The decreasing birthrate and aging population are predicted to further reduce the size of the domestic workforce. This could significantly restructure businesses across multiple industries. Companies will confront a range of human resource challenges, including labor scarcity, acquiring top talent, technology transfer, and increasing labor expenses. Manufacturing Digital Transformation can address these challenges efficiently by saving labor costs.

In this column, we will explain what manpower reduction is and the key points in promoting manpower reduction, including specific examples. Those in charge of manufacturing operations, such as factories, who are facing labor shortages and other issues should refer to this column.

Reducing manpower

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Reducing Manpower

“Manpower saving” refers to the use of fewer workers to perform the same manufacturing process or work steps. The history of labor-saving dates to the 1950s, when it was first recognized in the steel industry, etc. In the 1960s, ICs were incorporated into machine tools, and industrial robots were developed. Particularly in the automotive industry, production lines were developed with the clear goal of reducing manpower.
Later, robots and machine tools became more sophisticated with the advancement of digital technology. In recent years, the latest technologies such as AI have begun to be implemented at production sites, further promoting manpower saving.

Difference between Manpower Saving and Man labor Saving

When promoting manpower saving, it is important to note the difference between “man labor saving” and “manpower saving”. Labor saving means reducing the workload of each worker. Labor saving may improve quality, safety, and reduce worker turnover, but it alone may not lead to cost reductions.
For example, a 5% labor reduction in a 10-person operation will reduce the workload but will not reduce the number of workers. To reduce labor costs through labor savings, it is necessary to reduce labor by 10% or more to reduce the workload for one person and even lead to labor savings.

The concept of efficiency and fewer people

A similar term, “efficiency improvement,” is also frequently used. This is a productivity evaluation from a broader perspective, and labor saving and power saving can be considered as a type of efficiency improvement. There is also the concept of “manpower reduction,” which is a further development of manpower saving.
Reducing manpower means “dynamically allocating workers so that they are optimally suited to each change in production volume. This allows production to be carried out at the minimum necessary personnel cost while responding to fluctuating production demand.

Why is manpower saving required in factories?

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The following are some of the reasons why factories and other production sites require manpower savings.

Resolving Labor Shortages

As is well known, the labor shortage in the manufacturing industry is becoming serious every year and is expected to accelerate further in the future. In addition to general workers, the shortage of excellent technicians is particularly noticeable. A vicious cycle has emerged in which the burden is concentrated on superior personnel, resulting in a lower retention rate of human resources. Labor saving is expected to be a solution to this problem of human resource shortage.

Curbing labor costs

Labor cost can be reduced by using fewer workers to perform the same manufacturing process. If costs can be reduced by controlling labor costs, the cost competitiveness of products can be improved, and the surplus funds can be used for new investments.

Productivity Improvement

Introducing new production equipment to reduce labor costs improves the productivity of the entire manufacturing process. Furthermore, once the latest equipment has been introduced, it is possible to improve productivity with capital investment alone, without increasing the number of new personnel, making it easier to plan for medium- to long-term production increases.

Promotion of work style reform

Increased productivity through labor savings leads to a reduction in the workload. In addition, automation reduces hazardous work and work under poor conditions. Moreover, increased efficiency reduces overtime work and makes it easier to take annual paid leave and childcare leave, thereby promoting work style reforms.

Elimination of Technology and Skills Transfer Issues

In addition to labor shortages, another issue in the manufacturing industry is the succession of technology and skills. The problem is that highly skilled workers are retiring, and their technology and skills cannot be passed on to the next generation. Automation and mechanization during labor saving will standardize and visualize the target manufacturing technology, thereby reducing the dependence on skilled workers, and preventing the problem of technology and skill succession.

How to promote manpower saving and points to keep in mind

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The following is a step-by-step explanation of the procedures and precautions to be taken when proceeding with manpower saving.

Analysis and Review of Existing Operations

The first step is to analyze and review current operations and work content. We shall identify tasks and operations that are candidates for manpower reduction, such as unnecessary or inefficient tasks, tasks that require a large workload, and tasks that do not need to be performed by human workers. We may reduce man-hours by eliminating or improving the efficiency of unnecessary or inefficient parts of the work. Areas with a large workload or that do not require human intervention are candidates for automation, which will be discussed later.

Standardization and documentation of work

After completing the overall work analysis and eliminating inefficiencies, work standardization is initiated. Differences in procedures among workers are absorbed and standardized, and these are documented as manuals. Standardization and documentation will enable anyone to work with the same efficiency and allow flexible assignment of employees to various tasks. Of course, it also contributes to quality stability.

In addition, to establish work standardization, continuous improvement, and establishment, it is important to implement regular health and safety patrols, in-plant inspections at the production site, to have a system that enables the smooth sharing and coordination of any deficiencies or issues uncovered through these inspections , and to have an efficient cycle of corrective action and verification. To achieve these goals, “DX-enabled production sites” utilizing smart devices and cloud services are attracting attention.

Automation and efficiency improvement by introducing the latest technology and equipment to production lines.

For operations that are particularly inefficient, burdensome, or do not need to be performed by humans, we shall consider automation and streamlining by introducing the latest technologies and equipment, such as robots. Recently, the manufacturing industry has been actively trying to improve the efficiency of manufacturing processes by utilizing various technologies centered on digital technologies such as AI, IoT, and Big Data. In addition, manufacturing equipment is becoming more sophisticated, and there are an increasing number of cases where automation of various production lines, from electronic component plants to large machinery plants, is being realized by utilizing and introducing such equipment.

Automation of production lines is an extremely effective means of reducing labor on production lines while maintaining the current production volume. For example, in China, smart factories where all production lines are automated are increasing in number to cope with a shrinking workforce due to the rapid aging of the population and declining birthrate, and a system that can produce a large volume of goods with a small number of workers is being established.
Many companies may find it a hard to suddenly automate all production lines, so it is a good idea to start by considering the automation from “time-consuming human works” and “processes with many errors caused by human labor”.
Implementing such automation requires capital investment but considering the benefits of reducing labor costs and defective products, there is ample room to consider this as a way to improve productivity.

Examples of manpower-saving measures at factories through in-house practices｜Ricoh

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Various companies are working to save manpower at their production sites. A typical example is the automation of assembly and inspection processes using articulated robots. An increasing number of companies are also introducing AGVs (Automated Guided Vehicles) to their factories to reduce the number of workers needed to transport materials. In recent years, AI-based machine learning and image recognition technologies have also been used to save labor in inspection and quality control.

Reducing manpower by using AGVs

Introducing examples of manpower saving: the usage of AGVs at Ricoh Group’s plants.

• What is AGV?

AGV is an abbreviation for Automated Guided Vehicle, an automatic guided vehicle that recognizes tape on the floor. AGVs are mainly used in factories and warehouses to transport goods, contributing to unmanned and labor-saving logistics within the premises.
The AGV developed by Ricoh is not a conventional magnetic type, but an optical type, which eliminates the cost and time and effort of changing the route.

• Results of the introduction

Ricoh used to utilize hand lifts to transport parts in the factory, but after the introduction of AGVs, the transportation work itself has been reduced to zero. The AGV automatically transports the picked items just by placing them on the floor, and the automation has been achieved without making any major changes to the layout or workflow. In addition, the hand lift transport skills of the operators at the production site were uneven, and production planning had to be done with a margin of time to spare.

Conclusion

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In this column, we have provided an overview of factory manpower saving, how to proceed with it, and explained specific approaches through Ricoh's actual examples. Reducing factory personnel is one of the most effective ways to solve problems faced by the manufacturing industry, such as personnel shortages, cost reductions, and productivity improvements at production sites.

With the shortage of human resources expected to worsen after 2024, factory manpower reduction is an indispensable initiative for the industry as a whole. To realize this goal, it is important to organize and standardize production processes.

Successful factory manpower saving requires not only the introduction of the latest technologies such as the Internet of Things (IoT) and AI, but also a flexible response to specific cases and a plan that takes into account the precautions to be taken at the production site. Therefore, it is important to have a detailed understanding of the information related to manpower saving and to be prepared for it. When proceeding with standardization and manpower reduction, be sure to give due consideration to privacy policies and safety measures.

Reducing factory personnel is more than just a cost-saving measure; it is an option that can lead to increased operational efficiency and growth. It is important to consider it in detail and take the best possible measures for your operation.

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