Automated manufacturing helps Northern California firms do more with shallow labor pool
The world of work increasingly will be automated, from the “internet of things” interconnecting management with production equipment such as industrial robots. Here’s a look inside a local company that is incorporating advances in such bots to expand sales without losing its workforce.
“When automation comes in, people are nervous,” said Jim Happ, president of Labcon North America, based in Petaluma. “And you just have to keep reassuring them until they see that it makes their life better, that they actually have the potential to make more money because they’re doing higher-value work.”
Labcon makes research consumables such as pipettes used to transfer test fluids for medical research and increasingly in food industry labs.
Some worker fears of automation are similar to trust issues with working alongside a human co-worker, whether the system can do the job correctly and safely, according to the National Safety Council’s Safety and Health magazine. Others concerns are over job security.
While only about 5% of U.S. jobs could be fully replaced by automatic processes, almost 40% of Americans are in occupational categories — namely, office support, foodservice, production, transportation and logistics, and customer service — that could see opportunities shrink to varying degrees by the end of this decade because of automation, per McKinsey Global Reseach’s July report “The Future of Work in America.”
But with record-low unemployment — hovering around 2%-3% in most North Bay counties — bringing in industrial robots can be key for local manufacturers to stay competitive statewide and nationwide while continuing to produce locally.
“For California, automation is crucial, because of housing costs, which are driving labor shortages as workers can’t live here anymore,” said Gene Russell, CEO of The Corporation for Manufacturing Excellence, a San Ramon-based manufacturing consulting group commonly known as Manex. “As older workers leave or as skilled workers get lured away for another $1 an hour, it’s very, very hard for manufacturers to replace them.”
For Labcon, automation is among several necessary tactics to lower the cost of doing business in Sonoma County enough to keep manufacturing local.
“When you reach a certain point, you’re either automating or you’re forced to go offshore,” Happ said. Competition with foreign manufacturer pricing, based on lower wage scales there, puts the onus on U.S. manufacturers to continually increase productivity of their workforces, particularly in higher-wage areas such as the San Francisco Bay Area.
Before Labcon spent $40 million on production and assembly robots in recent years, the Petaluma plant was producing 1 million parts per day. The company also built a 30,000-square-foot semiautomated warehouse about a quarter-mile away from the factory. Robots take up more floor space than a worker’s station, but it can do the work of four to six employees, Happ said. The company also freed up some workers by adding a loading dock conveyor at the Steris facility across the parking lot from the warehouse, allowing containers of finished laboratory pipettes, vials and other products to be moved to the sterilization unit with less labor needed.
After the automation, output at Labcon has jumped to 5 million a day, all with the same 240 employees as before the transition.