Labor lite

Labor productivity has been a hot topic that we have focused on here at DWCM since we started this site well over a year ago.  In one of the local business papers that I receive each week Crain's Detroit, they featured a small enterprise here in metro Detroit that is making it's mark in part due to increased machine efficiency resulting in the need for less people.

When most people think of mass productivity improvements they likely think of big Fortune 500 and multinational companies who are force behind this C-change.  But more and more smaller companies are getting in on the act as well.  Most are driven by a need to compete with cheap overseas labor but to also boost it's own bottom lines.  As the cost of labor rises around the globe especially in China, it has helped spurned a manufacturing renascence in US manufacturing with companies finding new ways to complete.

See full story here by Dustin Walsh of Crain's Detroit

• At Prism Plastics LLC in Chesterfield Township, a mere three employees per shift work the 26,000-square-foot factory, programming machines and packing boxes. The plastic injection molding supplier produces 500 million parts across its four plants and 28 molding machines. The machines need no sleep, coffee breaks or vacations. They work three shifts, 24 hours a day, seven days a week. And with just 58 total employees, Prism is the model of modern manufacturing -- fewer humans, more machines, higher efficiency, increased productivity. 
• Over the past year, manufacturing productivity increased 2.9 percent as output increased 5.5 percent, the U.S. Bureau of Labor Statistics reported this month. 
• In the world of economics and labor statistics, higher productivity translates into a reduction in hiring. Nationally, the automotive industry employs 780,700, down from more than 1.2 million in 2002. Michigan's auto employment is down to nearly 96,200 from more than 190,000 a decade ago. 
• The reduced workforce has paid off for Prism, which also has plants in Port Huron and Harlingen, Texas. Revenue has grown from $5 million in 2009 to $12 million in 2011, with projections of $18 million this year and $22 million in 2013. 
• For the Southeast Michigan workforce, supply chain efficiency means average hourly earnings in the automotive supply base are down to the lowest point in years. The average hourly earnings in the supply base were $19.68 in July, down from $19.80 in 2002 and $21.32 in 2006. 
• To expand its Chesterfield plant, Prism took out a $2.5 million line of credit, purchasing six Toshiba molding machines, valued at about $500,000 each. 
• "These jobs are good jobs, and they don't need a four-year degree," he said. "But these jobs require more skill, and I see us (the auto industry) moving to a more skilled workforce."