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August Roundup: Manufacturing, Warehousing and Productivity

What does the manufacturing economy look like today and moving forward?

Morning coffee with Cisco-Eagle photo
Our monthly dive into the best manufacturing, distribution, warehousing, automation and storage topics content we’ve seen. This time, we look at the manufacturing economy today and moving forward, along with safety news from NIOSH, cold storage, the CHIPS bill and continued growth in the warehousing sector.

Monthly economic report

From: National Association of Manufacturers

Manufacturing continued to add jobs as we move into more uncertain economic waters, both in the broad economy and the manufacturing sector. Whatever your take on the intermediate future of our economy, manufacturing seems to be looking at a mix of increasing employment, labor shortages (what else is new?), higher costs and durable demand.

The takeaways:

  • Manufacturing employment is skyrocketing: It jumped 30,000 in July. Year-to-date, manufacturing has added 271,000+ jobs, compared to 365,000 in all of 2021. This is the sector’s best performance since the Clinton Administration. Workers are earning more, too. Their wages increased 0.3%, a 5% increase over 12 months. Given the inflation of the day, that’s not surprising. Overall, America added over half a million nonfarm jobs in July and has a labor participation rate lower than pre-pandemic levels.
  • The sector still needs more people: There are almost 800,000 job openings in the sector. That’s actually a little lower than the yearly average of 865,000. Manufacturers aren’t alone in their quest for employees, as there are 10.7 million unfilled jobs in the United States with only 5.3 million unemployed Americans to fill them.
  • Orders and demand continue to climb: We saw new orders for manufactured goods jump 2%, to a record $555 million in June. Core capital goods spending rose 0.7% to another record–$74 billion–in June. This number has risen 8.6% over the last year alone. Factory orders continue to underline a resilient economy in the face of inflation, supply chain issues, limited employee availability and a potential recession.
  • Manufacturing activity expansion was slower: The Manufacturing Purchase Manager’s Index slipped to 52.8 in July. Even with slowing growth, costs are still rising.

Read the rest from NAM, with plenty more details.

NIOSH: Lockout/tagout should be inspected

From: Safety & Health Magazine

The National Institute for Occupational Safety & Health (NIOSH) wants you to inspect your lockout-tagout processes–which is a great idea, governmental guidance aside. Since failure to adhere to lockout-tagout is always a top-10 OSHA violation, it makes even more sense. Plenty of machinery that requires maintenance, service or inspection is perfectly safe as long as it’s locked out while people are working among gears and moving parts. In 2021 alone, OSHA cited over 1,600 violations.

Maintenance on a conveyor line.

The takeaways:

  • Document your lockout-tagout process. Include written “energy controls” factors, scope, intentions, authorized personnel, specific methods and other factors.
  • Inspect the process at least twice a year. This helps ensure people understand and are prompted to think about the right way to do things. It’s always tempting for people to do the unsafe thing because it’s faster and easier. Enough of those types of behavior eventually end up in an accident.
  • Demonstrate the procedures. For conveyors, that inspection should include all processes that require someone to engage the rollers, reducers, motors, gears, belts or other moving parts. The demonstrations are key: show people what you require for any process that puts them at risk.
  • Inspectors should be authorized for lockout-tagout and know the processes by heart. They shouldn’t implement it. They’re there to observe the procedure and evaluate the ways it is being implemented.
  • What happens when the process deviates? It’s time to retrain the employee and document the situation. If you have repetitive violators, address them more robustly.

These steps help document your compliance with regulatory guidelines, but more importantly: they reduce the chances of injuries and damage.

Read more: Cisco-Eagle’s Tim Harris elaborates: “We don’t do anything to a conveyor while it’s running. I mean anything at all. We won’t do it, even if it seems safe. You have to lock the circuit breakers out, disconnect the the switch and throw a padlock on before you touch a tool…You just don’t reach into a conveyor, under it or anywhere else until it’s locked out.”

 Steel King discusses cold chain storage

Cold storage room with pallet racks lining the walls

Above: Cold storage room with selective racks lining the walls. This configuration allows easy access to all pallets all of the time, but reduces storage density. Ideally, you should mix various types of storage equipment, loads and areas in direct-to-consumer grocery distribution operations.

Everything in the world is connected, and the ways people order groceries are one of the most fundamental supply chains. In our household, grocery deliveries were becoming the norm before the Covid-19 pandemic, and have completely become so ever since. As Steel King writes here, that’s been a normal trend: pre-pandemic, about 4% of consumers did their grocery shopping online. That skyrocketed to 60% during its pandemic heights. That percentage dropped, but is on its way back to the 20% range by 2026. Consumers like the convenience and are willing to pay the price for it.

In fact, most any grocery store you visit these days has the hallmarks of a small distribution center. Most offer shopping services, which involve order pickers and specialized carts walking store aisles with everyday shoppers.

The takeaways

  • Grocery chains have “last mile” solutions in place, with their existing brick & mortar outlets.
  • Grocers find it much easier to shop, store and handle dry goods like crackers, cereal or bags of rice than they do refrigerated or frozen foods.
  • It’s harder to deal with those cold-storage items. The cost per square foot for storing racked products in the cold is roughly three times more expensive than storing dry goods.
  • Storage density and smart planning is the critical factor for these operations. Grocers need ample access, which can conflict with space efficiency. They also need inventory rotation that ensures fresh product is always pushed to the forefront, efficient forklift routing and high throughput. All of this is achievable, of course, with the right rack systems, processes and layouts.

Read more: Zero Mountain Optimizes Frozen Storage in Irregular Space

More of interest this month:

Scott Stone is Cisco-Eagle's Vice President of Marketing with more than thirty years of experience in material handling, warehousing and industrial operations. His work is published in multiple industry journals an websites on a variety of warehousing topics. He writes about automation, warehousing, safety, manufacturing and other areas of concern for industrial operations and those who operate them.

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