Labor shortages can be seen in nearly every industry. In manufacturing, frustration is rising because factories are seeing huge demands but are unable to take full advantage. WHY?
Join us as we explore some of the reasons. Including why the labor shortages happening today are different than in the past.
Why is the demand for blue-collar and manual services workers increasing?
What factors are contributing to the massive drop in corporate profits, especially in manufacturing?
It isn't all doom and gloom!
Stick with us as we discuss some solutions for companies suffering from recruitment and retention difficulties.
One of the solutions is automation - eliminating boring, burdensome, and dangerous tasks. There are many ways to automate, and we review several ways to do so.
Reach out to us with any questions or future topics!
If you don't want to click on those links, pick up the phone to call us at (865) 409-1555 ext. 804.
Labor shortages can be seen in nearly every industry. In manufacturing, frustration is rising because factories are seeing huge demands but are unable to take full advantage. WHY?
Join us as we explore some of the reasons. Including why the labor shortages happening today are different than in the past.
Why is the demand for blue-collar and manual services workers increasing?
What factors are contributing to the massive drop in corporate profits, especially in manufacturing?
It isn't all doom and gloom!
Stick with us as we discuss some solutions for companies suffering from recruitment and retention difficulties.
One of the solutions is automation - eliminating boring, burdensome, and dangerous tasks. There are many ways to automate, and we review several ways to do so.
Reach out to us with any questions or future topics!
If you don't want to click on those links, pick up the phone to call us at (865) 409-1555 ext. 804.
Brandon Ellis 0:00
Hello, and welcome to "Industrial Automation - It Doesn't Have To...". This is Brandon Ellis and today it's been blamed on politicians all the way to baby boomers, we're gonna be talking about the labor shortage and what manufacturers might be able to do about it. So, join us. Hello, everybody, and welcome to "Industrial Automation - It Doesn't Have To", in case you're new, I'm Brandon Ellison, and I'm your host and also the owner of elliTek. As we jump into today's episode, I just want to ask you to hit that follow button and Subscribe Button depending on the platform that you're listening on. And if you're listening on Apple podcast and you enjoy what you hear today, please go to the Show page, scroll to the bottom and leave the podcast a five-star rating and review. Now that we've got the marketing out of the way, I want to say thanks for tuning in. So, let's get started with today's episode. Hey, everybody, this is Brandon "Industrial Automation - It Doesn't Have To" and I'm here with Beth.
Beth Elliott 0:56
Hey, Brandon. Hey, everybody. How are you?
Brandon Ellis 0:58
Hey. You doing all right?
Beth Elliott 1:01
I'm doing great. Yes, yes, we record on Fridays, so it's kind of like a nice wrap up to the week.
Brandon Ellis 1:09
Sometimes. Sometimes the week for me the week is like I didn't get because it's a short week this week.
Beth Elliott 1:14
Yes.
Brandon Ellis 1:15
This week is the week. Monday was Memorial Day. Is that right? Memorial Day. And so, we honored those who have given their all for this country and for our freedoms, we appreciate them. We did that by not working and really trying to focus on them and their sacrifice. So, we want to keep them in mind always, not just on a day. But now, it made for a short week. And so, I'm a little bit behind. But I'm glad you're relaxed.
Beth Elliott 1:42
Yes, I'm super relaxed.
Brandon Ellis 1:46
So that said, let's jump straight into our topic today.
Beth Elliott 1:50
That's right. So, today's title is "Industrial Automation - It Doesn't Have To... Be Frustrating".
Brandon Ellis 1:58
And frustration, because of
Beth Elliott 2:01
Frustration is rising. The factories are seeing huge demands, but they're unable to take full advantage because of the labor shortage.
Brandon Ellis 2:09
The labor shortage and material shortage. These are the things that are kind of the words on the street. If you haven't heard about these things, especially in manufacturing, then you're not in manufacturing. But honestly, this spans beyond manufacturing.
Beth Elliott 2:24
It does. If you've even gotten to a restaurant, you know, anywhere, you can see that you're having to wait.
Brandon Ellis 2:31
Well, you know, especially. Yeah, you're right in restaurant and hospitality for sure. And I think as you know, the CDC recently started
Beth Elliott 2:39
Loosening restrictions.
Brandon Ellis 2:40
Loosening mask restrictions and things of that nature. And as the world begins to reopen, and it's summertime, and everybody, we have a huge population of folks that were plagued with cabin fever. And so, they're ready to travel. They're ready to feel some normalcy again. And boy, they went out in droves. Memorial Day weekend was crazy. There was more cars on the interstate. We weren't really traveling, but we were on the interstate some and it was compared to the last few months the last year. It was it was like we're back in force. And so that's pressure there ever, of course, everybody's wanting to go stay at a hotel. They're wanting to go to the to the theme parks, they're wanting to go to restaurants, they're, they're wanting to be served and so there's increased pressure there. But it just shined a spotlight on the fact that these, especially small and medium sized businesses are struggling to get the labor shortage out there. But our focus, of course, is industrial automation. And that comes down to manufacturing. And so
Beth Elliott 3:24
What statistic did you see on CNN?
Brandon Ellis 3:47
I was reading an article that was published; it was part of cnn.com. And they were talking, now that this this was more than manufacturing. But on the whole. And again, I'm not sure where they got their numbers, but cnn.com you can check it out yourself. But in March of this year, it was reported that in the United States, we had a record 8.1 million, million with an M, million job openings.
Beth Elliott 4:15
That's incredible.
Brandon Ellis 4:16
But only about 4 million workers.
Beth Elliott 4:20
Wow.
Brandon Ellis 4:21
And that's across the entire industry. Now, you did some research that
Beth Elliott 4:27
It was specific to manufacturing.
Brandon Ellis 4:29
Yeah, from April. What was that?
Beth Elliott 4:31
Oh, in April, manufacturing had the highest number of new factory jobs in six months. And that was 53,000 jobs. That's a lot of jobs to fill.
Brandon Ellis 4:44
It is a lot of jobs and, and so let's talk a little bit about that.
Beth Elliott 4:48
So, what's the difference between now the labor shortages now that we're saying then in the past?
Brandon Ellis 4:55
Okay. So, in the past, we've talked about this before a lack of qualified workers, everybody's pushing for a skill set. We are an automation company, we commonly and we have our training center. So, we are commonly being asked to train and offering training to those workers, certain workers, especially in the maintenance field and, and troubleshooting field. Because every time you have an industry, whatever point 0 Revolution.
Beth Elliott 5:27
4th
Brandon Ellis 5:28
Yeah, so the guys that, that in the first revolution, which was steam and water, someone had to know how to maintain that water and that steam plant. And then we as we went on into, you know, mass production, they definitely had to maintain. And so, there's, there's, there's always been a maintenance person involved. And in past podcasts, we've talked about the condition monitoring systems that help to do predictive maintenance and can also potentially take care of some things on the more advanced systems that we get involved with at times. So that it's not replacing the maintenance person, but it's allowing a single maintenance person to oversee multiple monitoring’s, but also multiple fixes, without having to touch each process. Again, increase production or efficiency when it comes to maintenance, because everything requires a certain level of qualified workers. The baby boomers
Beth Elliott 6:31
Yeah, they're starting to retire.
Brandon Ellis 6:33
You know, somebody told me that they're now classifying my age group, as a baby boomer, and I'm,
Beth Elliott 6:39
I don't agree with that
Brandon Ellis 6:40
I'm one generation behind them. So, they're. I'm enough behind them that I'm not one. But I never understood why that. I mean, they're called baby boomers for a reason, mainly, is that there's a lot of them. And so, they're beginning to retire. I'll tell you the thing that I've been seeing, you know, a lot of companies during the pandemic early on, were having to shed people. And so there, there were stories of furloughs and layoffs and things. But also, they offered a lot of early retirement, a lot of boomers took them up on that. And boomers, boomers are at the low end, probably around the 55 to, you know, getting close to 60-year-old mark. And so, if they can take a nice buyout, early retirement, they can. Because they're, you know, assuming benefits and 401 K's retirement plans, and things of that nature start around 65. They only need an extra, you know, five to 10 years. And so why not?
Beth Elliott 7:43
Yeah, but that that's not helping this next generation of workers, they're not going to, we'll get into that.
Brandon Ellis 7:51
That's been a discussion for well before the pandemic, and you're talking about the past and, and all of your notes here are really pre pandemic, but the pandemic really pushed a lot of boomers to go ahead. And then I'll tell you, I've got a lot of a lot of folks, my mentors, that are business owners of various sizes, many of them have decided, in various industries, have decided, because of this, I'm just going to sell. I'm going to end up, I may even take less than, there's a lot of companies that are really pushing to buy; right now, is a big acquisition season. Because there's a lot of owners that are just tired.
Beth Elliott 8:32
They're ready to get out.
Brandon Ellis 8:33
And they're ready to go ahead and live life and they can have a chance to do it early. And that's not what you want to see for a couple of reasons, you know, jobs and things of that nature that may become unstable and that kind of thing. But, but also, we're losing a lot of knowledge with that generation. We have preached on this, preached on this in the past, we have not done an effective means, in my opinion, in the United States of providing mentoring programs for those that are younger, the younger generation. We have done a highly, highly, highly effective job at making sure the younger generation has a college education. But the real-world experience that the boomers have we have not, we've not done good on the information transfer there. And so that, that's going to be, that's happening now, and it wasn't in the past. So, but that has been I think, spurred because of the pandemic.
Beth Elliott 8:37
And then the other thing was the working age population of non-graduate, non-college graduates that's shrinking because like you said the school, there's free school.
Brandon Ellis 9:43
There is free school. So, I don't know if y'all realize this, but in the state of Tennessee, every graduating senior, high school graduating senior, there's some things that they have to do. But if they meet the requirements, which are
Beth Elliott 9:56
They're minimal.
Brandon Ellis 9:57
They're minimal. They can enjoy a two-year, two-year free college. And so, a lot of our people in Tennessee have college degrees. And we've been doing that for a long time. That's not true in a lot of other states. It's becoming something I think, I think a lot of the states are looking at Tennessee for that. But you know, there's debates both sides, you give someone something for free, how valuable do they perceive it to be? If everybody's got a college degree, how valuable is a college degree? You know, those kinds of things. But at the same time, there was a time when we said, we need more training, our kids, our people, and that was the government way. And for us, it's funded by the lottery. So, a lot of lottery scholarships. But still, that's how the state decided to appropriate that money. And they could have appropriated it in a lot of other worse, worse ways than that, so I applaud them. But you know, every Yin has a Yang. And so, there's always an up and down, a pro and a con. But you're right. We have, our gen and this is solidly on our generations head, we have told our kids, you must have a college degree to be successful. And as a result, the non-degreed positions are really starving for people and starving for those skill sets. So increased demand, but shortages and raw materials.
Beth Elliott 10:23
Yeah, you were listing off a lot. I didn't realize there were so many, such a shortage in some of these basic materials.
Brandon Ellis 11:33
Well. Yeah. And so, the global semiconductor shortage, a lot of people have heard of that. They probably been I mean, that's, that's, that's been making the news because your large auto manufacturers have to have these chips. I think it's specifically Bluetooth type, type chips or the 5g type chips.
Beth Elliott 11:50
Oh, those are fancier than my car.
Brandon Ellis 11:54
Well, for new cars, everybody gets one. And so, the Bluetooth especially for hands free driving, because of the, a lot of cellular laws and talking on the phone hands free and things of that nature. But so, a lot of the auto manufacturers, I was watching on a news clip the other night that Ford has acres of vehicles. They even have the window stickers in them. They're fully ready to go. And they're all in a large, these large chain link lots, because they don't have the chipsets in them. They're all waiting on the chipset. Now, the good news about that is that, at least if you can believe the news, is that the word was that hopefully the semiconductor shortage. Apparently, a plant burned down. One of the major plants had a fire that affected production. But then on top of that, all the surges and electronic devices to the pandemic and video games and things of that nature. But especially we talk about Bluetooth because almost everything has Bluetooth nowadays and some kind of a wireless or a Wi Fi chip. But apparently that's supposed to be coming to a bit of an end or finding relief in the mid part of this, this month, June. So hopefully the, they're going to be ramping back up. But a lot of, a lot of the automotives have been doing off weeks and things of that nature, pulling production down, eliminating weekend production, shortening shifts, things of that nature, because they, they can't ship the vehicles out. Some of them just physically running out of space to store vehicles. And then a lot of car lots are sitting empty, because they can't get the vehicles. And so, the good news about that article is if you have a used car to sell it's a seller's market right now for used cars because the dealerships are empty and they're dying for vehicles to sell. So, you can probably get a good deal on a used car. But you better pocket the money and wait for a while because the new car market is going to be a huge demand right after that and prices, I'm sure are gonna
Beth Elliott 13:56
They're gonna reflect that, won't they?
Brandon Ellis 13:57
They're won't be wanting to make any deals. So, if you've got a used car that you're kind of hanging on to and you're kind of thinking about, now's the time. But as far as raw materials other raw materials besides the semiconductors, there's a huge resin, resin, resin shortage. So, anything that uses, think of plastics, one of our manufacturers of sensors. Sensors are potted with a with an epoxy resin. But for some reason there's a resin shortage. Now that I think some, I don't know why, maybe another fire, I don't know but there's and I'm not even sure on the planet where most resin comes from.
Beth Elliott 14:35
That's what I was wondering.
Brandon Ellis 14:36
But I just was in a discussion yesterday afternoon and heard that and that's like wow. Tool steel, different types of ferrous and non-ferrous metals, aluminum. We are experiencing a large aluminum shortage. So, in industrial manufacturing, there's we use aluminum for a lot of things for machine frames, for of course all the parts and things that but specifically, this what we call t slot, extruded aluminum. And we, we sell that we provide that we machine that. Luckily for us, we're able to, we have a source and, and it's being regulated well, and we're keeping our customers going. We got a lot of new customers pouring in because apparently the lead times for some, some of the other brands out there very, very, very, very high. But we're able to, to get now we're not selling bulk. So don't call us and ask us for bulk sales we're regulating because of this thing until we can get through it. Bulk sales will resume. But right now, they're being held off to manage the build.
Beth Elliott 15:38
How long do you think that'll last?
Brandon Ellis 15:40
I really don't know; I'm surprised by this whole thing.
Beth Elliott 15:43
Yeah, that caught me off guard.
Brandon Ellis 15:45
But it's been building and building over the last four weeks, and it doesn't show signs of stopping. Lead times from a lot of our competitors are as much as 12 to 10 to 12, even 18 weeks.
Beth Elliott 15:56
So how quickly can elliTek get it?
Brandon Ellis 15:59
If it's a kitted system, once the, you know, the designs and everything are signed off, and it's a real order, we can usually ship in three to five days.
Beth Elliott 16:06
Okay
Brandon Ellis 16:07
But that comes because of mitigating our business by ceasing bulk orders, large bulk orders. And that's where I think the other people didn't. And so, when people saw that there was a problem, they bought out all their aluminum, and they're just not able to keep up with demand now. So, I don't know, that's my theory in talking with folks. But that's a kind of a new one. Tool steel, so a lot of our tool steels the prices, it's available, but the prices are soaring right now. And of course, you know, it's kind of like, building materials in the housing market. As demand goes up, prices are going to go up.
Beth Elliott 16:43
There's a huge demand here. For have you tried to buy a piece of two by four.
Brandon Ellis 16:49
No, I know better. Probably cheaper to use tools steel. But the housing market, at least in our area is just unbelievable. There's no houses. And so, everyone's trying to build a house. But the demand on materials is through the roof.
Beth Elliott 17:06
It is. Yeah, we're gonna get a front new front door for our house, and we can't get it till September.
Brandon Ellis 17:12
Oh, really?
Beth Elliott 17:12
Yeah.
Brandon Ellis 17:14
Hope there's another door there in the meantime.
Beth Elliott 17:16
Right. No, I've got beads.
Brandon Ellis 17:21
But this all comes down to I think a lot of the shortages, a lot of people are asking why the shortage, why the shortage? And you know, again, I've heard factory fires in some case I've heard. We don't know. I mean, why is there, ya know, bulk purchases, everybody bought out all the stuff increased, you know, just suddenly. Factories are opening up and they've just pulled all this stuff, suddenly, there's little supply on huge demand and things of that nature. But I believe and I think many others do that this also is indicative of a labor shortage.
Beth Elliott 17:53
Oh, because the people that make those raw materials, there's people that have to prepare the raw materials, right?
Brandon Ellis 17:59
That's right, I don't think that we're running out of raw materials. I think we're having a hard time getting them out of the ground, getting them wherever it needs to happen to make them a thing that's usable. And, you know, I was reading some articles, because we live in the US, and we tend to kind of live in our US bubble. So, I started reaching out and doing some research on what's the labor situation internationally. And honestly, China is suffering from the same types of things that we're suffering from in terms of labor shortage. And there's a lot more people living in China than there are here. But I'm not sure of their reasons and why it came about. But I think, of course, a lot of things China constituted a, they limit the number of kids that they're allowed to have over there.
Beth Elliott 18:49
They've increased it to three.
Brandon Ellis 18:51
Oh, have they.
Beth Elliott 18:51
Yeah, this past week, I believe.
Brandon Ellis 18:54
Well, so, you know, in 20 years, they'll have a maybe a fix to the problem. But up till now, it's been I think it was supposed to be limited to one child.
Beth Elliott 19:05
Two
Brandon Ellis 19:06
Two children. And so that's been going on for a while. And I think that that now they're seeing well maybe that wasn't the best. I mean, they were doing that for other reasons that valid or invalid. It's according, I'm not going to jump on any side of the coin there. But I know there's reasons for everything. But there's also for every Yin, there's a Yang, there's a there's a pro and a con. And so, we're kind of seeing how that kind of stuff playing out. But because the demand for blue collar and manual service workers has increased, because the number of non-college graduates is decreasing, and this is in the US for sure. I think that's why we're having a hard time. We're seeing the results in terms of material shortages, and in terms of just decreased supply across the board. And a lot of that's manufacturing; a lot that's manufacturing.
Beth Elliott 20:01
Okay, so the accelerations in wages, quit rates and low labor productivity growth has hit corporate profits, especially hard, especially manufacturing. Now I found a stat here. Do you want me to read that?
Brandon Ellis 20:16
Sure, go on.
Beth Elliott 20:17
Since I butchered that other one?
Brandon Ellis 20:18
Lets' see, we haven't done any
Beth Elliott 20:23
Sounds
Brandon Ellis 20:26
I need to get back on my effects. I'm off my game.
Beth Elliott 20:28
Yeah, we're getting too serious here, Brandon. We'll get to the good part. I know we're going through some doom and gloom and stuff, but it's gonna get better. But from the peak in the fourth quarter of, this is pre pandemic, this is 2014, the fourth quarter 2014 to the second quarter of 2019, profits for manufacturing corporations have dropped by 46%.
Brandon Ellis 20:57
Holy cow.
Beth Elliott 20:58
That's huge.
Brandon Ellis 20:59
That's and that, so that's pre pandemic?
Beth Elliott 21:02
Yeah,
Brandon Ellis 21:02
That's the 2019 second q2 of 2019. Wow.
Beth Elliott 21:08
I got these numbers
Brandon Ellis 21:09
We were down. We were on the downturn anyway.
Beth Elliott 21:11
That's what, that's what it looks like. Yeah.
Brandon Ellis 21:13
And, you know, as I think back, you know, the one thing about the pandemic year 2020, it almost, you know, it's kind of like waking up and thinking, was that a dream, did I dream that or forgetting it all together. And so 2019 and 2020, run together, begin to run together for me anyway. But as I think back to 2019, we were Yeah, we were kind of we were rebuilding a little bit because of some things, tariffs and things of that nature that happened in 2018. But we were on the upswing by q3, q4 in 2019, so this goes to the second quarter of 2019. In 2019 second quarter, we were, we had a bit of a of a downswing and it kind of bottomed and then it kind of started easing back up.
Beth Elliott 22:00
Picking up. Yeah.
Brandon Ellis 22:02
So, we were back on an incline, a growth curve, and it was looking very promising into 2020. But it was really probably right at the end of q1 and q2, when the bottom kind of dropped out from the pandemic for most folks. We had enough in the funnel to keep us moving. And the good Lord provided well, but many were really suffering then. And then there's, there's the back and forth about, we're going to be discussing, you know, hindsight is 2020. We're gonna be discussing 2020 and how that was handled for generations to come. Should we have shut down, you know, factory? Should we have shut down the small businesses? Should we have kept the large ones open and made the other ones not? You know, all this stuff, the debates that you've heard, who knows?
Beth Elliott 22:53
That's why history is so important.
Brandon Ellis 22:56
History is important, but it's also, unless you can repeat history unless you can go back to
Beth Elliott 23:01
But you learn from history.
Brandon Ellis 23:02
Well, you do. But it's hard to say, it's difficult to say, it's speculation to say that, if we didn't shut down, it wouldn't have been that bad.
Beth Elliott 23:11
If it's and buts were candy and nuts, Christmas would be every day.
Brandon Ellis 23:15
Yes. All right, good quote of the day. So, so it's hard to say but that's pre pandemic. So pre pandemic, the majority of the industrial manufacturing was heading a bit on a downturn. And then here comes the pandemic.
Beth Elliott 23:32
It started, like you said, that was the second quarter. So, it was picking up in the third.
Brandon Ellis 23:37
Yeah, yeah.
Beth Elliott 23:38
In the fourth.
Brandon Ellis 23:39
And even in the first quarter, you know, the first quarter was strong. And, and then second quarter.
Beth Elliott 23:46
Bottom fell out.
Brandon Ellis 23:47
Yeah, that's really it was really it. And so.
Beth Elliott 23:50
So, let's get to some bright stuff. Enough of the doom and gloom.
Brandon Ellis 23:56
Well, yeah, yeah, it is doom and gloom. And, you know, it's important that we, I want to get to the good stuff, but I want to preface it with this. Why are we talking about it? Why is this? Why is this something that's on my heart to talk about? And, you know, as we're working with manufacturers closely, we want to see them exceed, succeed, we want to see them overcome. Our mission statement is to empower our clients and so to sit back and just say, well, it's all doom and gloom, good luck is not our that's not our culture.
Beth Elliott 24:29
That's not our way.
Brandon Ellis 24:32
But it's, it's important to see what what's coming down the pike. And so, I follow an economic company, analysts company called ITR and in looking at their, as their analysts have gotten involved with some of the things going on, they're predicting a full-on depression in 2030. And honestly, they I remember, they did a thing it's through CSIA, so we're Members of CSIA
Beth Elliott 25:01
Isn't it Control System Integrators Association?
Brandon Ellis 25:05
Controls and Systems integration of America. Great organization. So, shout out to them. Hey, Lisa. But and that's how I learned about ITR. And so, they were doing an analysis of 2020 at the beginning of 2020. So, this was around, I can't remember February, March of 2020. So, we were just in the throes of this. And then we, they did another thing about a month ago, basically a year later. And are looking back at what they had predicted. And I mean, they nailed it.
Beth Elliott 25:42
Oh, did they?
Brandon Ellis 25:43
We were We were 98. They were 98-99% accurate on what's going on. So, they do a great job. And they we made, I made decisions for our company based upon their, their prognosis, and it was it was good adjustments. And so being able to do that, and look ahead, so as far as the Great Depression, I hope they're wrong. But how do we mitigate that? How do we overcome that today? Put things and mechanisms in place today dealing with the stuff that's right in front of us, but also looking down the pike, to see what we can do with that. So, investments today need to be made wisely, such that we can circumvent, potentially, what might be to come. And so, if we all circumvent well enough, it won't come, they'll be wrong. And on this one, we want them to be wrong. And so, the so let's talk a little bit about the
Beth Elliott 26:43
Some solutions.
Brandon Ellis 26:45
So, what are companies doing right now from your research, to try to try to get past this labor shortage to get started?
Beth Elliott 26:53
So, what they're, what they're doing is they're shortening, shortening the recruitment process with fewer interviews to make faster hiring decisions. So, something that would typically take, you know, few weeks, they're, you know, making it shorter.
Brandon Ellis 27:07
Kind of dangerous, but kind of necessary. So,
Beth Elliott 27:11
But you know, when you've got somebody there that, like you said, the other day, there was somebody that had over 100 openings, and no applicants.
Brandon Ellis 27:20
No applicants, 135 job openings with zero applicants.
Beth Elliott 27:24
You can't be too choosy.
Brandon Ellis 27:26
Well, that's true. That's true. Yeah, so the concept and, you know, I know that HR managers are probably much better, I'm sure much better at hiring than, than I particularly am. But I'm pretty proud of the team that we put together.
Beth Elliott 27:39
Got an excellent team.
Brandon Ellis 27:40
I think we've done a great job. But we also, we can't, we don't take forever, but we don't rush into it.
Beth Elliott 27:46
No, but you also there also, I think they need to focus on retention, increasing the retention efforts, because it costs a lot more to replace an employee than to retain them, because you're gonna have to train that new person all over again. But you guys, elliTek does an excellent job in keeping the employees happy. So
Brandon Ellis 28:07
elliTek. Well, thank you for that. So, retention, yeah. So, you also, I see here on your notes, increase flexibility and work schedule, and then reduction of workloads. So, they're doing, they're increasing the benefits. What I like about this is and then the last one was decrease required overtime. So, I guess making overtime more of a voluntary kind of act or things of that nature. Overtime is kind of another one that's got a yin and yang, right. But what I like about this, we're hearing, I saw this thing, I think it was on Facebook, it was a, it was a sign you know, these sign wars going on and stuff, but it was a sign on, it was actually a gentlemen's club. Sorry. It was a gentlemen's club. And I think the gentleman's club was something about everybody there that works there's a 10, and it said now hiring eights. And so, you know, it's meant to be humorous, I'm sure. But, but nevertheless, we hear a lot of, I saw on a local fast-food restaurant that they were now increasing wages. It said this just straight out. We're now paying $12 and $15 an hour job. And so, there are some that argue there's not a labor shortage. There's just, it's a reset in pay amounts that we should be. It's just companies, manufacturers, and even outside of manufacturing are just not paying their employees enough. I think that's, I think that's up for debate. I think that that some jobs, I mean, each job should pay what it's worth. But then with benefits and things of that nature that might be involved. The flexibility needs those kinds of things. What I think though, is I think it comes down to this, I've always heard this, this statistic. If someone hates what they do, or they don't enjoy their job, you can give them a raise, and it will, it will give them a good attitude for an average of, actually a maximum of six to eight weeks. And then they're going to be back to miserable, and their attitude is going to follow. because we as humans don't like to be miserable. A lot of people have blamed the government and politics on this labor shortage because of the unemployment increases and things of that nature. I don't know, I don't know. But what I do know me included, if I'm given the opportunity to choose between sitting at home, being a stay at home, go take a high, you know, when I want to and
Beth Elliott 30:41
Do what you want, when you want.
Brandon Ellis 30:42
Do what I want to. Streaming Netflix and playing video games all day. We all more, some more than others, we all have a tendency to be to enjoy being lazy. And that's not I'm not talking about people that need to be on these programs for disability purposes and things that they can't work. I'm talking about people that that can and so I can see that if, if that's true, I can see that in myself. But also know that I like what I do. I talked to a gentleman that owns business, they're in the tube bending, they make to benders and things. And he told me that he and his buddies were sitting around one time and they said, talking about winning the lottery. I guess Tennessee had a huge, huge, you know, one of those huge power balls or something. And they were all talking about what are you gonna, what would you do if you won it? And they came around to him and he said, you know, I'd get up and go and start building tube benders because that's what I love, that's I love to do. And, and so it doesn't matter how much money you're given. You either love it or you don't. And I would say that the people that are employed for you right now, at your manufacturing facility, at your restaurant, are there because they enjoy it. They're, they feel like they're good at it, it completes them or gives them some type of a, you know, a good feeling of completion. What I like about this, these solutions you're talking about is that those are the people that need to be getting taken care of, if you're gonna spend more, don't spend it trying to entice people to come in, take care of the ones that are there first. And then let's start talking about how we spend the money after that. And so that brings us to your next point.
Beth Elliott 32:22
So, eliminating the boring, burdensome, dangerous tasks, and improving work conditions. So, I think we improve that productivity through automation.
Brandon Ellis 32:36
Automation. And that's we have been spending a lot of time, me even me, I get to walk through a lot of manufacturers with the management whatnot. And we're looking for these burdensome, these non-ergonomic and menial type tasks. Not to replace the people that are there.
Beth Elliott 32:56
No.
Brandon Ellis 32:57
You're there, you're safe. In fact, let's refer back to the previous point, I'm pushing for a raise for you. But also, I'm pushing for training for you to get you up to the more skilled work that doesn't make sense to automate. We're talking about automating things. Right now, automation is, it's a great time to automate.
Beth Elliott 33:17
It is
Brandon Ellis 33:18
Even if you've got to go out and if it's a capital expenditure, and you're looking at borrowing money as a company, a small and medium business, money's cheap right now, rates are low. I promise, inflation is underway, and rates are going to go up. Now is a good time to make these investments, these capital investments and start planning. So, before you just start shelling out money to try to get workers in, I know that fixes the problem and the pressure right now. But if you're running these heavy shifts, take care of the ones that are there. And I would say, start considering some automation programs and get those in the budget and get those underway. We have been doing walk arounds and walk arounds and just discussing Is this a good opportunity? Is that a good opportunity? To try and find all the low hanging fruit as far as these menial tasks with the goal of reclassifying the positions of the people that are there. So, we're, in doing that we are reducing their workload. And we're reducing their required overtime. We also increase retention efforts.
Beth Elliott 33:19
If you give them a meaningful if there's a meaningful job.
Brandon Ellis 34:30
That's right. Or if it's, you know, again, there's non ergonomic jobs. Let's automate that job. Let's not make it to where it's fatiguing. Let's let a robot do that or change how they, you know, they're involved. Those kinds of things. And then so there's a couple of ways that we can do this. There's big talk about this lights out factory. And I've commented on that at least once before
Beth Elliott 34:55
Was it the dark factory?
Brandon Ellis 34:56
Yeah, so the idea is it's all robots and machines, it's all automated and there's no people inside. So, you don't even need to have lights inside.
Beth Elliott 35:04
That's fantastical thinking
Brandon Ellis 35:05
Factory, you know, you keep the lights off, the factory stays dark, robots are just in there working, but they're not able to fix themselves. So, there's always going to be people and I every machine, every machine, guys, is gonna jam up. It's gonna have something and does that need to be a highly skilled maintenance person? No, that could be one of these skilled, you know, taught trained workers that knows that when the robot crashes or when the tooling, you know, breaks or the box goes in sideways or whatever, they can come over there, clear the machine and restart it and maintain it. In that regard. They don't have to be programming robots and stuff like that. Leave that for your maintenance guys, your maintenance techs, but you need all those people, you need them. And so, there's no, there's. The concept sounds good on paper, maybe even on some budgets in planning. But I think that's a, I think that's a fool's errand if you think you're going to put all your money in that bucket. I think what you have to do is you have to focus on a couple of things. So, what types of automation?
Beth Elliott 36:10
Yeah
Brandon Ellis 36:10
So, robots. We've talked a lot about robots of late, the collaborative robots are one thing, but also just general industrial robots. I was having a discussion the other day, with you asked me when we were talking about what podcast it was when we were talking about collaborative robots. It Doesn't Have To Be main, no, manual. I can't remember which one.
Beth Elliott 36:30
I think it was. Yeah, it was manual.
Brandon Ellis 36:33
But we were talking about collaborative robots. And someone said, you know, and this is marketing for you. They said, a collaborative robot, and I said, you could do an industrial. And they said, Yeah, but you have all that guarding and all that expense. Well, you can get industrial robots for less than a collaborative robot, and you can, in some situations, and you can get higher speeds, more accuracy. And the cost, just the savings on the, if you can get the robot for less, especially if you're talking about SCARAs, nowadays. You can, you can pay for a lot of guarding, with not a lot of money. And so, you know, don't feel like that it's got to be collaborative, necessarily, industrial robots come into play. But work with a company like elliTek that, that you know is, knows their stuff. But robots, then IoT.
Beth Elliott 37:22
Yes.
Brandon Ellis 37:22
So, we still have a lot of the decisions that are made, not just decisions about capital improvements and things, not just decisions about production, and how the machines where the bottlenecks are, and that kind of stuff. That's important. But what we're talking about, how does the, how do we reorder materials? Are we going to be able to make the truck? Do we have enough raw materials? Is this shortage going to affect us? I mean, as you're consuming the raw materials, which is manufacturing, to have that real time in an automated fashion coming back up, that's a great, great automation project to consider. And then we don't do it, but we talked about Robotic Process Automation, RPA. But in the, on the office side, there's plenty of companies out there that do, that's not one that we do. But you begin to automate those processes, so that reports are generating automatically. And because you need people. Robots can't look at a report and decide what the, you know, the raw material order, and the bulk order needs to be next, you know, next month or make, do forecast and make projections, humans are going to have to do that. And so, I mean, you can run it through software's and things of that nature. But there's always someone that says yes, but it doesn't take into account this important thing. And so, you can't take the human out of it. And then just general training. Like I said, I just listed off all these things that people need to be able to do on a semi-skilled level, and then a troubleshooter level. We've got our training center; we offer all kinds of trainings. But this is, of course, what I've evangelized for the last five years and we're trying to get ready to go push go on is our workforce development program here at elliTek to start bringing that maintenance troubleshooter level up. But we also need to focus on those factory workers, line workers that we're going to reclassify and we're going to give them a bit more skills so that they can pull some of the pressure off of maintenance troubleshooters. So, the all those things are investments that I think are wise investments right now. Again, money's cheap; people are in short supply. You know, honestly, what I'm hearing and what we're seeing in our business is that people are really forgiving right now. If you're late if you if we can't, sorry, we can't deliver this product because of the chip shortage. That's okay. I'm gonna go on vacation, you know, or whatever the everybody seems to be.
Beth Elliott 39:54
Well, we're going on this summer months, right.
Brandon Ellis 39:57
Everyone's just glad to be getting back to normalcy. But that's not going to be the case forever.
Beth Elliott 40:03
No, I don't think everybody's going to be as forgiving. third, fourth quarter.
Brandon Ellis 40:08
There are shortages with food, there shortages. And they're only going to get worse, they say. They're predicting all this doom and gloom. And so, nobody wants that. So don't be the Don't be the bottleneck in the whole process. Start looking at some of these things. If you're, I had a person tell me the problem, we can't automate that process because it's, it's already running three shifts, seven days a week. Well, if you're running that many shifts on a process, you need to start looking at pulling pressure off the process anyway. So, work in automation in that new, go ahead and start that Capital Planning, if you can. Again, make those investments now, while rates are low, if you're having to, if it's having to be financed. But if you've got the money in the coffers, you know, don't pay out big bonuses this year, reinvest it in these capital improvements, it will help you in coming years, and there'll be much more money in the coffers, then I'm sure of it. But we got to get ahead of this thing. And automation is not the answer to the labor shortage because we don't need the labor; it's the answer to the labor shortage because we can reclassify the labor that we have. And then we got to get busy training, training what we have to make up for this loss of the baby boomers.
Beth Elliott 41:29
Yeah, yeah.
Brandon Ellis 41:30
So that's Brandology labor shortage. If we can help you with any of those things, I want you to I want to encourage you, even if you're not in our region, if you're just looking for answers, and you just we don't know what to do, what things can we consider. We don't have all the answers, but we'll certainly try to help. This is a nationwide problem. Our problem [mission] is to empower you just as much it is our local customers. So, reach out to us at elliTek.com, that's e-l-l-i-T-e-k.com. or give us a call 865-409-1555. We are on Facebook, Instagram, LinkedIn,
Beth Elliott 42:04
Brandon Ellis 42:06
Twitter, yes. And just search for elliTek. And then when you're looking for our podcast, just go to your favorite podcasting streaming app, and just search for elliTek. And you'll find "Industrial Automation - It Doesn't Have To".
Beth Elliott 42:19
And if you like what you hear, please rate and review and share, share the podcast and if you listen on Apple podcast, go to the Show page and scroll to the bottom and leave the show a five-star rating and review. We would greatly appreciate it.
Brandon Ellis 42:34
Absolutely. So, we're rolling in on about a 45-minute session here. That's a pretty good, pretty good time. So, let's do this, Beth.
Beth Elliott 42:43
Yes, Brandon.
Brandon Ellis 42:44
Let's say goodbye.
Beth Elliott 42:45
All right. Goodbye, Brandon.
Brandon Ellis 42:47
All right. So "Industrial Automation - It Doesn't Have To", this is Brandon. I'm here with Beth.
Beth Elliott 42:52
Thank you all for listening. We appreciate you.
Brandon Ellis 42:54
Yeah. And have a great two weeks. We'll see you in another two weeks. Take care.
Transcribed by https://otter.ai