"Labor certainly is our biggest cost," noted Billy Yeary, plant manager at Prime Pak Foods in Gainesville, Ga., which makes chicken, beef and pork patties. While he admits his workforce has been pretty stable, "Competition in this business makes us always look for less expensive ways to manufacture. Our process is very labor-intensive. So we need to find efficiencies, and often that means automation."
In adjoining Alabama, the problem is finding "barely acceptable" employees who will even show up for work consistently, according to the general manager of a bottling company. "This area has never put a value on education, and it shows in the kinds of employees we see. Most don't really want to work. Every morning on my way in, I have heartburn because I know somebody's either not done what they're supposed to be doing or they won't even show up for work today â€¦ or a good one will quit."
Like Blackburn's experience, this food executive finds his better employees being pirated by other companies; but in this case, they are nearby defense contractors who can afford to pay more because of the war in Iraq. "They've got the money now," he said.
His comments were echoed in upstate New York. "We pay on a par with other food processors, and most of us are not unionized," said a manager at a frozen food company. "But this is an older industrial area, and the other industries that are left here are unionized and pay more."
Of course, unions are a double-edged sword. "We have some good skilled people because we're unionized and we pay well. The new hires we get, for instance, are top-notch," said a manager at a California beverage processor. "But we're the only union facility [in our niche], so that puts us at a disadvantage because of our labor costs. We also have higher benefits costs and carry a significantly greater headcount than a comparable nonunion plant."
He also noted California's "liberal" Family Medical Leave Act makes it too easy for employees to take time off. When we contacted him, the manager was preparing for a strike he felt was likely.
Automation has come in third every year of this survey, this year at 20 percent, down 2 percentage points from last year. For the first time, respondents said their production sections were more automated than their packaging sections (though only by 1.5 percent), with the entire plant, entire production line and logistics/warehousing all coming in at about 10.5 percent. Sixty-five percent are automating with programmable logic controllers, nearly double the next closest answer: custom software.
Although plant security and energy issues came in next with 17 and 16 percent of the "most important issue" votes, respectively, those and logistics and engineering issues all had similar aggregate scores. Only consolidation challenges came in far behind the pack.
Thirty-eight percent said they are conducting energy audits.
Allergens are an annual concern. "With the new legislation, allergen concerns look like they will be our big concern for the year," wrote one respondent. "We are focusing this year on allergens through changeover procedures, sanitation, and production sequencing," wrote a plant executive at a California processor.
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