For Springfield-region manufacturers, 2023 was defined by supply-chain disruptions and workforce shortages. Next year, it's all about automation and artificial intelligence.
Producers are using AI and automation to retain employees, increase job satisfaction, give customers more choice and grow efficiencies. That's the takeaway from the 2023 Manufacturing Outlook, hosted by the Springfield Area Chamber of Commerce Dec. 6. at the White River Conference Center.
The past five years has been a wild ride for regional manufacturers, like Vital Farms, Inc., DT Engineering and Ozarks Coca-Cola/Dr Pepper Bottling Co., as producers dealt with surging material costs as the COVID-19 pandemic shuttered supply chains and magnified a national labor shortage.
The start of 2024 poses new problems, as manufacturing employment has risen to levels not seen since the Great Recession and producers grapple with finding the best ways to lean into automation and introduce new technologies, like artificial intelligence.
“The mantra at Mostly Serious is we are either going to ride the wave of AI or we risk getting crushed by it,” said Jarad Johnson, founder and CEO of Mostly Serious, a full-service digital agency that works with some manufacturers to build websites and embrace AI in operations. Johnson was one of the panel members who discussed automation and AI trends.
2023 automation ramp-up
The labor shortage of 2023 will have lasting effects on the Springfield manufacturing industry for years to come. Without enough hands to get everything done on the production floor, companies turned to automation at an increasing rate, sometimes an alarming one, said Robert Randolph, executive director at the Ozarks Technical Community College's Center for Advanced Manufacturing.
Companies are “implementing new technologies a little faster than they would like to be doing simply because they cannot find enough people to do those jobs,” said Randolph, one of the panel speakers at the event, which had more than 400 people in attendance.
In 2022, manufacturing accounted for about 15 percent of U.S. economic output—the highest percentage of any industry subsector, according to the U.S. Bureau of Labor Statistics. After the fallout of the COVID-19 pandemic, U.S. manufacturing employment has surged to levels not seen since the late-2000s.
Manufacturing accounted for 11% of the Springfield-region's gross domestic product in 2022, according to data from JobsEQ highlighted by the Chamber during the event. There are 705 operating manufacturers in the region with nearly 27,000 employees.
Vital Farms has grown rapidly in the six years it's been in Springfield. The company started off in a 85,000-square-foot facility, but it wasn't enough space, so it quickly moved to a spot in the Springfield Underground with roughly double the capacity, Carl Kicklighter, director of plant operations for Vital Farms, said at the event.
Vital Farms processes 6 million eggs a day and heavily relies on automation and robotic programs. The ramp up in these technologies may have been too fast, Kicklighter said.
"We're kind of getting pushed outside of our comfort zone at the rate we introduced these technologies," Kicklighter said.
Manufacturers like Vital will focus on balancing labor and automation in 2024, Kicklighter said.
'Co-bot,' not robot
The goal of automation should not be to replace jobs, but to replace tasks, Kicklighter said. Vital is trying to use automation to eliminate mundane tasks and increase its employees' job satisfaction. Instead of robots, think "co-bots," he said.
"What are the tasks that nobody wants to do and can we automate them?" Kicklighter said. "We've really been trying to leverage automation to just create better jobs in this sector, better working environments."
Ozarks Coca-Cola/Dr Pepper Bottling Co. implemented automation at its plant to get rid of the most labor-intensive jobs, said Vice President and Chairman Sally Hargis.
"The most difficult physical jobs are in our warehouses," said Hargis, who was a panel member at the event. "Automating our warehouses will relieve, for the most part, a lot of that physical work."
Automation in the bottling plant "will make those jobs more desirable" and "a lot easier to retain," Hargis said.
More choices means less warehouse space
For the bottling company, consumers are demanding more choices in products, Hargis said. This has resulted in warehouses that are "bursting at the seams" with all different types of drink products, she said.
"Consumer trends, obviously, are changing," Hargis said. "Consumers want choice and that has stretched the limits of all of our warehouses."
Ozarks Coca-Cola/Dr Pepper Bottling Company will use scanners in its warehouse blending operations in 2024, Hargis said. The warehouse automation will cost about $30 million, she said.
On top of making employees happier by eliminating some of the toughest physical jobs in the warehouse, the scanners will help make the warehouse more space-efficient. The $30 million investment will help prevent otherwise necessary warehouse expansions, Hargis said.
The investment in automation will not result in job cuts, she said.
"We don't plan to replace any jobs," Hargis said. "We just plan to keep the people that we have in those jobs longer and be more efficient at doing that. Those automation services will help us eliminate human error and make the folks doing those jobs more accountable."
AI in the workplace
The biggest benefit to embracing generative AI, which has become popular recently due to programs like ChatGPT, in the workplace is to get rid of some of the mundane, repetitive work humans don't enjoy, Johnson said. He adds there are two ways manufacturers are incorporating it into day-to-day operations.
"One path is the creation of custom products that they can use internally that are fine-tuned or tailored to their organization," Johnson said.
For example, Mostly Serious is in the process of building a human resources onboarding tool using generative AI, Johnson said. A new hire will go through the onboarding process while chatting with an AI program tailored to the specific organization using it.
The program will eliminate the back-and-forth between new hires and a company's human resources representative, Johnson said. A new hire's questions are answered directly by AI that has been taught the company's policies. The AI program will be able to answer the new hire's questions and will provide more information as needed.
"We're saving the time on the [human resources] side by not having to deal with all of these questions back and forth," Johnson said. "That's a very practical application that is getting easier and easier to build."
Because custom AI programs are tailored-made to a company, they are expensive to build, Johnson said. The cost is the biggest reason more companies aren't developing such tools.
Complacency stifles adaptation in manufacturing world
Johnson calls the second way companies are using AI the "lets-just-use-what's-there approach," he said.
"One of the things I push for is don't just train employees on how to use AI internally, but train them how to use it in their personal lives," Johnson said. "By using it in their personal lives, they'll understand how to use it in the workforce more."
As an example of the second approach, Johnson said he uses ChatGPT to create bedtime stories with his nine-year-old daughter. Father and daughter give the program a few inputs, like a setting for the story and some objects, and the program writes a story for them to read together.
"Last night it was Ariana Grande in a coffee shop with...a magical microphone," Johnson said.
By giving employees freedom to explore the tool in the personal lives, companies will get on the leading edge of defining how AI can further be used as a tool in their future.
With a subscription to ChatGPT Plus costing $20 per month, the cost-barrier to entry is low, Johnson said.
"What we can do is we can hand our employees these tools and then we can figure out from them how to innovate our businesses just by watching how they're using the tools," Johnson said.
The downside to AI
There are still areas where generative AI won't work for manufacturers, Johnson said. Most notably, in predicting the future, he said.
"You don't want the AI making all the strategic decisions or thinking too far into the future, because it doesn't know anything about the future," Johnson said.
Generative AI is built on probability engines of what happened in the past. The accuracy of the results generative AI produces are also questionable, Johnson said. If the program doesn't know an answer, it is likely to give an answer that isn't truthful.
"These tools [can] hallucinate...which means they just make shit up," Johnson said. "If it doesn't know how to answer your questions, it just says something."
Because the use of generative AI is growing so rapidly, companies need to stay up to date or they risk being left behind, Johnson said.
"[AI] will be radically different by the end of next year," Johnson said. "It will probably be radically different in the next three to six months."
Manufacturers need to turn to AI just as they have embraced automation, Johnson said.
"The conversation can be very similar in approach with AI that it has been with robotics and automation," Johnson said.
"Will (AI) replace jobs one day? Yea, eventually one day, but right now it’s a great tool, a great asset that can help us become more efficient with our jobs. It’s going to enhance jobs and it’s going to create new jobs as well."
