The new DEED grant aims to help manufacturers in labor distress hire more robots into their companies.
Central McGowan Vice President and General Manager of Automation Pete Rogers said that the implementation of automation is undergoing a significant transformation; Previously, large manufacturers had the resources to automate, but that has migrated to smaller facilities. For example, Central McGowan provided automation to a husband and wife team whose first employee was a robot.
“It’s shifting to smaller businesses, because a lot of it is like automation or die,” Rogers said.
These types of companies are the focus of the new DEED Automation Loan Program announced November 29. DEED Commissioner Steve Grove said the program will use $12.5 million in funds provided by the federal government to invest in small and medium-sized manufacturers. The ability to acquire bots. Grove said automation is fast becoming one of the most important solutions to the struggles of the national workforce.
“At the end of the day, you can’t create a workforce out of thin air,” Grove said. “You should be able to automate much more quickly than you have in the past.”
This is particularly impactful in central Minnesota, where manufacturing is the second largest industry and employs about 40,000 people.
“Automation in those small plants is an answer for them who are struggling so hard because of this employee’s lack of ability to fix their production needs and keep the doors open,” Rogers said. “And frankly, that helps with production costs, too.”
The company purchased a new modular lift station that allowed the company to redesign its store floor, creating more efficiencies by keeping all products in one place instead of scattering them around the store, said Mike Noelting, co-owner of SNX Technologies.
“They don’t chase their tail at all,” he said.
SNX Technologies in Sauk Rapids builds semi-automatic edge banding that applies rubber trim along the edges of table and other products. Between SNX Technologies and SNX Precision, the company employs 15 people, says Chief Financial Officer Nancy Kirshner.
Noelting said the addition of the modular lift system is part of an effort to make the store experience a good one to attract employees.
The new system also contributed to SNX’s ability to assign a new job: an assembler who would float around the store floor and release existing employees to focus on other priorities, such as research and development.
Automation as a tool to address workforce shortages, Rogers said, is less about job replacement in number than in type. The conversation about automation in manufacturers is still about making sure that human workers are in jobs that need a human being, and that robots or automated systems handle the more monotonous or dangerous jobs.
What has changed, Rogers said, is the financial attitude toward automation. A few years ago, companies wanted to have a short ROI (Return on Investment) window, usually around two years. Now, companies are buying automation with a five- to seven-year return on investment, either because they’re buying automation or their products aren’t made, Rogers said.
“The important thing now is that there are so many business opportunities, they just need to invest faster than they would have done in the past,” Rogers said.
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