Written by Katie Cocco, August 15th, 2021
Katie Cocco is a Sapphire and Schreyer scholar majoring in Supply Chain Management at Penn State University. As President of the Nittany Lion Consulting Group, she oversees a network of over 150 students interested in a consulting career. Katie also served as a customer supply chain co-op at The Hershey Company, where she was granted the opportunity to participate in a program known as “Manufacturing Helping Hands.” This program enabled her to serve as general labor employee in The West Hershey plant (the largest chocolate plant in North America), for five workdays. Through this experience, Katie was able to see the tremendous importance of manufacturing and gain better insight into how manufacturing operates for a consumer-packaged goods company. This experience sparked her interest in automation practices and manufacturing.
Amid COVID-19, many companies struggled to stay afloat. Customers everywhere hustled to local stores for necessities such as toilet paper and soap, only to be greeted by an empty shelf. Frustrated and confused, many customers did not realize the virus’ immense effects on supply chain and manufacturing.
Certain industries, such as the travel industry, declined in demand during the pandemic. However, many consumer goods businesses skyrocketed. For the industries that boomed during the pandemic, it was difficult to keep up with demand – even with certain manufacturers running production lines 24/7.
Further, labor was difficult to acquire during the pandemic spikes, as many employees were hesitant to work, got sick, or found more value in obtaining a government-provided stimulus check. All these factors resulted in constraints that affected consumers nationwide. Businesses were simply unable to keep up.
Many professionals in the industry may have seen the pandemic and the labor constraints as an argument to increase manufacturing automation; however, did automation truly increase because of the pandemic?
The Need for Human Labor Amid the Pandemic
Throughout these trivial times, many companies reevaluated the way in which they tackled manufacturing altogether. According to Bank of America, many manufacturers considered how to increase automation to decrease the number of human laborers needed (“Manufacturing Trends”). Adopting more automation would help fulfill many necessary roles that were difficult to find labor for.
However, Dr. Robert Novack, a Supply Chain professor at Pennsylvania State University with over 30 years of experience studying the industry, argued that COVID-19 did not have an immense effect on automation adoption.
Numerous reasons back up Dr. Novack’s claim, one of the most compelling observations being that if automation options were available prior to covid, they would have already been adopted by companies. In other words, the pandemic is likely not the core reason companies would choose to increase their automation practices. As recent technologies and automation practices are created, companies that benefit from them will obtain them promptly to drive cost savings.
Additionally, acquiring and implementing modern technology takes a great deal of time, therefore, it would be exceedingly difficult for companies to implement advancements swiftly amid the pandemic. Similarly, automation comes at a remarkably high fixed cost. As more volume is produced, the cost per item decreases. Therefore, companies that do not produce a large volume may not find justification in adopting automation. Lastly, there are more feasible solutions, such as simply increasing the amount of time each line runs. In that case, the manufacturer would need more labor to supervise and guide production.
An Operation Excellence Manager at the Reese’s factory (who prefers not to be named) explained that the plant had to hire more employees than ever to enable the production lines to run for more hours in a day to keep up with demand. He further argued that COVID has not encouraged the company to invest in more automation systems, but rather, it has encouraged the company to hire more laborers as the demand for chocolate increased.
This poses the question: why must companies hire people rather than just investing in automation?
According to Dr. Novack, “There will always be a role for people in manufacturing, but things that are repetitive and monotonous, like welding, are going to be done by machines or robots.” In other words, there are numerous tasks in manufacturing that require human involvement and while certain tasks can be better off automated, not all can be.
Ally Simon, an industrial engineering student at West Virginia University with six months of manufacturing experience at Toyota, and six months manufacturing experience at The Hershey Company, noted that many roles in manufacturing sites require human intervention and have no real automation substitute. Further, when working for The Hershey Company from January to June of 2021, she noted that COVID-19 had not been a direct reason the company was looking to automate, but rather, automation is an area that is constantly considered as companies seek to evolve and improve.
While labor constraints were a pressing issue amid COVID-19, automation did not spike as greatly as many assume. Ultimately, automation can serve to mitigate costs and increase efficiency; however, the need for human labor prevails as a vital contributor to manufacturing success.
“Manufacturing Trends: Coronavirus Impact on Manufacturing Industry.” Bank of America, www.bofaml.com/en-us/content/coronavirus-impact-on-manufacturing-industry.html.
Dr. Robert Novack – Supply Chain Professor, The Pennsylvania State University
Ally Simon – Industrial Engineering Student at West Virginia University
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