In a recent fabrinomic Fabricators & Manufacturers Association newsletter Chris Kuehl, economic analyst, discussed the dichotomy of the summer economy. He cited a UBS survey of investors and business owners on how they are preparing for the next recession, regardless of when it happens.
“Nearly all of these respondents said they avoided layoffs,” Kuehl wrote, “because they fear they could not replace those they would lay off.”
People might think we are on the verge of a recession, but outside of a few isolated sectors, hiring remains strong and layoffs are not widespread. One of the reasons behind this could be about people. Employers have struggled to find good people, and they don’t want to lose them now, especially in these unprecedented times. Supply, not demand, is the problem. Demand hasn’t diminished and companies want the right people in place to meet that demand when supply issues eventually abate.
Many busy manufacturing stores, beneficiaries of relocation and a national supply chain overhaul, couldn’t imagine laying people off now. That said, in the next downturn, layoffs might not be as widespread. Part of that has to do with demographics. Baby boomers are retiring, leaving a big experience gap, especially in areas of manufacturing that saw serious declines due to globalization in the 1980s and 1990s. Many stores simply don’t have not as many employees between aging baby boomers and relatively inexperienced millennials.
Metal fabrication presents another complication: it is a group of manufacturing processes, not a well-defined industry, and the specifics of these processes change with the products being built. Basically, this business requires a mix of people who think about work in different ways. I tend to group them into two categories: system thinkers and technical thinkers.
We tackle the jobs that other stores shy away from. Hearing this tells me that technical thinkers are a driving force in a store. I remember a shop supervisor showing me an unusual piece of stainless steel that had formed on the press brake. Some features made conventional setups impractical; it all depended on how the operator sequenced the incremental turns, combined with unique gauging strategies. Supervisor and operator worked together, experimented with different bend sequences and gauging strategies, then congratulated each other when they found a solution. “These are the fun days,” the supervisor told me.
There is a huge market for technical thinkers. There are still many specialized products that are difficult to manufacture, and no amount of design change would change that. On top of that, manufacturing lacks engineers familiar with sheet metal. In a purely rational marketplace, with no silos, fiefdoms, or cumbersome bureaucracies that make change difficult, design for manufacturability (DFM) would be more pervasive. But the market isn’t always rational, and the engineering shortage is real, so a fab shop’s technical thinker is there to save the day.
These people are complemented by systems thinkers. They love engineering problems and think about workflow and the ripple effects that technical challenges create. They might see that same supervisor and operator slap each other and sigh in relief; they see it as a problem overcome and, in fact, something to be avoided in the future, given the ripple effects and bottlenecks created by people working in front of the machine. The store makes money when products are shipped, not when people experiment in front of a machine to make the unmanufacturable manufacturable.
The systems thinker values long-term customer relationships based on reliability and on-time delivery. The technical thinker values those same customer relationships, but for a different reason; they help customers by making the seemingly impossible possible.
I see technical thinkers and system thinkers as the yin and yang of metal fabrication, and finding the right balance is what really shapes a metal fabrication business. When a manufacturer has the right mix, technology and automation amplify operational forces. Suppose a manufacturer invests in an automatic tool change press brake to switch between complex jobs frequently. It’s all about flexibility, the ability to jump into production and shift gears in the blink of an eye. It is not a band-aid that covers a lack of knowledge and skills.
An operation dominated by technical thinkers could suffer from organizational chaos. They thrive on making the impossible possible, but sustaining chaos over the long term isn’t easy. The environment overwhelms people, so they leave in frustration.
An operation dominated by systems thinkers could avoid hard (and profitable) work. Worse still, they might treat traders like mere pawns, there to be manipulated as part of a larger strategy. Operators just become another hot body, there to produce but not to think. When the workshop automates, they plant a hot body in front of the machine. This hot body presses buttons to, say, start an automated tool change, but they really don’t know how and why the automation does what it does. They are there to collect a salary.
When a store has the right mix of people, everything clicks into place, manufacturing technology amplifies everyone’s strengths, and talented people stick around for decades. The perfect blend can be extraordinarily difficult to achieve. That’s why, in the face of inflation and economic uncertainty, the most competitive manufacturers aren’t about to let people go. The elusive “perfect mix” is also why finding the right people forever remains at the top of industry challenges. Without the right people, everything else becomes a struggle.