Automation to Address Labor Challenges and Improve Profitability

By Dan Marx

The following article was originally published by Printing Impressions. To read more of their content, subscribe to their newsletter, Today on PIWorld.

Both the challenges of acquiring qualified people, and the cost of compensating them competitively, weigh heavily on today’s print service providers (PSPs). As a result, many companies have turned to automation to maximize the teams they have — doing more business without raising headcounts — while maintaining profitability. Increasingly, automation is not an option for PSPs, but a necessity.

The use of the pulley has been automating work since the time of ancient Egypt. | Credit: Pixabay/Taken

Consider the pulley, an automation tool that has, since the time of ancient Egypt, served to make moving or lifting things easier and more efficient. With the use of a pulley, and then systems of pulleys, a single laborer was able to perform tasks with greater ease, work faster, and do so more consistently for a longer period of time. With this intervention in place, one person could do the work of two or more — resulting in gains in productivity. This pulley and the results of its use are not so different from the interventions we make today. Our tools are just more complex.

Framing the Labor/Automation Challenge

According to the PRINTING United Alliance State of the Industry Report for the third quarter of 2023, two-thirds of PSPs are seeking to maintain profitability in their operations. Within that broader challenge is the finding that 55% see rising labor costs as a major concern. To address the increased cost of labor, companies must get more revenue-generating work done while minimizing their reliance on skilled labor. And amid higher labor costs — and the challenge of finding capable workers — automation becomes a wise investment.

Because finding capable workers remains a challenge, automation has become a wise investment. | Credit: HEIDELBERG USA

To maintain the profitability of their operations, and amid pushback on higher prices by customers, savings must be gained. Enter automation.

The goal of automation is not just about labor. Data gleaned from the Alliance survey showed that more than half (54%) are seeking to increase productivity through capital investments that support automation. For PSPs, opportunities to automate processes exist across the operation: in the front office, in sales, prepress, the press room, finishing, and shipping. It may involve equipment updates, mechanical systems, software, and even work practices. Increasingly, it also takes the guise of automated ordering through customer portals and online storefronts.

The Alliance survey also showed that during 2024, more than 60% of PSPs are seeking to manage their operations more effectively and “keep a closer eye on things.” This means exploring better process control. Many modern automation solutions are digitally driven, as compared to the purely mechanical solutions of the last century. Because of that, these systems produce data — lots of it. Building on the adage coined by Peter Drucker, “You can’t manage what you can’t measure,” PSPs are increasingly digging through data, identifying lost time, inefficiencies, waste, downtime, and more, to extract as many productive seconds as possible out of each production hour. Creating efficient ways to collect and synthesize this data should be seen as another strong automation opportunity.

Digitally Driven Systems and AI

Automation isn’t only about changes to the myriad systems on the production floor. The Alliance survey showed that of those companies seeking to make capital investments during 2024, one notable commonality was that they are seeking workflow software, e-commerce solutions, intelligence — software systems that can both ease and speed production, as well as minimize human time spent doing repetitive tasks and enabling or amplifying the ability to do other tasks.

Just as the concept of automation has been transformed from purely mechanical systems to those enhanced by digital systems, another profound change is the recent and rapid advance of artificial intelligence (AI). According to the results of the Alliance’s Print Business Outlook Series, Fall 2023 report, “AI can automate activities that could never have been automated before; enhance mission-critical functions such as analysis of target markets, customer preferences, and the customer experience; and support superior decisions companywide.” That report urges PSPs to begin now to identify and evaluate AI applications and train employees to use and “think” AI.

Multiple Motivations at Play

While the goal of this article is to explain how (and why) PSPs are using automation to address labor challenges, a deeper motivation exists: the quest for profitability. In a series of data-informed “Must Do’s” for the printing industry, Andy Paparozzi, chief economist at PRINTING United Alliance, said PSPs must have an “all-out, companywide focus on productivity,” of which addressing labor cost is just one part. To focus only on labor cost, however, is to see only part of the solution. Labor can be replaced through automation, sure. It can also be changed, automated, and redesigned. Similarly, automation is more than a replacement for labor. It can also augment, enable, and transform. It can make work different, better, even more valuable.

Advances in technology help drive automation and ease some of the pressures felt by rising labor costs. | Credit: Pixabay/Jarmoluk

The Balance of Automation Efforts

Ultimately, the quest for automation is about meeting the production and profitability needs of the business. Well-addressed, thoughtfully implemented automation efforts should bring many advantages in labor (number of people needed, the amount of work a single worker can reasonably perform within a shift, work that is meaningful and more satisfying), just as it should bring benefits in productivity, quality, and speed to deliver products as specified.

While a focus on labor is “top of mind” for many PSPs today, it is important to not miss out on the broader opportunities and benefits automation can provide. A strong focus on profitability — the overarching goal of all automation efforts — is perhaps a stronger focus for the long term.

Mini Segments on Automation

Training Eases Production:

While many business owners see adding automation as an exercise in capital investment, Matt Marzullo, president of Ironmark, based in Annapolis Junction, Maryland, says success comes from taking it a step further. “You can’t just bring young people in and expect them to figure it out,” he says. “You really have to teach them to be good employees.” While training, mentoring, and workforce development are not the key focus of this article, they are essential ingredients for the success of automated production.

Seeking Quality Control:

In the functional/industrial printing sector, Ray Greenwood, process improvement consultant at HPCI, in Oklahoma City, Oklahoma, says the ability to find and train good employees is but one factor leading producers to explore automation options. For instance in the printed electronics industry, steps are taken to eliminate physical, human touches of materials during production, he says. Further, many are “installing camera systems to add greater certainty to production.”

Lightening the Labor Load:

According to Natalie Ross, senior director of enterprise solutions at Phoenix, Arizona’s O’Neil Printing, the company’s online storefront system has changed the “labor load” on internal account managers because some customers “are ordering straight through.” Instead of receiving multiple touches by multiple employees, she says some jobs are touched by only one person. “We have a small team,” she says, “and there is less touch involved. That’s the way our business is trending.” Ross adds that, with automation, the company is better able to scale.

Labor Dollars Better Spent:

Keith Miller, president and CEO at Strategic Factory, based in Owings Mills, Maryland, says his company is working to become more efficient by “getting faster and minimizing labor wherever we can.” By eliminating process touches, improving accuracy, and increasing the speed of order processing, he says, the company has reduced labor on the front end, and become more profitable on the back end. This effort, he adds, “has shifted payroll dollars from production to product development.”

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Dan Marx, Content Director for Wide-Format Impressions, holds extensive knowledge of the graphic communications industry, resulting from his more than three decades working closely with business owners, equipment and materials developers, and thought leaders.