Baltic mechanical engineering manufacturers about personnel and digitization issues

The only way to reduce costs and increase productivity, solving the personnel shortage issue for the Baltic engineering and metal fabrication industry is manufacturing process automation and inventory digitization. Significant investments are required to achieve this, and so this process evolves slowly. The author looks into issues that arise in Latvia, Lithuania and Estonia and examples of their solution.

Longing to improve

"Both amounts of manufacturing and export in the industry keep on growing. For the last two years, the situation looks good. The industry is actively functioning, manufacturing even more modern goods with added value. Personnel is the main issue. This phenomenon is observed not only in Latvia, but in the other EU countries as well" - this is how Toms Grinfelds, chairman of the board of MASOC (Association of Mechanical Engineering and Metalworking Industries) describes the current situation.

The industry is short of employees, especially qualified engineers, and it leads to increasing costs. Even though Latvian manufacturers try hard to win over other EU countries, their personnel costs are still high. The manufacturers do not agree with Latvian electricity costs, being higher than in the neighboring countries. Productivity is increasing, but it's still a long way before it reaches the average EU level. Toms Grinfelds supposes that there are different ways to solve the lack of personnel: work with the existing employees, improve education systems, involve youngsters. MASOC is acting in all these fields.

You may invite specialists from other countries. However, only 17% of the companies tried to look for personnel abroad, this solution does not gain enough popularity on Latvia. The situation could be improved with more digitalization. MASOC clarified that over half of manufacturers would generally like to make manufacturing process changes, enable energy efficiency. Using robots and digitizing processes becomes even more popular.

Some months ago the association conducted a survey together with LIKTA (association of communications and information technologies) among mechanical engineering companies. They wanted to find out how digitized the companies are and what are their plans for future development. It was found that digitization level is very low at 11% of companies, but most of the companies foresee its improvement in the next couple of years. Automation and robotization are the most popular technologies, the manufacturers are working with it and developing.

Increasing efficiency

It's not only Latvia - the other Baltic states experience similar industry situation. Here is what Darius Lasionis, a representative for Lithuanian metalworking industry, admitted on "Manufacturing digitization in the Baltic region" conference. He says that both states face the same challenges, and they need to look for a way to increase efficiency and competitiveness.

Only 6% of EU metalworking companies are digitized using higher technologies, and only 16% of small and medium businesses are digitized. That's why efforts are required to improve the situation. The main Lithuanian issue is productivity of personnel, that is twice as low as in the developed EU countries, which also brings lower salaries. The main target is to increase efficiency and offer more goods.

Lasionis thinks that more funds should be diverted towards research and development. Lithuanian small and medium businesses are less technically prepared, they experience lack of qualified engineers and technicians, so it's more to be done to improve the employees' education.

Estonia has certainly a better picture, because its information technologies level is better, with industrial companies using its benefits at full potential. Still, small and medium businesses face complexities in digitization due to shortage of funds. Out of 7000 companies, 2200 are metalworkers. This is the biggest Estonian industry, with every 5th employee working in it. To attract qualified personnel, University of Tallinn has organized a manufacturing classroom with automatic robots which functions like a real manufacturing site. Here is a way for students to see how work should be done, and for companies to understand what is Industry 4.0.

Today is clear: to stay competitive, manufacturers have to plan their actions for several steps ahead, use experience of other countries and think about digitization. We have to highlight that this process is happening and developing in the industry. For example, the Apply solution which was developed in Latvia in cooperation with Peruza - equipment manufacturer for food processing industry, which allows to use artificial intelligence in manufacturing in order to increase productivity.

Nordic Plast, manufacturer of plastic granules, has implemented a solution for quality control of goods, defect detection and general efficiency increase. And there are even more examples as such year by year.

As the MASOC survey states, 44% industry members are planning to implement higher technologies in the next 5 years and become competitive not only in their countries, but on the international market. Following the survey, a state level strategy is being created by a specially designated work group.

Author: Sandra Dieziņa,

IMA Information

As Italian Machinery Association data shows, many Baltic manufacturers demonstrate interest towards Italian equipment, because they care about modernizing their shopfloor and plan to implement integrated management and optimization solutions. Modern metalworking equipment are perfect for that.

If you are looking for other materials related to manufacturing optimization, please read:

Automating bending operations improves press brake performance

What is more important — cutting machine utilization or process throughput?

The Critical Path to Manufacturing Efficiency

If the time has come to upgrade or enhance your production capabilities, you can also get a new machine from a reliable Italian manufacturer. Our catalog’s range of equipment from our members can satisfy needs of any manufacturing, from a small job shop to an automated multi-tasking plant.

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