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Brewery Solves Labor Shortage with Employees with Disabilities

Jerry Moore acquired Knee Deep Brewing Company in 2010, initially using a contract brewing facility in South Lake Tahoe to make beer and ship kegs to bars and restaurants just over the Nevada border in Reno. Fast-forward to 2013, when operations moved to its current home, a 37,000 square-foot, 40 BBL brewhouse with multiple 120 BBL fermenters. Unfortunately, labor shortages have been a persistent challenge.

The Challenge: A Reliable Workforce

“We had trouble finding reliable, hardworking employees to do the work.”  

Like many front-line roles in the wake of the Great Resignation, the labor shortage faced by the brewering was real, and turnover was high and disruptive.

Moore came up with a novel solution. Just down the road from the Auburn, Calif., brewery was a job development center run by PRIDE Industries, training people with disabilities for real-world jobs. Moore reached out and a crew from the social enterprise started in 2020. It’s been a win-win relationship ever since.

“The first thing that surprised me was how happy they were to be here,” Moore said. “They show up on time, work hard, are a lot of fun, and have turned out to be a perfect fit.”

The Solution: Workers with Disabilities a Perfect Fit

Such a great fit that when Knee Deep launched its first special brew to call attention to Autism Awareness Month in April 2022, they named the beer Perfect Fit, complete with a PRIDE Industries logo on the cans to call attention to autism and promote the inclusion of people with disabilities in the workforce. The brewery made 10 barrels and sold out in a few weeks.

“It was an English-style IPA which people liked,” said Brewmaster Dean Roberts, “but I think people also liked the cause of autism awareness, and it gave them a reason to choose that beer.”

The PRIDE Industries team named the 2023 version of the April brew—Hoppy Roger—with a pirate-themed label that included caricatures of employees Aaron, Thomas, Zach, and Evan crewing the ship with a Knee Deep logo replacing the skull in the traditional Jolly Roger flag. This time the company made 30 barrels to satisfy demand. 

Knee Deep donates a portion of proceeds to The Michael Ziegler PRIDE Industries Foundation, which provides programs to help people with disabilities, veterans, and foster youth—like the team working at the brewery–become job-ready.

“Awareness is great, but we want to do more,” Moore said. “We see the power of acceptance and inclusion and want to spread to the news.”

The Result: Contagious Enthusiasm

Should other breweries consider hiring people with autism or other disabilities? Yes, but not just brewers. “It’s not that different from hiring anyone else,” Moore said. “It’s finding the right person for the right job. This job happens to work for these individuals, and they love it.”

Take crew member Zach, for example. Ask him if he likes his job, and he answers immediately: “I love it.”

“They’re happy to be here, and that’s contagious,” said Roberts. “We’re all one team, and everyone enjoys working together. You don’t even think about the disability part anymore.”

It helps that a PRIDE Industries job coach is on hand to make sure everything runs smoothly.

“I love working with this team,” said coach Aaron Cartwright-Vasquez. “They’re great workers—I have to make sure they have what they need and take their breaks.” Cartwright-Vasquez provides transportation for those who need it and ensures everyone understands their schedules, which can vary weekly. “They’re waiting for me every morning wearing smiles.”

Untapped Labor Source

“Knee Deep Brewing has always been proud to have the best people working for it,” Moore likes to say. “Without them, we would not be where we are today. With great people comes great beer!”

More than 15 million people of working age in the U.S. identify as having a disability, an Accenture study found. The study found that companies that actively recruit and manage employees with disabilities have 28 percent higher revenue, twice the net income, and 30 percent higher profit margins. “Persons with disabilities have to be creative to adapt to the world around them,” the study said. “As such, they develop strengths such as problem-solving skills, agility, persistence, forethought, and a willingness to experiment—all of which are essential for innovation.”

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  • Packaging and fulfillment

Knee Deep Brewing Logo

“The first thing that surprised me was how happy they were to be here. They show up on time, work hard, are a lot of fun, and have turned out to be a perfect fit.”

— Knee Deep Brewing Company Owner Jerry Jones

The first industrial revolution arrived with the steam engine, around the year 1760, and ushered in an era in which machine power came to dominate the production of goods. The second industrial revolution began soon after the first one ended, around 1870. This era saw the rise of standardization and interchangeable parts and culminated in Henry Ford’s moving assembly line in 1913. The third revolution began with the invention of the computer, and radically changed how knowledge work is done. Now we’re on the cusp of a new revolution, brought about by the integration of computing into all facets of the manufacturing process, and leading to the rise of the smart factory.

Each of these revolutions is characterized by speed. The first helped get goods to market faster. The second helped build those goods faster. The third sped up the management of goods and markets. And now the fourth will once again speed up business—by making the journey from product concept to finished good faster. Like the revolutions that came before it, this fourth industrial revolution—aka Industry 4.0—is set to change the way work gets done and products get made.

Industry 4.0 and the Smart Factory

At its core, the smart factory is an outgrowth of the Industrial Internet of Things (IIoT) and “cyber-physical” systems, which use computer-based algorithms to monitor and control manufacturing robots and machines, and even drive vehicles. These technologies also enable smart inventory control, which is changing the warehouse and tightening the connection between engineers and the factory floor.

Industry 4.0 is generally defined as the culmination of a series of advances across several related technologies, each of which plays a key role in enabling factories of all kinds to run more efficiently than ever before. These technologies, along with innovative operational changes, are increasing the speed of manufacturing yet again:

automated factory
New technologies like inventory scanning drones are helping companies cope with the labor shortage.

Industrial Internet of Things – This is the most significant of the new technological advances, which is why IIoT is nearly synonymous with Industry 4.0. Robots, sophisticated equipment, and other devices—the machines that are part of Industry 4.0—are now able to provide real-time updates on their location, condition, and current activity through the use of sensors and RFID tags.

Autonomous Robots – The Greek prefix “auto” means self, as in “independent.” And that is certainly true of the newest generation of industrial robots. The pick-and-place robots that have been in operation for several years have more recently been joined by inventory scanning drones. Both are equipped with sensors and managed through cutting-edge software. Though they vary in size and function, nearly all these robots are capable of “seeing” a situation, analyzing it, formulating a response, and acting on it.

Big Data and AI Analytics – Autonomous robots and other devices can continuously provide feedback from the factory floor. But this mountain of data is useless without the software to analyze it. Today’s AI software gathers data from IIoT devices, combines that with input from ERP and CRM systems, and analyzes the information in real time. This provides immediate insights that enable engineers to implement quick changes to the manufacturing process—or further streamline it. 

Horizontal and Vertical Integration – IIoT may be the eyes and ears of Industry 4.0, but these linked devices would be of limited value in a traditionally structured operation. To take advantage of technological advances, companies themselves are changing, becoming more tightly bound both internally and across the supply chain. Horizontal integration entails linking communication across facilities and with suppliers. With vertical integration, production becomes more integrated with other departments—even sales and marketing—to allow for product changes to be quickly implemented. The goal is to eliminate knowledge silos and improve data transfer among departments.

Cloud Computing – Storing and sharing the vast amount of data that are gathered by IIoT devices would not be possible without cloud computing, and indeed, this service has been called the “great enabler” of Industry 4.0. The cloud is a communication nexus, the easily accessible repository of the data gathered by the cyber-physical systems that drive Industry 4.0.

Additive Manufacturing – Also known as 3D printing, additive manufacturing is more than a tool for rapid prototyping. Today, this technology is used to easily distribute manufacturing across multiple sites, or to customize consumer products on a mass scale. A growing list of products can now be stored in virtual inventories and “built” when and where needed, reducing both warehousing and transportation costs.

Digital Twins – The data produced by the IIoT can be sorted and analyzed in a number of ways for a variety of purposes. One of those purposes is the creation of a product’s digital twin. A digital twin is a simulation of a real product, machine, process, or system. Simulation software allows engineers to create virtual products and analyze their performance, so they can predict potential performance issues, and even identify malfunctioning parts.

Augmented Reality (AR) – Technology doesn’t yet allow us to manipulate holographic representations of data, but AR is pushing that boundary. Smart glasses and other mobile devices can be used to overlay digital content over a real environment, so that, for example, technicians can read repair instructions that appear to float in front of the machines they’re working on. This technology is still in its infancy, but eventually, it will allow engineers and others to step inside 3D models of products or machines to improve design or effect repairs.  

Zero Trust – Zero Trust isn’t a technology so much as an approach to technology, or more specifically, the users of that technology. As computing power becomes integrated into more and more manufacturing machines, and as companies increasingly rely on the cloud and big data to run their factory floors, the costs of a cyberattack will increase exponentially. In response, companies are implementing cybersecurity measures to protect against data breaches and other forms of hacking. This means eliminating an assumption of trust in linked systems. With a zero-trust policy, even internal users, applications, and devices on the network must be verified before they can access any assets.

Building Your Smart Factory

The technologies and policies listed above are the building blocks of a smart factory. Few manufacturers, of course, have made use of every single one of these innovations. Augmented reality, for example, is still a few years away for most companies. And 3D printing isn’t yet considered essential. But these technologies are synergistic. To get the most out of the IIoT, for example, companies need to leverage both the cloud and big data. And that in turn necessitates a strict approach to cybersecurity.

Today’s manufacturing floors are already heavily automated, so in some ways, manufacturing has already entered the era of the smart factory. But as with all industrial revolutions, the changes will speed up as time goes on. The companies that can anticipate these changes are the ones that will thrive.

digital smart factory tools
Fully functional holograms aren’t available yet, but holographic technology is making its way into the smart factory.

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A new year brings new hope, and this year is no exception. After nearly three years of a pandemic, companies and countries have learned how to manage COVID-19, and have shifted their primary focus to more pressing issues. And there are certainly plenty of other problems that manufacturers must contend with. Fortunately, companies are rallying, developing innovative solutions, and adapting quickly to a new normal that includes a less stable supply chain. Because of this, manufacturing trends for 2023 are generally positive.

Agile Supply Chains Are Becoming the Norm

Even before the pandemic, manufacturers had to navigate the increasingly acrimonious trade war with China, as well as an actual war in the Ukraine that has limited the supply of key materials used in multiple industries, especially electronics. In addition, the global supply chain has been hit by a series of natural disasters and ongoing labor shortages.
The domestic supply chain has experienced serious disruptions as well. In December, a nationwide rail strike was narrowly averted by congressional action. While the trains are still running, the crisis has not been resolved. Union leaders have been vocal in their disappointment with the imposed contract, and it’s reasonable to expect another strike in the future—maybe this year.
A factory floor worker with a disability.
To overcome labor shortages, manufacturers are seeking out untapped labor pools.

With supply chain disruptions like these becoming common, many industry experts are reaching the same conclusion: What’s required now is agility, and that includes proactive contingency planning, supplier diversification, and a host of other operational changes. Manufacturers now are working to create supply chains that can bend to global pressures without breaking. This means building in redundancies, diversifying suppliers, and investing in more advanced manufacturing technologies, including digital tools that enable more effective planning and execution, and allow manufacturers to move quickly from one supplier to another.

Outsourcing of Manufacturing Will Continue

One operational change embraced by some companies is outsourcing. The move toward outsourcing began several years ago, and—as Forbes Magazine predicted recently—is likely to continue in 2023. Outsourcing allows companies to focus on their core competencies and reduce operating costs, giving them the margins they need to weather the current unpredictable manufacturing environment. Forbes cites the example of Peloton, which outsourced all its manufacturing in 2022. And while it’s true that Peloton had no choice but to act quickly—given the faltering sales of its flagship product—other companies in much healthier condition are also outsourcing some or all of their manufacturing.

For outsourcing to be successful, companies need manufacturing partners that have experience working around supply chain disruptions. Before you outsource manufacturing to a third party, make sure that company can clearly articulate how it deals with unpredictable (though no longer unexpected) disruptions.

Reshoring Continues to Be a Strong Manufacturing Trend

It’s important to note that “outsource” and “offshore” don’t mean the same thing. In fact, just as outsourcing is on the rise, so is reshoring. There are many reasons why reshoring is becoming such an attractive option. Fuel costs have risen sharply, making transportation untenable for some products. Labor costs have also risen throughout Asia, including China. At the same time, automation is bringing down the cost of manufacturing in the U.S., further eroding the savings in labor costs that offshoring used to bring.

Another problem is the perceived inferiority of foreign-made products, especially those made in China, which can be a difficult stigma to overcome. A 2015 study by the Boston Consulting Group, for example, found that both American and Chinese consumers were willing to pay a 10% premium for goods made in the USA, and this sentiment does not appear to have changed.  

Made in USA
Studies show that customers are willing to pay a premium for products that are made in America.

For all these reasons, companies are increasingly seeking out domestic manufacturing partners. Luckily for them, new legislation like the CHIPS Act is already increasing the number of factories in the U.S., making it easier to find domestic manufacturing partners. Some of these facilities are slated to be “smart factories,” which bring greater efficiency to the manufacturing process, and can help compensate for efficiencies that have been lost to supply chain disruptions. 

Digital Manufacturing Trends Will Grow Stronger

Smart factories are in fact expected to become more prevalent in 2023. According to a recent Deloitte survey, 62% of manufacturers plan to invest in greater automation in 2023, both increasing efficiency and mitigating the effects of the labor shortage. On the software side, one in five manufacturers is currently developing a metaverse platform for their products and services. Other technologies that manufacturers plan to implement in order to increase operational efficiency during the next 12 months include: data analytics, artificial intelligence, advanced materials, and even quantum technology.

While 30% of manufacturers are choosing to develop the smart technologies they need in house, others are looking outside their own companies. They’re working with academic research institutions, acquiring companies that already have the desired capabilities, or partnering with technology companies.

Companies Will Move from “Just in Time” to “Just in Case”

The just-in-time manufacturing model was all about lowering inventory costs and maximizing efficiency throughout the supply chain, and for many years, it helped companies build up their bottom lines. But a just-in-time model requires a high degree of predictability. Without it, the model falls apart, leaving companies unable to fulfill orders. And indeed, supply chain disruptions have led to several high-profile instances of failed product delivery—just ask the makers of luxury cars, for one example.

The supply chain is no longer as predictable as it once was, and a return to the high stability of yore is unlikely. This is why CNBC recently reported on a trend that is picking up steam: just-in-case manufacturing. Companies that have adopted a just-in-case mentality are cushioning their supply chains. For example, they’re bringing back the concept of “safety stock,” increasing the inventory they carry on hand. This of course raises the risk of holding too much stock, which is why it’s important for companies who adopt this model to work with a manufacturing partner with expertise in inventory control.  

Manufacturers Will Adapt to Materials Shortages

According to the Deloitte survey, 72% of manufacturing executives believe that the shortage of essential materials will continue to pose the biggest supply chain uncertainty in 2023. But here again, manufacturers are finding ways to cope. They’re employing something new—digital technology—and also turning to old standbys: building local capacity, and moving away from just-in-time sourcing to create redundancy in their supply chains. Deloitte lists four strategies that manufacturers are employing:

  • Closer Supplier Relationships: Manufacturers are no longer taking supplier relationships for granted but monitoring and managing them carefully. They’re working with suppliers to be on the alert for possible supply hiccups, so they can quickly request an alternate transport route or switch to a comparable alternate component at the first sign of trouble.
  • Supplier Diversity: After years of pursuing efficiencies by paring down the number of suppliers, manufacturers are once again choosing not to put all their eggs in one basket. They’re mitigating their risks by building redundancy into their supply chains.
  • Boosting Local Capacity: To reduce supply bottlenecks and transportation headaches, some manufacturers are opening up domestic production facilities. Even global OEMs, if they have a big stake in the U.S. market, are opening factories closer to their customers. This trend is being helped along by federal incentives, most notably the Infrastructure Investment and Jobs Act, the CHIPS Act, and the IRA (Inflation Reduction Act).
  • Digital Capabilities: Manufacturers are turning to sophisticated digital technologies that let them manage the entire supply chain and coordinate more effectively among suppliers. This greater supply chain visibility enables companies to spot disruptions as they’re developing and respond quickly.

Talent Retention Solutions Will Get Creative

Even though 2022 saw a record number of new hires, job openings in manufacturing still number around 800,000. Skilled labor remains difficult to source, reducing operational efficiency. Because of this, manufacturers have begun taking steps to increase their supply of workers, and these approaches are likely to become more widespread in 2023. These solutions include:

  • Pay Incentives: Up to now, industries like retail and warehousing have been increasing wages faster than manufacturing has. But that looks set to change this year.
  • Skill Development: One reason for the labor shortage is simply that manufacturing is a far more technical industry than it once was. To get the skilled workforce they need, manufacturers are investing in training, and forming partnerships with academic institutions in order to create talent pipelines.

  • DEI Initiatives: Now more than ever, manufacturers are seeking to create environments that are welcoming to both women (who currently make up less than one-third of the manufacturing workforce) and minority groups, including people with disabilities. Not only does this approach allow manufacturers to access untapped labor pools, it also creates a virtuous cycle, given that nearly 70% of U.S. job seekers in a 2020 survey said they consider a diverse workforce a positive benefit when weighing job offers.

Sustainability Will Increase

The DEI initiatives that companies are implementing dovetail nicely with another manufacturing trend: increasing consumer preference for sustainable solutions. As with DEI, sustainability trends evolve quickly, and manufacturers are dedicating more resources to keep up, not just to meet internal sustainability goals, but also to please their end users. For this reason, many companies voluntarily comply with the multiple reporting regulations, ratings, and disclosure frameworks advanced by nonprofit organizations like the IFRS Foundation and CDP.

A Manufacturing Partner You Can Rely On

At PRIDE Industries, we help companies increase profits by stabilizing their supply chains. Our West Coast facilities minimize your risk of disruption, optimize manufacturing and fulfillment processing, and provide flexible, on-demand inventory schedules. Working with us also allows you to make a positive social impact with your business spend, while meeting consumer demand for products made in the USA.
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hand in blue glove working on microchips medical device manufacturer
Case Study:

Medical Device Manufacturer

20% Cost Savings and On-Time Delivery for Medical Device Manufacturer

When a Class II medical device manufacturer needed a reliable partner for production and supply chain management, it turned to PRIDE Industries. For more than ten years, PRIDE Industries has helped this manufacturer produce essential devices that are used to reduce pain and speed recovery for athletes, military personnel, and post-surgery patients worldwide.

Situation: Turnkey Medical Device Manufacturer

In 2008, a Class II medical device manufacturer hired PRIDE Industries as contract manufacturer to provide a full turnkey solution in supply chain management and electronics manufacturing services. Our solution is vertically integrated with global distribution support.

Services Provided

  • Supply chain management
  • Electronics manufacturing services
  • Strategic partnership, not solely transactional

Results

  • 95%+ optimized, on-time delivery
  • 20% cost savings realized through custom solutions and pricing
  • 18 months – obtained ISO13485 medical certificate and FDA compliance
  • 60% = 2021 forecast of YOY production volume increase for one product
  • Initial results exceeded expectations, leading the customer to expand the manufacturing contract

Highlights

20%

Cost savings

95%+

optimized, on-time delivery

“PRIDE Industries has been a reliable business partner for several years. The team at PRIDE remains in constant communication to ensure successful production of our products, and they consistently deliver quality results. We trust PRIDE Industries and we look forward to continuing to work with them as our business grows.”

— PRIDE Industries customer

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