By Shell Polymers on Jun 20, 2021
In the first quarter of 2019, the National Association of Manufacturers (NAM) reported that more than 25% of manufacturers had to turn down new business opportunities due to worker shortages.¹
2021 magnified this challenge as businesses across industries struggled to staff to keep up with demand. In manufacturing specifically, this was causing supply chain hiccups including production delays, higher end use costs, and a lack of transportation and raw materials. According to Ford Motor Co, the semiconductor scarcity, caused by a surge in demand and a lack of resources and labor, could force the company to produce 1.1 million fewer cars, causing a 2.5 billion dollar loss in 2021.2 With the plastics industry already facing record-high costs and raw material shortages, adding the labor challenge is like putting salt on a wound. In a recent survey, the Manufacturing Institute reported that 77% of respondents are struggling to fill job roles.3
Advanced Technologies Help Manufacturers Bridge the Labor Gap
To combat the issue, manufacturers are exploring advanced technologies to unlock cost efficiencies.4 However, the increased use of technology also increases the level of employee skill required, which provides another layer of challenge to the hiring dilemma. In a recent McKinsey report, they showed the likelihood of COVID-19 propelling a faster adoption of automated machinery and AI, especially in places where physical proximity is high, like factories and warehouses.5 As McKinsey stated, “The common feature of these automation use cases is their correlation with high scores on physical proximity, and our research finds the work arenas with high levels of human interaction are likely to see the greatest acceleration in adoption of automation and AI.”6 McKinsey also reports that remote work and virtual meetings will continue to be a popular format for some employers, though that may be difficult for locations like factories where on-site staff is needed.7
In addition, industries like hospitality and fulfillment are experiencing similar labor challenges, so manufacturers are competing against job incentives like signing bonuses and other valuable perks. For example, an Amazon facility in Michigan was offering a $1,000 signing bonus for warehouse work to bring in new workers. In an interview with Plastics News, chief administrative officer David Lawrence of a Michigan-based metal stamper and engineering firm shared that he hypothesized that the hard work of manufacturing may be losing out to jobs perceived as easier.8
Overcoming challenges like hiring requires an in-depth knowledge of what is happening in the industry. Collaboration and transfer of knowledge across the plastics value chain is one critical piece to streamlining supply chains in the face of disruptions. That’s why Shell Polymers has our ear to the ground and shares insights to help plastics converters navigate trying times and effectively forecast supply needs, implement the latest technology, and establish cost-efficient operations.