In terms of efficiencies, the automotive manufacturing sector outperforms three food and beverage categories. Source: US Bureau of Labor Statistics, Booz & Company analysis.
Consumer goods manufacturers—especially food and beverage processors—have enough problems: the high cost of energy, escalating cost of commodities, short product lifecycles, intricate and difficult supply chains, regulatory issues, inefficient processes and so on. But another issue looms: finding qualified engineers and production workers/operators to keep plants operating. Part of the problem is that factory work just isn’t attractive to young engineers who see the glory in R&D, product design and software. In addition, plant efficiencies in the food and beverage industry are simply not up to those in the automotive industry, according to Bureau of Labor Statistics.
A recent white paper, entitled Developing and Engaging the Manufacturing Workforce, looks at consumer goods (mostly food and beverage) manufacturing and proposes some solutions to get these plants up to speed. The paper was developed by the Alliance for Innovation & Operational Excellence (AIOE) through its Manufacturing Excellence Share Group (MESG). PMMI and the Grocery Manufacturers Association (GMA) launched AIOE in 2011 as a forum where operations professionals from consumer goods companies and their solutions providers can address key issues and best practices. Siemens sponsored MESG; Booz and Company developed the paper.
While manufacturing jobs may be coming back to the US, actual numbers of employees reflect a necessarily lean culture. Since 2000, the number of production-related manufacturing employees declined by an average of 4.3 percent annually; the number of non-production workers decreased by 3.4 percent per year. With this steady decline in factory employment, young people have turned away from manufacturing in droves. In a 2011 Booz & Company study, only 50 percent of engineering students said they regard manufacturing as an attractive career option compared to 75 percent who were partial to R&D or product development.
Because of shortages in the talent pool for professional and production manufacturing employees, consumer goods manufacturers are paying a premium for their US-based workforces, according to MESG. Between 1997 and 2007, US food industry production worker pay increased from $16 an hour to over $20 per hour, a compensation rate eight times higher than in Mexico and 20 times higher than in China.
But workers in grocery segments do not measure up to the productivity levels of their counterparts in other industries, particularly those in the automotive sector. For example, since 1987, the output per hour of snack food production workers rose only 1.9 percent compared to gains of 3.2 percent for automotive assembly workers. A great deal of the deficit, the paper says, can be tied to an inability to engage workers well enough on the job. Finding workers with the right skills also is a real challenge for employers.
In a survey of 12 MESG participants, 80 percent identified problem-solving as the most important skill they evaluate when making hiring decisions for production and technical labor. Dealing with advanced automation systems requires a level of interpersonal and mechanical sophistication many potential hires simply don’t possess. The ability to solve problems is the most difficult skill to find in today’s labor markets.
When an opening needs to be filled, the average time to hire a production worker has increased 50 percent since 2007, from two to three weeks. For technical workers, the time to find a qualified applicant now averages 10 weeks—up from only six weeks five years ago. This does not necessarily reflect poorly on the available workforce. Part of the blame can be put on the elimination of the local HR office in individual plants. Local plants now must wait for a centralized corporate office to conduct the hiring.
To find qualified staff, some processors are adopting innovative recruitment strategies. Some are hiring mechanics from local car dealerships and repair facilities, stock car tracks and automotive training schools because of their innate troubleshooting skills with complex machines.
Note: This is part one of a three-part series. Parts two and three will appear in Tech Flash
, Food Engineering’s e-newsletter and will focus on training and next generation workers.