Navigating Labor Shortages in Manufacturing and Extrusion: A Critical Challenge

February 14, 2024

In recent years, the manufacturing industry has faced a significant challenge that has reverberated across the global supply chain – labor shortages. As the backbone of many economies, the manufacturing sector’s health is crucial, and the current lack of skilled workers poses a formidable obstacle to its growth. The plastics industry is no different.

According to the National Association of Manufacturers (NAM), the manufacturing industry in the United States has been grappling with a shortage of skilled labor, hindering its ability to meet growing demands. The NAM highlights several factors contributing to this issue, including an aging workforce, insufficient training programs, and a negative perception of manufacturing careers among younger generations. The ripple effect of these challenges is felt regarding production delays and the potential stifling of innovation within the sector.

https://nam.org/2-1-million-manufacturing-jobs-could-go-unfilled-by-2030-13743/

The Bureau of Labor Statistics (BLS) further supports these claims, reporting that the manufacturing sector experienced a decline in employment despite increasing product demand. This paradoxical situation can be attributed to the shortage of workers with the necessary skills to operate advanced machinery and adapt to the evolving technological landscape. While the labor shortage shows signs of abating, Plastic News’s Eonomic Editor Bill Wood still thinks we have a long way to go, “I could never have imagined a scenario in which a year-over-year decline of 17 percent in the total number of openings would one day actually be considered a good thing.”

https://www.plasticsnews.com/news/data-shows-inflation-easing-plastics-chronic-labor-shortage-abating

There are multiple steps that stakeholders can take to address labor shortages: training and education programs, government support, innovative technologies, and process optimization.

We will focus on a specific customer case study where we were able to support increasing labor concerns directly through innovative extrusion technologies. This project aimed to improve profitability through higher throughput and lower scrap, with no headcount or floor space increase.

Customer: Unnamed company due to confidentiality concerns*.

Industry: Sheet Extrusion, Thermoforming for high volume custom food containers for fast/casual take-out food.

Existing Equipment:

–  Inline extrusion system (circa 1990) of PET and PP sheet from a 4.5” extruder fed directly into a 40” thermoformer
–  One of multiple similar lines throughout the organization
–  Equipment sized for market needs in 1990, roughly 1500 lb/hr gross extruded throughput
–  Equipment using outdated controls
–  Manual screen changers

Issues:

–  Frequent downtime – in addition to normal unplanned downtime, scrap or downtime was built-in for screen changes, as post-consumer regrinds were introduced and needed routine screen changes, roughly 30 minutes per shift of scrap
–  Manual operation – one person per shift running the extruder, with 3-4 people running the downstream process, including inspection and material handling – 0.0033 FTE/lb of the extruded product (303 lb/hr/ee)
–  Filling 3+ shifts (24/6 schedule) with qualified people proved difficult

Investment:

New 6” sheet extruder, with automatic screen changers and New 50” thermoformer

–   Moved from 1500 lb/hr gross to 3000 lb/hr gross, with the same relative growth on parts production (using PET/RPET sheet assumptions)
–  Automated part handling and carton take-out process with robotics and conveyors
–  Total investment in new equipment, net of resale of old equipment, ~$3.5M
–  Machinery was designed to fit within the same “bay” so that no new brick-and-mortar costs

Benefits:

Labor

–  The same four employees running the extruder and thermoformer but at double the output
–  Part and carton handling automation reduced material handling to 1 employee per 4 machines, or 0.25 ee per line
–  Total of 4.25 ee to run line, or 0.0014 FTE/lb (or 706 lbs/hr/ee)

Uptime

–  Decrease of unplanned downtime due to new equipment of roughly 1 hour per 24-hour day
–  Elimination of non-productive runtime, ie. Running scrap of 30 minutes per shift, or 1.5 hours per 24-hour day

Throughput

–  Double the throughput by increasing the size of the equipment
–  Running good product during screen changes
–  With standard assumptions about built-in process scrap, downtime, etc., these benefits roughly increase from 14,000 quality-converted pounds per day to 29,700 quality-converted pounds per day. More than doubling the throughput.

o   Using very broad financial assumptions, the added throughput benefits over $1,500,000 in added finished product profitability per year.
o   The waste reduction directly results in $750,000 of reduced material cost per year.
o   These results are seen with NO increase in labor dollars.

Recycling

–  With the introduction of a high-quality screen changer and a larger extrusion system explicitly designed for high volumes of regrinds, the line can run up to 90% recycled material, which was limited to running roughly 50% in the previous arrangement.

As you can see in this case study, our client could more than double the throughput of a single bay while reducing the total labor assigned to a single line. This cost savings and additional efficiency allowed them to manage better the workforce and labor needed while improving their competitive advantage in a crowded market space.

In conclusion, manufacturers can overcome labor and floorspace hurdles through strategic collaborations, investment in new equipment, and embracing technological advancements that pave the way for a sustainable and thriving future. As we navigate these challenges, all stakeholders must work together in building a skilled and resilient manufacturing workforce.

* Some details have been changed to keep anonymity. Financial assumptions are based on general market knowledge and are not specific to any company/application.