Revaluing Labor

Will attendees at this month's International Manufacturing Technology Show be looking for labor-saving technology? Not exactly.

Most shops and plants today seem to be finished with cutting staff for now, and many would be willing to hire again. However, the way they think about labor has fundamentally changed.

Interlocking trends provide the explanation. Labor costs have risen relative to equipment costs, so that labor is more likely than ever to be the most expensive resource in a shop. But at the same time, there is the pressure to reduce leadtimes—a pressure almost every shop feels. The result of these trends together is not that manufacturers are compelled to "save" labor—as in replacing it—so much as they are compelled to use their labor very well.

Labor cost by itself is neither bad nor good. A high labor cost might be money well spent if the payoff is a substantial savings in leadtime. What manufacturers must cut today, instead of labor in general, are the activities that cost labor and leadtime simultaneously. This means capturing the productivity and the responsiveness that have historically been lost to waste, waiting, work handling and wandering the shop in search of a needed answer or tool. What's needed today isn't labor savings, it's labor empowerment.

I expect this to be a theme uniting many of the products emphasized at this year's IMTS. Automation is only one aspect of empowering labor. Intuitive control and software tools also play a role, allowing employees to be more responsive at lower levels of experience. Another important development is the growing significance of "high confidence machining," in which the process is designed to be predictable enough that the operator who walks away to perform some other task can know precisely when to return.

Stark evidence of the change in thinking about labor can be seen in various shops that have undergone a thorough transition to running lean. In many such shops, the value of labor once was defined by its capacity to keep machines running. The percentage of in-cut time was the measure of success. Now, many of these same shops value equipment for its capacity to let employees perform effectively. Machine idle time used to be the sign of a problem in these shops, but now that idle time is a lot more forgivable. The machine just needs to be ready and available whenever a high-value employee steps up to it with a high-priority job in hand.