [because] most manufacturing companies (more than 75 percent in New Jersey, and in the United States) are small companies, which means 30 or fewer employees.” Again, affording equipment can be an issue. Kennedy adds, “While new equipment can reduce the need for certain types of workers, it increases the need for other types of workers. ... Who maintains the machines? They are high-level people, and the more machines you have, the more people you need maintaining and servicing them.” Manufacturing Employees The National Association of Manufacturers (NAM) reports that over the next decade, approximately two million manufacturing positions throughout the United States will go unfilled. For many companies, locating employees with the requisite technical skills and/or “employability” skills (e.g., arriving at work on time, and being industrious), is a huge issue. American society has largely eschewed preparing high school students to work in manufacturing and instead often promotes college-preparatory educations. Many people still remember the “dirty” manufacturing floors of yesteryear, and, therefore, students and/or their parents often hold dim views of manufacturing careers. However, workers today are typically not subjected to particularly harsh environments, at companies where new technology has been purchased. There is also a widespread and false belief that manufacturing is “dead” in the United States, while, in fact, NAM reports that if US manufacturing were a sovereign nation, it would be the ninth largest economy in the world. While it is true that much unskilled manufacturing has migrated to lower cost locales such as Vietnam, Malaysia or China, many products – especially precision products – continue to be produced domestically. Due in part to the high salaries it offers, Phillips 66 Bayway Refinery states that it has had no difficulty locating employees, ranging from computer science graduates and engineers, to its hourly-paid operations staff and mechanics. The refinery fields more than 1,000 applicants per every 30 job positions. With more than 800 onsite employees – in addition to 300 to 500 contractors – the refinery annually hires between 50 to 70 people, largely to replace men and women who are retiring. Accurate Box – like some other manufacturing companies – employs a staffing agency to temporarily hire 25 to 40 people. Hirsh says, “You simply go through a lot of people who don’t want to learn, or are uneducated to the point that they can’t learn. When we bring someone in who seems to be able to really be a problem-solver and learn something, we take them under our wing and really try to teach them.” UNEX’s McIlvaine says, “The big issue in this day and age is finding people who are reliable. We get people who will come for two or three days, and then they don’t come back. They don’t even call. But, overall, we have had trouble finding people who truly are skilled with both old and new [equipment]. ... We get a lot of young guys who come in and just want to work on the computers, but when you point them to a 50-year-old press brake, [it’s an issue].” Passaic-based Falstrom Company manufactures precision military equipment. President and CEO Clifford F. Lindholm, III, explains, “When I think of advanced manufacturing, it’s really easy to think about a whiz-bang piece of machinery. But, truly, you have to look at the intersection of the person and the piece of equipment. You can have a really smart machine, but if you have someone not so smart operating it, that’s not going to do you any good. You have to have a smart person, with training, operating a piece of equipment that allows you to produce a [component] in an efficient and smart way. I look at advanced manufacturing from a more global, holistic perspective, rather than just a piece of equipment; anybody can go out and buy a piece of equipment. If you don’t have the trained worker who knows how to [operate] it – and definitely has some experience – you are not going to be successful.” Overseas Competition / Reshoring Does automation technology assist with the reshoring of manufacturing to the United States? If a US company purchases high-tech equipment, and simultaneously increases output and decreases employees, it might not need not to engage in overseas manufacturing. NJMEP’s Kennedy indicates there are apparel manufacturers in New Jersey that are doing exactly this: They implement automation to manufacture an array of high-quality clothing. That said, automation is not necessarily the silver bullet for boosting US manufacturing, in part, because, in many cases, manufacturers’ suppliers are located overseas. Additionally – echoing others’ sentiments – Accurate Box’s Hirsh, explains, “For some manufacturing, it is almost impossible to compete, domestically. No matter what you do, you are not going to be able to produce it here in the US as cheaply as they can make it in Thailand or China, where: they are paying people almost nothing, there’s no healthcare or 401(k), and there are none of the other benefits that we have, here. You are not going to be able to compete.” Conclusion All told, manufacturing technology represents a delicate balance between investment (and return on that investment), locating appropriately skilled employees and producing high-quality products. Large manufacturers – such as the Ford’s and GE’s of the world – are extraordinarily automated, yet, again, the vast majority of manufacturers are small. Their technological progress is based on practicalities in a world where “advanced manufacturing” is often a relative term within the context of rapidly-changing technological advancements and ever-complex machinery.
Published by New Jersey Business. View All Articles.