UMP has something to say about resilience during this Global pandemic, and Dave Joyce visited our corporate headquarters in Lake County to learn more about the current business climate. Our biggest challenges boil down to 3 things: Shortages for labor and material, and the ongoing COVID-19 pandemic. For a manufacturer, these three things impact every level of our organization.
#1 – Labor Shortages
Most companies are hurting in this highly competitive market for talent. In manufacturing, the competition is unprecedented. UMP currently has 31 open positions company-wide, with more than half in Lake County, where manufacturing is the top industry.
The labor shortage is a mix of many things. Baby Boomers are retiring, and the younger population is smaller, with most being guided towards college rather than the skilled trades. The unemployment rates are low at the national and state levels, and wages are rising to compete for the smaller pool. There is also a delay in women coming back to work since the onset of the pandemic due to children that are still virtually learning at home.
What can be done?
Grants for automation in manufacturing would lessen the need for as many new hires to increase production levels as demand continues to rise.
Incentives can be created to entice youth to enter the manufacturing sector. Maybe establish scholarships and grants for Training/Apprenticeship Programs and Trade schools.
Equal exposure to the trades and manufacturing jobs as schools give to colleges and career fairs.
An emphasis on girls entering the trades, much like the push for them to look at STEM programs.
#2 – COVID-19 Pandemic: Fear and Protocol
UMP was deemed “Essential”, and has remained in full operation since the beginning of the pandemic. We managed to avoid layoffs during that time by eliminating overtime and filling non-production time with internal projects. When the business came back, our staff was still in place and ready to work.
Many protocols have been in place, like cleaning, masks and incentives to get vaccinated. But even with these incentives, only
47% (61%) are currently vaccinated company-wide. Our discussion with Mr. Joyce surrounded the misinformation that has plagued social media, and its effect on getting to our goal of 85% vaccinated.
#3 – Material Shortages due to the Pandemic
Steel manufacturers idled about 1/3 of domestic production capacity for flat-rolled steel when customers canceled orders and closed plants to stop the spread of the pandemic. Within 2 months, many factories reopened and steel demand for cars, appliances and machinery rebounded. The costs of steel have significantly increased because of the high demand and shortened supply. Since March 2020, steel prices are up 215%
Cleveland Cliffs acquired AK Steel and mills from ArcelorMittal. They have a firm grip on the manufacturing of steel with little incentive to increase production and drop their prices. Experts don’t see the cost of materials getting better until 2022.
There are also global supply chain issues hampering new car production (i.e. the chip shortage, which impacts Appliances as well).
What can be done?
When entire industries can be held hostage by things such as steel production and microchips, it’s time to look at ways to boost production and promote the economic recovery starting where products are made.
In an effort to combat the ongoing labor shortage, Universal has been actively reviewing current processes, investigating opportunities for automation or processing speed improvements. When you are unable to hire the staff count you require, we must find ways to do more within the staffing levels we currently have. The days of “just throw overtime” at a shortage are not sustainable, nor profitable.
Universal has redirected our on staff Manufacturing Engineer towards projects of labor benefit; speed increases or labor reduction, so those employees can be tasked to other work that cannot be automated. Several of those pandemic projects are now starting to see the payback for our investment.