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L%'3',
Technology and Its Impact
on Labor in Four Industries

A&3

Lumber and wood products/Footwear
Hydraulic cement/Wholesale trade
U.S. Department of Labor
Bureau of Labor Statistics
November 1986

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Bulletin 2263




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Technology and Its Impact
on Labor in Four Industries
Lumber and wood products/Footwear
Hydraulic cement/Wholesale trade
U.S. Department of Labor
William E. Brock, Secretary
Bureau of Labor Statistics
Janet L. Norwood, Commissioner
November 1986
Bulletin 2263

For sale by the Superintendent of Documents, U.S. Government P rinting Office, Washington, D.C. 20402







/

Preface

This bulletin appraises some of the major technologi­
cal changes emerging among selected American indus­
tries and discusses the impact of these changes on pro­
ductivity and labor over the next 5 to 10 years. It con­
tains separate reports on the following four industries:
Lumber and wood products (SIC 24), footwear (SIC
314), hydraulic cement (SIC 3241), and wholesale trade
(SIC 50,51).
This publication is one of a series which presents the
results of the Bureau’s continuing research on produc­
tivity and technological developments in major indus­
tries. Previous bulletins in this series are included in the
list of BLS publications on technological change at the
end of this bulletin.
The bulletin was prepared in the Bureau’s Office of
Productivity and Technology, Jerome A. Mark, Asso­




ciate Commissioner, under the direction of Charles W.
Ardolini, Chief, Division of Industry Productivity and
Technology studies. Individual industry reports were
written under the supervision of Rose N. Zeisel and
Richard W. Riche, by A. Harvey Belitsky (footwear
and wholesale trade), Robert V. Critchlow (lumber and
wood products}, and Richard W. Lyon (hydraulic
cement).
The Bureau wishes to thank the following organiza­
tions for providing the photographs used in this study:
Forest Industries, Brown Shoe Company, and Spectro In­
dustries, Inc.
Material in this publication, other than photographs,
is in the public domain and, with appropriate credit,
may be reproduced without permission.




Contents

Page
C h a p te r s:
1. L u m b e r a n d w o o d p r o d u c t s ..............................................................................................................................................
2 . F o o tw e a r

.........................................................................................................................................................................................

3 . H y d r a u lic c e m e n t
4 . W h o le s a le

tr a d e

1
17

.....................................................................................................................................................................

27

........................................................................................................................................................................

38

T a b le s :
1. M a jo r t e c h n o l o g y c h a n g e s in lu m b e r a n d w o o d p r o d u c ts

..........................................................................

2

..................................................................................................................

19

3 . M a jo r t e c h n o l o g y c h a n g e s in h y d r a u lic c e m e n t .................................................................................................

29

4 . M a jo r t e c h n o l o g y c h a n g e s in w h o le s a l e t r a d e ....................................................................................................

39

2 . M a jo r t e c h n o l o g y c h a n g e s in f o o t w e a r

5 . P r o j e c t e d c h a n g e s in e m p l o y m e n t in w h o l e s a l e

tr a d e b y o c c u p a t io n a l g r o u p , 1 9 8 4 - 9 5

. . 46

C h a r ts:
O u tp u t p e r e m p l o y e e h o u r a n d r e la t e d d ata:
1. S a w m il ls a n d p la n in g m i l l s , 1 9 7 0 - 8 4
2 . M il lw o r k ,

1 9 7 0 -8 3

.......................................................................................................................

9

..................................................................................................................................................................

10

3 . W o o d k it c h e n c a b in e t s , 1 9 7 2 - 8 3
4 . V e n e e r a n d p ly w o o d m i l l s ,

...................................................................................................................................

1 9 7 0 -8 4

.......................................................................................................................

5 . E m p lo y m e n t in lu m b e r a n d w o o d p r o d u c t s ,

1 9 7 0 - 8 5 , a n d p r o j e c t io n s , 1 9 8 5 - 9 5

6 . O u tp u t p e r e m p l o y e e h o u r a n d r e la t e d d a ta ,

fo o tw e a r , 1 9 7 0 -8 4

7 . E m p lo y m e n t in f o o t w e a r , 1 9 7 0 - 8 5 , a n d p r o j e c t io n s , 1 9 8 5 - 9 5
8 . O u tp u t p e r e m p l o y e e h o u r a n d r e la t e d d a ta ,
9 . E m p lo y m e n t in h y d r a u lic c e m e n t , 1 9 7 0 - 8 5 ,
1 0 . O u tp u t a n d h o u r s o f a ll p e r s o n s , w h o l e s a l e

12
13

......................

14

........................................................

22

..............................................................

25

h y d r a u lic c e m e n t , 1 9 7 0 - 8 4

....................................

33

a n d p r o j e c t io n s , 1 9 8 5 - 9 5 .........................................

36

tr a d e , 1 9 7 0 - 8 5

43

................................................................

1 1 . E m p lo y m e n t in w h o l e s a l e tr a d e , 1 9 7 0 - 8 5 , a n d p r o j e c t io n s , 1 9 8 5 - 9 5

.............................................

44

O th e r B L S p u b lic a t io n s o n t e c h n o l o g ic a l c h a n g e s ............................................................................................................

47







Chapter 1. Lumber and Wood
Products

Summary

grow by 0.3 percent a year until 1995.
Employment is projected to increase in most major
occupational groups, with the highest growth rates an­
ticipated for managers, engineers, carpenters, precision
woodworkers, and skilled handwork occupations. De­
mand should be strong for mechanics who can repair
logging vehicles, and for sawmill maintenance person­
nel—especially those who have experience with
solid-state electronics.
Specific reference to technological change is rare in
collective bargaining contracts. Several cooperative
agreements have been worked out between certain un­
ion local chapters and the management of individual
mills and plants that involve production and produc­
tivity improvements.

New equipment being introduced in the labor-inten­
sive lumber and wood products industry (SIC 24) is
reducing labor requirements. The rate at which new
equipment is being adopted varies among different sec­
tors of the industry. Logging operations are done pri­
marily by small contractors who have limited capital
resources for new technology and go in and out of ac­
tive business as the demand for logs fluctuates. Within
the various mill operations (sawmills, planing mills, ply­
wood mills), automated equipment such as computer-as­
sisted sawing and material handling equipment is being
used in medium-sized to large establishments. Com­
puters and other solid-state electronic devices are be­
coming more widely used in all portions of the industry.
Productivity and employment varied considerably in
the segments of the lumber and wood products indus­
try for which BLS measures are available. Output of
the sawmill and planing mill portion, grew only very
slightly between 1970 and 1984, while it grew slowly
for veneer and plywood mills and somewhat more ra­
pidly for wood kitchen cabinets. Output of millwork
declined slightly from 1970 to 1983. Over the period,
output per employee hour increased at an average an­
nual rate of 1.7 percent for sawmills and planing mills,
declined at an annual rate of 1.0 percent for millwork,
and increased by an annual rate of 2.5 percent for ve­
neer and plywood mills and 1.8 percent for wood kitchen
cabinets.
Investment increased from $535 million in 1970 (1972 con­
stant dollars) to more than $1 billion a year in 1977, 1978,
and 1979, then declined, amounting to only $448 million in
1982. Investment in sawmills and planing mills accounted
for about 40 to 45 percent of the total.
A total of 700,300 workers were employed in the
lumber and wood products industry in 1985, compared
to 645,500 in 1970. The average annual rate of increase
was 0.5 percent over this period. Employment in log­
ging operations increased at an annual rate of 1.1 per­
cent, while the number employed in sawmills and plan­
ing mills declined by an average of 0.6 percent a year.
Employment in the millwork, plywood, and structural
members sector (the largest sector, which accounts for
nearly one-third of industry employment) rose at an an­
nual rate of 1.2 percent. BLS projects employment to



Technology in the 1980’s
Technological improvements have contributed to in­
creased productivity in a number of areas. In the log­
ging sector, most changes involve improvements in the
vehicles used for cutting and moving timber. Computers
and electronic controls are being used more extensively
in sawmills, veneer and plywood mills, and millwork
and cabinet plants. There also have been improvments
in material handling systems, saws, fasteners, gluing op­
erations, and other areas.
Table 1 describes major innovations in the lumber
and wood products industry, their impact on labor, and
prospects for further diffusion.
Logging

Logging is the first step in converting trees to com­
mercially useful wood products. A considerable amount
of mechanization has been introduced into logging op­
erations over the past several decades. However, the
process remains labor intensive. Some of the results of
mechanization have been offset by the need for logging
crews to travel farther to find uncut timber and—more
important—to cut the smaller trees that are now more
generally available. This means that logging crews must
cut a larger number of trees to obtain the same quan­
tity of wood available from the larger trees harvested
in earlier years.
Logging operations, and the equipment used to ac1

Table 1. Major technology changes in lumber and wood products
Technology

Description

Labor implications

Diffusion

Logging
Timber management

Com puters are being used to
maintain data files and project
economic scenarios. Electronic
data recorders store information
in the field for computer data files.
Aerial and satellite photography
provides data on large forest
areas.

Tree felling

Feller bunchers harvest small to Skill required for operating a feller
buncher are very different from
medium-size trees in nonmounthose for chainsaw felling, as
tainous areas. Chainsaws still
feller bunchers are vehicles that
widely used in situations where
must be driven, and cutting is
feller bunchers cannot operate.
done by positioning the cutting
head.

Yarding operations

Tractors and skidders pull freshly High capacity skidders and mobile Improved skidders are in growing
yarding cranes can reduce yard­
cut logs to loading areas. Recent
use. Mobile yarding cranes are in
models have increased hauling
ing crew size. Helicopters and bal­
limited use due to high cost. Yard­
loons can make logging work
capacity. Spar and cable yarding
ing by helicopter or balloon is only
rarely used.
possible in otherwise inaccessible
equipment is used for difficult ter­
areas.
rain. Highly productive mobile
yarding cranes are now available.
Helicopters anf balloons are oc­
casionally used.

Mechanical support

Maintenance trucks equipped with Productivity of logging crews is im­ In growing use.
proved when equipment down­
tools and spare parts that ac­
time is reduced. Increased de­
company logging vehicles in the
mand for maintenance personnel.
field and make on-the-spot re­
pairs.

Timber management tools pro­ Limited but growing use.
vide foresters with greater control
over timber production.

Feller bunchers are widely used
where tree size and topography
permit.

Sawmills
Log handling

Lifting vehicles and cranes are used
to unload and move logs prior to
sawing. Singulators unscramble
stacks of logs and feed them into
sawmills one at a time.

Computerized sawing

A system of scanners, computers, Reduces the amount of decision­ Commonly used in new and re­
and software packages designed
making required of saw operators.
novated mills.
to cut wood in such a way as to
Maintenance requirements have
maximize yield. Actual cutting op­
increased and become more
complex. Greater need for elec­
erations range from manual to
automatic, but decisionmaking
trical and electronic skills.
about how to cut the wood is
computerized.

Improved saws

Thin-kerf saws make very thin cuts Thin-kerf saws require more main­ Thin-kerf saw blades are in growing
tenance than regular-kerf saws.
in wood, reducing waste. Stellite
use. Semiautomatic Stellite tip­
New semiautomatic methods of
tipping of saw teeth increases the
ping processes are new and pres­
applying Stellite to saw teeth re­
amount of time a saw blade can
ently in only limited use.
duce application times.
be used before requiring resharp­
ening, and also increases cutting
accuracy.

Lumber sorting

Automated systems, including scan­ Highly automated sorter systems Automatic sorters are expensive and
ners and computers or program­
can eliminate most of the manual
most frequently used only in high
work involved in sorting and stack­
mable controllers, sort cut lumber
labor cost areas and in large,
ing lumber.
by size and quality as it emerges
high-output mills.
from the sawmill.




2

Increased capacity for a number of All sawmills use some log handling
equipment, but there is too much
front-end loaders, cranes, and re­
variation from one mill to another
lated equipment reduces labor re­
to allow generalization.
quirements for log handling crews.

Table 1. Major technology changes in lumber and wood products—Continued
Technology

Diffusion

Labor implications

Description

V en eer and plyw o o d m ills

Automatic controls for hot water vats

Programmable controllers that auto­ Labor needed to monitor and regu­ Limited but growing use.
late water temperature is reduced.
matically control water tempera­
ture and drive pumps to circulate
water in the vats.

X-Y charger and digital lathe controls

Computerized control system that Labor requirements for lathe oper­ Limited but growing use.
ators are reduced.
automatically scans and centers
a block of wood in a lathe to en­
sure maximum yield. Digital hy­
draulic knife carriage provides
fast, accurate cutting.

Automated clippers

High-speed cutting machines that
trim sheets of wood to be made
into plywood panels.

High cutting speeds improve pro­ Automated clipper controls are in
fairly widespread use. Recent
ductivity.
models operate at higher speeds.

Jet veneer drying and mechanical
layup cabinets

Drying and glueing together of
veneer sheets to form plywood
panels.

Mechanized operations reduce labor Widely used.
requirements.

W o o d kitchen cabinets

Limited use.

Computerized cabinet design

Computer software systems that cal­ Reduces time and work required to
design cabinets.
culate materials and costs for
cabinet systems.

Improved fasteners

Concealed hinges and other fasten­ Large reduction in labor require­ In growing use.
ments for cabinet assembly.
ers that can be installed at
least partially by automated equip­
ment.

M illw ork

Automated control systems

Numerical and microcomputer sys­ Some reduction in labor require­ Limited use, due to cost.
tems control conveyors, robot trans­
ments.
fer equipment, and other automatic
machinery.

Miscellaneous equipment

High-speed molding machines, re­ Some reduction
motely controlled saws, air-powered
ments.
handtools, and high-speed glueing
and curing processes.

Reconstituted wood panels

Computer-controlled machinery mixes
wood chips and resins. Mechanized
conveyor belts and presses move
and compress the panels.

complish them, vary considerably from one part of the
United States to another. In the South and East, trees
of small diameter are prevalent, environmental regula­
tions are less stringent, and the terrain is usually not
steep. Highly mobile harvesting equipment with the ca­
pacity to handle large volumes of small logs is used. In
the West, there are large areas where terrain is rela­
tively flat and cutting conditions are similar to those in
the East. But in the mountainous terrain that is more
common in the West (including Alaska), environmen­
tal regulations are more strict and trees are often
larger—factors which require different cutting and haul­
ing procedures.
Diffusion of technology in logging operations is
closely tied to industry structure. Most logging con­
tractors employ fewer than 6 full-time employees.



in

labor

require­ In growing use.

Mechnized operations reduce labor re­ Widely used in this part of the industry.
quirements and increase technical
skill requirements.

Heavy machinery is usually adapted from agricultural
or construction vehicles, although some equipment
manufacturers—especially of skidding and loading ve­
hicles—direct their basic equipment primarily toward
the logging market.
T im ber m anagem ent. Foresters who manage tim­
ber-producing lands are using computers and other elec­
tronic and optical equipment more extensively. Com­
puter data files are being maintained for acreage planted
or cut, types of wood available, market prices, etc.
Models of different cutting scenarios can be run and
the resulting market values calculated. Small electronic
data recorders are available that can be carried into the
field to record information on the type, size, and quan­
tity of trees, as well as slope and soil conditions. The
3

recorded information is electronically entered into com­
puter files. Data on forest areas are available through
the use of aerial and satellite infrared photography.

One southern logging company increased productiv­
ity by an estimated 30 percent when chainsaw opera­
tions were replaced by a feller buncher. Logging crews
had cut an average of 550 to 650 tons of timber a week
with chainsaws. When the feller buncher was put into
use, output increased to 920-970 tons per week.1

Tree felling. Most trees are cut down by hand-held
chainsaws or by mechanized feller bunchers. The feller
bunchers are more productive but cannot be used in all
situations. Feller bunchers are vehicles that move
through a forest on tires or caterpillar tracks. They use
hydraulically powered shears, or one of several types
of saws (chain or circular) mounted on a boom, to cut
tree trunks. The shears, which operate in a manner simi­
lar to a pair of scissors, work well on small- to me­
dium-diameter trees, but not on large trees. Often there
is some damage to the tree trunk when it is cut with
shears. Feller bunchers work best on level ground, and
usually cannot be used on slopes with a grade of more
than 25 to 30 percent. Feller bunchers are probably the
dominant method of felling trees in the southern and
eastern parts of the country, where terrain is not moun­
tainous and most timber (especially pine) is of small to
moderate size. Chainsaws remain the dominant means
of felling trees in the more mountainous areas of the
West and Northwest.

Moving logs from cutting areas to
roads where they can be loaded onto log trucks is called
“yarding ” Most yarding is done with ground-based
equipment, which essentially means dragging the logs
(with limbs and branches cut off) from one area to an­
other. More complex aerial yarding operations are used
where ground-based systems are not feasible—but the
cost is much higher, ranging from $15 per thousand
board feet using ground-based skidders under optimum
conditions to over $200 per thousand board feet when
helicopters are used.2 Most ground-based yarding in­
volves the use of vehicles such as tractors and skidders

Yarding operations.

’Richard W. Bryan, “ New Equipment Boosts Productivity by 30
Percent,” Forest Industries, March 1982, p.28.
2U .S. Congress, O ffice o f T ech n o lo g y A ssessm ent, Wood Use: U.S.
Competitiveness and Technology, O T A -IT E -210 (W ashington, D .C .,
A ugust 1983), p. 123.

Logger using a feller buncher to cut trees.




4

breakdowns slow production, especially when the logging
crew is working a long distance from its home base.
Maintenance trucks—equipped with handtools, spare parts,
and heavy equipment such as an air compressor, impact
wrenches, and grinding and welding equipment— accom­
can
pany logging vehicles into the field and make on-the-spot
repairs.

that can move large volumes of timber over terrain,
except steep slopes. Improvements in equipment can
increase productivity for logging crews. A very pro­
ductive arrangement involves using a feller buncher and
a grapple skidder (a skidder fitted with a claw device
for holding logs). The feller buncher cuts trees and
leaves them in small stacks (or bunches). The grapple
skidder, following along, picks up one end of the bunch
and drags it to the loading area.
A new model of skidder, equipped with a crane to
provide self-loading capability, increases output and
productivity in several ways: The self-loading feature,
combined with a large hauling capacity, makes it pos­
sible for this skidder to replace two or three conven­
tional tracked skidders and to reduce crew size from
eight workers to five or six. With fewer skidders, the
number of skidder trips is lowered, fuel consumption is
reduced, and there is less disruption of operations at
the area where logs are removed from skidders and
loaded on logging trucks. Also, since this type of skid­
der can haul logs over a longer distance, roadbuilding
requirements for logging trucks are reduced.3
Where ground-based yarding is not feasible because
of terrain conditions, more expensive aerial yarding op­
erations are required. The predominant method utilizes
a spar and cable arrangement which resembles a fish­
ing rod and reel. Steel cables run from a drum at the
base of the spar, up the spar, and out to the felling area,
which might be 1,000 to 1,500 feet away. Yarding spars
can move logs up and down steep slopes and across
ravines.
One of the most important developments in yarding
spar technology has been the development of a mobile
yarding crane. These new-model yarding cranes incor­
porate most of the refinements used on other types of
spars. One model, for example, combines a small oper­
ating crew (two people), high operating speed, high
mobility, and a yarding capability of up to 1,500 feet,
which often allows the yarding crane to operate from
roadside. The result is an expensive, but high-capacity
yarder.4
Helicopters and balloons sometimes are used for log­
ging, but applications are limited because of the expense
involved. These vehicles allow logging operations to
be conducted in areas inaccessible to other logging sys­
tems or in localities where surface vehicles would cause
an unacceptable amount of environmental damage.

Sawmills

Sawmills convert logs into lumber for commercial
use. A number of technological developments have been
introduced that increase productivity and mill effi­
ciency, including advances in log and lumber handling
equipment, the introduction of computers into mills
(primarily in sawing operations), and improvement in
saw cutting edges. To some extent, the decline in the
size of logs received by sawmills has stimulated the de­
velopment of new technology. But some of the im­
provements would have been introduced (although per­
haps more slowly) regardless of log size.
Logs brought into a sawmill need to be
unloaded, moved to storage areas, and eventually trans­
ported to the mill. Vehicles with hydraulic lifting
arms—including front end loaders and log stackers—are
commonly used. Cranes are used less frequently. Since
sawmills vary in size, layout, storage space, and type
and size of logs used, it is difficult to generalize about
the most efficient method of moving logs. Overhead
cranes on straight tracks or boom-type cranes on rotary
tracks are very productive where tree-length logs are
cut to length in the mill (many mills require that logs
be cut to certain maximum lengths before delivery to
the mill).
Logs are moved from storage areas to log
decks—platforms located adjacent to the mill that con­
tain conveyors which carry logs into the mill. The pile
of logs in front of the log deck has to be loaded onto
the log deck conveyors and fed into the sawmill one
log at a time. One conventional way to load a log deck
is for an operator, using a log stacking vehicle or small
crane, to carry one log at a time to the deck.
A more productive method is to use a machine—de­
veloped fairly recently—that unscrambles the logs and
places one log at a time on the log deck. This machine,
called a singulator, consists of a large rotating drum
with metal fingers or flutes welded around the circum­
ference of the drum. When logs are stacked against the
rotating drum, the flutes pick up single logs and lift
them onto the log deck. During the late 1970’s, a num­
ber of singulators were developed that would handle
logs up to 45 feet in length. New singulators that are
large enough to handle tree-length logs are being in­
troduced. One model has a drum that is 70 feet long
and has 8 flutes. This singulator, which rotates at 4 rpm,
can handle 64 tree-length logs a minute—much more
L og handling.

Logging crew productivity has
sometimes been increased by providing maintenance for log­
ging equipment while it is in the field. Equipment

M aintenance support.

3John Friesen, “ Self-loading Skidder Aids Productivity Increase,”

Logging and Sawmilling Journal, March 1984, pp. 14-16.
4Tony Whitney, “ Grapple Yarder Combines Speed With Distance,”

Logging and Sawmilling Journal, August 1984, pp. 12-13.




5

though this is changing rapidly. Edger and trimmer op­
timizers, using scanners and computer control, position
boards for the most economical cutting and trimming.
Edger and trimmer saws are usually automated, and
their control systems are sometimes linked to headsaw
and sorter controls.
Some changes in skill requirements and productivity
have resulted from using automated sawing procedures,
and the number of people required for some jobs may
be reduced. In older, less automated mills, head sawyers
are among the most highly skilled employees. But with
computerized sawing, less decisionmaking is required
of the head sawyer. There is disagreement in the indus­
try as to whether skills needed by a head sawyer are
reduced. But it does appear that someone can be trained
for this position in less time in a sawmill that uses com­
puterized sawing.
Faster training also is possible for workers in other
sawing operations in computerized systems: Edger and
trimmer operators spend less time deciding the best
method to cut each piece of lumber and concentrate
more on visually inspecting wood for quality. How­
ever, maintenance operations have increased and have
become more complex—especially electronic mainte­
nance associated with computers, scanners, and pro­
grammable controllers. Mill electricians increasingly
need a strong background in solid-state electronics. The
number of auxiliary people needed to keep wood mov­
ing along the conveyors from one sawing station to an­
other may be reduced in the most advanced mills.

than an operator using a crane or front end loader can
accomplish.5
C om puterized sawing. Logs must go through a number
of cutting operations in a sawmill before they are con­
verted into wood products for commercial use. Central
to all cutting operations, regardless of sawmill size and
extent of mechanization, is the need to select the best
method to cut the wood to achieve maximum yield and
minimum waste. Logs are not uniform—lengths, diame­
ters, amounts of taper from top to bottom, and straight­
ness vary. The best cutting pattern for one log will
probably not be the best pattern for the next one. Saw­
dust and scrap wood represent decreased revenues to
a sawmill.
Traditionally, cutting decisions are made by workers
at each cutting station, with the most crucial decisions
made by the head sawyer, who makes the first cuts on
logs as they come into the mill. Individual skills are
very important in determining how much useful wood
is recovered from each log.
Automated sawing operations have been developed
to assist the sawyer in maximizing the yield from each
piece of wood. The process involves using optical, infra­
red, or laser scanners to determine the configuration of
each piece of wood just before it goes into a sawing
station. That information is sent to a computer, which
uses software incorporating models of wood configu­
rations and instructions on the best way to cut a par­
ticular piece to maximize yield. The computer compares
the configuration of the scanned wood with the models
in its memory, and selects the cutting pattern that best
fits the piece of wood that has been scanned.
Computer cutting decisions can be fully automated
in systems that are available where the wood is scanned
on its way to the saw, and put into the proper sawing
position by hydraulic or pnuematic controls, as the saw
blades are adjusted automatically. Then the wood is fed
into the saw. In a fully automated system, the operator
has manual override control. In less automated systems,
the computer provides an operator with data on how
to cut the wood, sometimes by display on a TV-like
screen in the sawyer cubicle, but more often by focus­
ing laser guide beams in front of the saw blades. The
operator aligns the wood according to the guides, and
feeds it into the saw.
Computerized sawing is used most frequently on a
mill’s headsaw. This is where a log is first cut, the most
complex sawing operation in the mill. Many new and
renovated mills use computerized sawing operations on
their headsaw. Other sawing operations—bucking, edg­
ing, trimming, etc.—are less frequently automated, al­

Thin-kerf saws are narrow, highly ac­
curate saw blades that make very thin cuts in a piece
of wood, leaving more wood intact and less waste on
the sawmill floor in the form of sawdust. While thinkerf saws allow a mill to get more useful lumber from
a log, they require increased maintenance. Saw filing
must be performed carefully, and the spacers and guides
for the saw blades (which work at close tolerance) re­
quire precise machining. A mill that changes to thinkerf saw blades may have to increase the size of its saw
filing crews or add more automated saw filing
equipment.
Stellite tipping on saw teeth reduces saw filing costs
and increases cutting accuracy. Saw teeth that have
been treated with Stellite can be used 4 times as long
before changing and resharpening compared to un­
treated saw teeth. Until recently, Stellite had to be ap­
plied by hand, which was time consuming and yielded
inconsistent results. Several semiautomatic methods to
apply Stellite have been developed which require an
operator to run the machinery but accomplish the tip­
ping operation with greater speed and consistency than
is possible with hand applications. After the saw teeth
have been coated with Stellite, they must be shaped on
a grinding machine for accurate cutting (the grinding
Im proved saws.

5Bob Westergaard, “ Log Preparation,” Logging and Sawmilling Jour­

nal, January 1983, pp. 21-23.



6

late 1970’s, rotates each block in the lathe and scans
the block at a number of points around its circumfer­
ence and length (the X and Y points). The data are
analyzed by computer, and the position of the block is
automatically set to yield the maximum amount of sliced
wood. Most of the scanners used are optical (one model
is capable of scanning the block at 120 points in one
second) and some are ultrasonic. X-Y chargers are cred­
ited with wood recovery improvements of 5-10 percent
over the older method, in which a lathe operator (or
spotter) had to center the block by hand using a
shadow-line guide.
Peeling speed and accuracy are further increased by
use of a PLC-controlled digital hydraulic knife carriage
and digital-powered backup roll, which provides part
of the torque necessary to turn the block. The solid-state
controls used to operate this equipment can be preset
to handle blocks of different sizes. This adds an esti­
mated 2 percent to wood recovery rates, and makes
possible faster changes of peeler blocks in the lathes.6
The peeled wood then goes through high-speed ro­
tary or guillotine clippers controlled by electronic scan­
ners. Some clippers are designed to operate at 500 feet
per minute and have controls that include display ter­
minals and printers to record operating data.
Jet veneer drying of veneer sheets, and mechanized
panel layup (glueing together of veneer sheets to form
panels) are commonly found in modern, high-output
mills. Although these technologies have been in use for
some time, improvements in solid-state controls con­
tinue to be introduced.

operation increases accuracy for a saw blade whether
it is coated with Stellite or not, but is often not done
on uncoated saw blades).
Cut lumber leaves a sawmill on a con­
veyor (called a “green chain”) that takes it to a storage
area where it is sorted by size and quality and stored
in bins. Lumber sorting is one of the most labor-inten­
sive operations in a sawmill. The traditional and most
common method of sorting is entirely manual: A sorter
pulls a piece of lumber off the conveyor, decides where
it should go, and carries it to the proper stack or bin.
A small mill might have 3 or 4 people sorting; a large
mill might have 15 or 20.
Highly automated lumber sorters are available that
can eliminate most of this manual work. The automated
sorting systems use scanners connected to computers
or programmable controllers to determine lumber size.
The computer or controller directs the mechanized sort­
ing system to place the lumber in the proper storage
area. Automatic sorters are expensive but are being used
more extensively in high labor cost areas to achieve
large reductions in labor requirements. In areas where
labor costs are low, the technology used varies by mill
size: Large, high-output mills may use automatic sorters,
but small and moderate-sized general-purpose mills may
not find automated sorters to be cost effective.

L u m b e r sorting.

Veneer and plywood mills

Technological changes have been introduced into this
portion of the wood products industry in response to
the growing use of small-diameter logs and, for soft­
woods, to changes in the types of woods used. The
mechanized and automated equipment being introduced
primarily affects softwood plywood production, which
is a high-volume operation. Hardwood veneers and ply­
woods are more expensive and difficult to handle. They
are often used in making furniture where careful han­
dling is required to protect the appearance of the wood.
Consequently, high-speed operations are generally not
compatible with hardwood veneers and plywoods.
Softwood plywood mills make use of the same log
handling equipment—including cranes, singulators,
debarkers, and bucking saws—used by sawmills. These
mills experience the same improvements in log handling
operations as already described for sawmills.
After the logs are cut into proper lengths, they are
soaked in hot water vats. This softens the wood and
facilitates peeling off of thin layers for plywood and
veneer. Programmable logic controllers (PLC’s) main­
tain water temperature at 120 degrees or higher and
operate pumps that continually circulate the water.
Logs—or peeler blocks—are then mounted in lathes
to be cut. The blocks can be automatically centered in
the lathes by a recently developed process called an
X-Y lathe charger. This equipment, introduced in the



Wood kitchen cabinets

Computer systems are available to cabinetmakers to
provide data on materials and costs. Using these sys­
tems, a cabinetmaker enters the dimensions of each cabi­
net in a customer order, and the computer program
calculates and prints out the manner in which each piece
of wood needed to make the cabinet is to be cut, the
total materials list, and a job cost report. At least one
new system includes a terminal which can display a
complete cabinet in any size or configuration. The data
from the screen and keyboard are then translated into
a list of materials, sizes, and prices. These systems pro­
vide sales personnel with rapid estimates for jobs, and
reduce the amount of time and work required to design
cabinets.
Improved fasteners and fastening systems also have
been developed to reduce assembly time for cabinets.
The use of concealed hinges, for example, has resulted
in significant gains in output. The hinge components
can be easily inserted into holes which have been drilled
into flat panels by automatic methods.
6“Plywood Manufacturing Is More Precise, Thanks to Computers,”
Forest Industries, April 1983, p. 23.
7

mechanized and less labor intensive than plywood panel
production. Employees need somewhat more technical
aptitude and training to operate the equipment and to
work with the formaldehyde-base resins used as adhe­
sives (emissions of which are regulated by both the En­
vironmental Protection Agency and the Department of
Housing and Urban Deveopment).

Millwork

Millwork consists of cutting, shaping, and construct­
ing wood to specified dimensions. Millwork products
include doors, wood awnings and louver windows,
wood moldings and panel work, staircases and railings,
window frames and trim, and many other products.
Sawing, shaping, sanding, glueing, and glazing are part
of millwork operations.
Although millwork has been highly mechanized for
several decades, automated systems are being intro­
duced in some mills. Numerical and microcomputer
controls for machinery and for material handling sys­
tems are being used more frequently. Carousels that
interface with conveyors, and robot transfer palletizing
equipment are being introduced. Diffusion of these au­
tomated systems is currently rather slow—and may re­
main so, given the capital requirements and the pre­
dominance of small firms in the industry.
Technologically advanced equipment designed spe­
cifically for millwork is in growing use. High-speed
machines are being introduced that fabricate a large
variety of moldings. Ripsaws with cutting patterns that
are controlled by the shadows of an overhead wire are
available. Abrasive planers equipped with solid-state
sensing devices also have been developed that prepare
more uniform wood surfaces. Air-powered handtools
are gradually replacing electric models. Finally, high­
speed glueing and curing processes being introduced
greatly reduce the time required for glueing operations
and also make stronger bonds. All of these technolo­
gies can reduce labor requirements for operators.

Output and Productivity Trends
Output

Output in the segments of the lumber and wood prod­
ucts industry for which BLS data are available, except
for wood kitchen cabinets, has shown little change since
1970.7
In the sawmill and planing mill sector, annual output
changed very little between 1970 and 1984, increasing
at an average annual rate of only 0.4 percent (see chart
1). There was growth early in this period—averaging
4.9 percent a year from 1970 to 1973 and 1.0 percent
between 1973 and 1978. Output declined after 1978, go­
ing down by an average rate of 0.7 percent a year
through 1984. Despite the decline in output after 1978,
the level was still noticeably higher in 1984 than in
1978. Output reached both its highest level (1979) and
its lowest level (1982) for the entire 1970-84 period dur­
ing the final 5 years. Sawmill and planing mill output
is very dependent upon construction activity, which
was low in 1981 and 1982 and improved from 1983 to
early 1986. The U.S. Department of Commerce esti­
mates that the output of sawmills and planing mills
should decline later in 1986. The strength of the U.S.
dollar has affected import and export levels for lumber.
Exports of lumber declined in 1983, while imports from
Canada increased. This dampened the increase in do­
mestic output that has taken place since 1982.
Output for millwork declined very slightly, by an
average annual rate of 0.4 percent, between 1970 and
1983 (see chart 2). Output grew strongly (11.9 percent
a year) from 1970 to 1973, but after this high point in­
dustry output has been much slower. Output continued
to grow, but just barely, at an average annual rate of
0.3 percent from 1973 to 1978, then declined by 3.3
percent a year from 1978 to 1983. Output dropped to
its lowest point in 1982, then increased in 1983 due to
growth in residential construction and renovation ac­
tivities. Most millwork production involves wooden
doors, window frames, moldings, and architectural and
exterior millwork. Output in this sector of the industry,
therefore, rises and falls with construction activity.
Output for wood kitchen cabinets increased at an av-

Reconstituted wood panels

Small pieces of wood are loaded together with resin
and pressed into sheets of wooden panels that are about
3/4-inch thick. Wood for the panels commonly comes
from sawmill and plywood mill scraps—wood chips
and other residues. Logs of low-quality softwoods and
inexpensive hardwoods are also used as raw materials
when wood panel manufacturers need more control
over the size of wood chips used. Particleboard is made
of wood chopped down into small granules. For waferboard, larger wood chips are used. Oriented strandboard
consists of strands of wood in criss-crossed layers for
greater strength.
Wood chips and resins are mixed in computer-con­
trolled machines, then deposited, in the form of 4-inch
thick panels, onto moving belts. The belts carry the
panels through a series of platen-type presses where
heat and pressure are used to compress the panels, in
stages, down to 3/4-inch thickness. Mixing, moving,
and compressing operations are fairly automatic—one
operator in a control room and a few people at the
presses. Some final sanding of the panels is done, which
is the most labor-intensive and least skilled job.
The production of reconstituted wood panels is more



7
B L S does not have an output index for the entire lumber and w o o d
products industry. Indexes are available for saw m ills and planing mills
(SIC 2421), m illw ork (SIC 2431), w o o d kitchen cabinets (SIC 2432),
and veneer and p lyw ood m ills (SIC 2435, 2436).

8

Chart 1.

Sawmills and planing mills: Output per employee hour and related data,
1970-84

Ratio scale (1977 = 100)

Ratio scale (1977 = 100)

140
130
120
110

100

90
80
70

60
1970

1972

1974

1976

1978

Source: Bureau of Labor Statistics.




9

1980

1982

1984

Chart 2.

Millwork: Output per employee hour and related data, 1970-83

Ratio scale (1977 = 100)

Ratio scale (1977 = 100)

140
130
120
110
100

90
80
70

60
140
130
120
110
100

90
80
70

60
140
130
120

110
100

90
80
70

60
1970

1972

1974

1976

1978

Source: Bureau of Labor Statistics.




10

1980

1982 1983

e r a g e a n n u a l r a t e o f 4 .5 p e r c e n t f r o m 1 9 7 2 t o 1 9 8 3 ( s e e

i n c r e a s e d b y a n a v e r a g e a n n u a l r a t e o f 2 .5 p e r c e n t b e ­

c h a r t 3 ). G r o w t h b e t w e e n 1 9 7 3 a n d 1 9 7 8 a v e r a g e d 8 .9

tw een

p e r c e n t a y e a r ; o u t p u t d e c l i n e d t o it s l o w e s t p o i n t in

s m a l l i n c r e a s e in o u t p u t ( 0 .7 p e r c e n t a n n u a l l y ) a n d a

1 9 7 5 , th e n g r e w s t r o n g ly th r o u g h 1 9 78. B u t fr o m 1978

l a r g e r d e c l i n e ( 1 .8 p e r c e n t a n n u a l l y ) in e m p l o y e e h o u r s .

1970 and

1 984. T h is in c r e a s e f o llo w e d fr o m

a

th r o u g h 1 9 8 3 , o u tp u t d e c lin e d at a n a v e r a g e a n n u a l ra te
o f 2 .9 p e r c e n t , r e a c h i n g i t s h i g h e s t l e v e l in

1979, d e ­

Investment

c lin in g d u r in g e a c h s u c c e e d i n g y e a r th r o u g h 1 9 8 2 , th e n
t u r n i n g s h a r p l y u p w a r d in 1 9 8 3 .
O u tp u t

fo r

veneer

and

T h e lu m b e r a n d w o o d p r o d u c t s in d u s tr y s p e n t $ 5 3 5

p ly w o o d

m ills g r e w

very

m illio n (in c o n s t a n t 1 9 7 2 d o lla r s ) o n p la n t a n d e q u ip ­

s l o w l y , a t a n a v e r a g e a n n u a l r a t e o f 0 .7 p e r c e n t , f r o m

m ent

1 9 7 0 t o 1 9 8 4 ( s e e c h a r t 4 ). G r o w t h w a s s t r o n g b e t w e e n

t h r o u g h 1 9 7 4 , d e c l i n e d in 1 9 7 5 a n d 1 9 7 6 , t h e n j u m p e d

1 9 7 0 a n d 1 9 7 3 , a v e r a g i n g 6 .4 p e r c e n t , a n d c o n t i n u e d a t

to s lig h tly m o r e th a n $1 b illio n e a c h y e a r fr o m

a n a n n u a l r a t e o f 3 .7 p e r c e n t f r o m

th ro u g h

1973 to 1978. A fte r

in

1 9 7 0 .9 T h e

a m o u n t in v e s t e d

grew

each

year

1977

1 9 7 9 . T h is 3 -y e a r p e r io d w a s th e h ig h p o in t

1 9 7 8 , o u t p u t d e c l i n e d a t a n a n n u a l r a t e o f 0 .8 p e r c e n t

fo r in v e s tm e n t b e t w e e n 1 9 7 0 a n d 1 9 8 1 . I n v e s tm e n t d e ­

a y e a r t h r o u g h 1 9 8 4 . O u t p u t i n c r e a s e d in 1 9 8 3 a n d 1 9 8 4 ,

c l i n e d in 1 9 8 0 , 1 9 8 1 , a n d 1 9 8 2 ( r e a c h i n g a l o w p o i n t o f

p r o p e lle d b y g r o w in g c o n s t r u c tio n a c tiv ity . T h is w a s

$488

p a r t i c u l a r l y t r u e f o r s o f t w o o d v e n e e r a n d p l y w o o d in

econom y.

1 9 8 4 , a s c a p a c it y u tiliz a tio n fo r th is p o r tio n o f th e in ­

m illio n ),

L o g g in g

d u s tr y a v e r a g e d 9 0 p e r c e n t o r b e tt e r .8

r e fle c tin g

th e

o p e r a tio n s (S I C

r e c e s s io n

in

th e

U .S .

2 4 1 ) h a v e a c c o u n te d

fo r

1 8 -3 4 p e r c e n t o f to ta l in v e s tm e n t o v e r th e 1 9 7 0 -8 2 p e ­
r io d

Productivity

and

a fa ir ly c o n s is t e n t 2 4 -3 0 p e r c e n t e a c h

year

s in c e 1 9 7 7 . A b o u t 9 0 p e r c e n t o f lo g g i n g e x p e n d itu r e s

P r o d u c tiv ity (a s m e a s u r e d b y o u tp u t p e r e m p lo y e e

a r e fo r e q u ip m e n t.

h o u r ) i n c r e a s e d in 3 o u t o f t h e 4 s e g m e n t s o f l u m b e r

S a w m ills a n d p la n in g m ills ( S I C 2 4 2 ) h a v e a b s o r b e d

a n d w o o d p r o d u c t s fo r w h ic h B L S h a s d a ta .

th e la r g e s t p o r t io n o f in v e s t m e n t e x p e n d it u r e s , r a n g in g

O u t p u t p e r e m p l o y e e h o u r in s a w m i l l s a n d p l a n i n g

fr o m 4 0 p e r c e n t to 53 p e r c e n t o f th e to ta l o v e r th e e n ­

m i l l s i n c r e a s e d b y a n a v e r a g e a n n u a l r a t e o f 1 .7 p e r c e n t

tir e 1 9 7 0 -8 2 p e r io d a n d a s t a b le 4 1 -4 5 p e r c e n t e a c h y e a r

a y e a r fr o m

s in c e 1 9 7 7 . A b o u t 2 0 p e r c e n t o f t h e s e e x p e n d itu r e s w e r e

1970 to

1 9 8 4 . T h is p r o d u c t iv it y g a in o c ­

c u r r e d in s p i t e o f l i t t l e c h a n g e in o u t p u t o v e r t h e p e ­

fo r n e w p la n ts a n d s tr u c tu r e s a n d 8 0 p e r c e n t fo r n e w

r io d a s a w h o le b e c a u s e e m p l o y e e h o u r s d e c lin e d b y

e q u ip m e n t.

a n a v e r a g e o f 1 .3 p e r c e n t a y e a r . B o t h o u t p u t a n d e m ­

M illw o r k , w o o d

p l o y e e h o u r s r e a c h e d t h e i r h i g h e s t l e v e l s in 1 9 7 9 , a n d
b o th m e a s u r e s d e c lin e d th r o u g h
h o u r s d e c lin in g
1983 and

m uch

1984, b o th

1982 (w ith e m p lo y e e

c a b in e ts , a n d

v en eer and

p e n d it u r e s a n d w e r e c o n s i s t e n t ly in th e l o w - t o m i d - 2 0 -

m o r e r a p id ly th a n o u tp u t ). In
m e a s u r e s tu r n e d

k it c h e n

p l y w o o d m i l l s ( S I C 2 4 3 ) r e c e i v e d 1 7 -2 8 p e r c e n t o f e x ­

p e r c e n t r a n g e s i n c e 1 9 7 7 . I n t h e e a r l y 1 9 7 0 ’s, 3 0 p e r ­

u p w a r d a g a in ,

c e n t o f e x p e n d it u r e s w e r e fo r p la n t a n d 7 0 p e r c e n t fo r

w it h o u tp u t g r o w in g a lit t le m o r e r a p id ly th a n e m p lo y e e

e q u i p m e n t , b u t b y t h e l a t e 1 9 7 0 ’s a n d e a r l y 1 9 8 0 ’s, t h e s e

h ou rs.

r a tio s h a d c h a n g e d s o th a t e q u ip m e n t e x p e n d itu r e s w e r e

In m illw o r k , o u tp u t p e r e m p lo y e e h o u r d e c lin e d at

ta k in g 8 1 -8 4 p e r c e n t.

a n a n n u a l r a t e o f 1 .0 p e r c e n t d u r i n g 1 9 7 0 - 8 3 , a s o u t p u t
d e c l i n e d s l i g h t l y ( - 0 .4 p e r c e n t a n n u a l l y ) w h i l e e m p l o y e e

Employment and Occupational Outlook

h o u r s i n c r e a s e d s l i g h t l y ( 0 .5 p e r c e n t a n n u a l l y ) . O u t p u t
p e r e m p l o y e e h o u r r o s e f r o m 1 9 7 0 t o 1 9 7 7 — b u t a t a n in ­

Employment

c r e a s i n g ly s l o w e r r a te — a ft e r w h ic h it d e c li n e d s t e a d ily .

E m p l o y m e n t in l u m b e r a n d w o o d p r o d u c t s g r e w f r o m

O u tp u t p e r e m p l o y e e h o u r fo r w o o d k it c h e n c a b in e t s

6 4 5 ,5 0 0 w o r k e r s in 1 9 7 0 t o 7 0 0 ,3 0 0 in 1 9 8 5 — a n a v e r ­

i n c r e a s e d a t a n a v e r a g e r a t e o f 1 .8 p e r c e n t a y e a r b e ­
tw e e n

a g e a n n u a l g r o w t h r a t e o f 0 .5 p e r c e n t ( s e e c h a r t 5 ). I n ­

1 9 7 2 a n d 1 9 8 3 , as o u tp u t g r e w a lm o s t t w ic e a s

d u s t r y e m p lo y m e n t e x p a n d e d r a p id ly d u r in g th e e a r ly

r a p id ly a s e m p lo y e e h o u r s . T h is p a tte r n p r e v a ile d fr o m
1973 th ro u g h

1 9 7 0 ’s, d r o p p e d r a t h e r a b r u p t l y b y 1 9 7 5 , t h e n b e g a n t o

1978, th e n c h a n g e d as p r o d u c tiv ity d e ­

grow

c lin e d b y 0 .4 p e r c e n t a y e a r fr o m 1 9 7 8 t h r o u g h 1 9 8 2 —
a r e s u lt o f o u tp u t d e c lin in g a little m o r e r a p id ly th a n

1 9 7 0 - 8 4 p e r i o d — 5 9 7 ,5 0 0 — d u r i n g t h e r e c e s s i o n in 1 9 8 2 .

e m p lo y e e h o u rs.

A fte r

P r o d u c t i v i t y g a i n s w e r e g r e a t e s t in t h e v e n e e r a n d

th o u g h

p l y w o o d m ills s e c t o r w h e r e o u tp u t p e r e m p l o y e e h o u r

1982,

e m p lo y m e n t

b egan

to

in c r e a s e

th e r e w a s a d e c lin e b e tw e e n

a g a in ,

1984 and

a l­

1985.

9 U.S. Department of Commerce, Bureau of Industrial Economics,
Office of Research, Analysis and Statistics. 1982 is the latest year for which
these data are available.

s1985 U.S. Industrial Outlook (U.S. Department of Commerce, Inter­
national Trade Administration, January 1985) pp. 4-14.




a g a in . E m p l o y m e n t r e a c h e d it s h i g h e s t l e v e l in

1 9 7 9 — 7 6 7 , 0 0 0 — th e n d e c li n e d t o it s l o w e s t p o in t o f th e

11

Chart 3.

Wood kitchen cabinets: Output per employee hour and related data,
1972-83

Ratio scale (1977 = 100)

1972

Ratio scale (1977 = 100)

1974

1976

1978

Source: Bureau of Labor Statistics.




12

1980

1982 1983

Chart 4.

Veneer and plywood mills: Output per employee hour and related data,
1970-84

Ratio scale (Index, 1977 = 100)

Ratio scale (Index, 1977 = 100)

140
130

140
130

120
110

120
— 110

—

—|

Employee hours

100

100

90

90

80

80

70

70

60

1
1970

i.

I

i

1972

J ___ L

J__ 1 1 __1 _ L J __1 _ L
__ __1 _
_

1974

1976

1978

Source: Bureau of Labor Statistics.




13

1980

1982

1984

60

Chart 5.

Employment in lumber and wood products, 1970-85, and projections,
1985-95

Employees (thousands)

Employees (thousands)

'Compound interest method.
2
See text footnote 9.
Source: Bureau of Labor Statistics.




14

group) and some of the most unskilled laborers who
move stock and other materials by hand.
Employment declines are projected for several oc­
cupations, the most important of which is the group of
forestry and logging occupations: Choke setters, fellers
and buckers, forest and conservation workers, logging
tractor operators, log gridders and scalers, and log han­
dling equipment operators. This group, which consti­
tuted 10 percent of 1984 industry employment, is pro­
jected to decline in size by almost 10 percent by 1995.
Declines are also projected for administrative support
personnel (which includes clerical occupations); serv­
ice occupations; and occupations involved with trans­
portation, material moving, and vehicle operations. The
declining occupational groups account for about 27 per­
cent of employment.
Industry sources indicate that demand is high for sev­
eral logging and sawmill occupations. In the logging
portion, there is need for mechanics who can maintain
feller bunchers, skidders, and other logging vehicles;
and for skilled feller buncher and skidder operators (but
not for chainsaw operators). Maintenance operations in
sawmills are becoming more specialized. The “general
handyman” maintenance worker is no longer sufficient
in modern sawmills. Demand is particularly strong for
electrical and electronic maintenance workers, for
whom an understanding of solid-state electronics has
become increasingly important.

According to BLS projections, the outlook is for em­
ployment to remain almost flat, growing by an average
annual rate of only 0.3 percent.1
0
Production worker employment increased at an an­
nual rate of 0.4 percent a year from 1970 to 1985. The
pattern of increases and declines was similar to that for
all employees, although the proportion of production
workers has declined for the total industry and the sec­
tors discussed in this report.
Employment for the logging portion of this industry
rose from 70,300 in 1970 to 82,700 in 1985—an average
annual increase of 1.1 percent. Employment declined
slightly in 1971 and 1972, turned upward in 1973, and
then remained fairly high (except for drops in 1975 and
1982) through 1984. The decline in the proportion of
production workers to total employment was most pro­
nounced in this sector—declining from 86 percent to
80 percent.
Sawmills and planing mills accounted for about 28
percent of industry employment in 1985, or 195,800
workers. This represents a decline averaging 0.6 per­
cent a year from 1970. Employment has been particu­
larly weak since 1980, with a number of mills closing
due to poor market conditions.
The millwork, plywood, and structural members por­
tion, which includes millwork, wood kitchen cabinets,
and plywood and veneer mills, has grown slightly in
importance within the wood products industry. Em­
ployment grew from 197,400 in 1972 (the first year for
which separate employment data are available) to
231,300—or at an average rate of 1.2 percent a year.
The proportion of industry employment increased from
27 percent in 1972 to 33 percent in 1984.

Adjustment of workers to technological change

Occupations

BLS projects an increase in employment in most of
the major occupational groups between 1984 and 1995.
Employment increases of about 10 percent or more are
anticipated for managerial and engineering occupations,
construction trades, precision production occupations,
and skilled handworking occupations—which, together,
accounted for 26 percent of 1984 employment. Smaller
increases are projected for technicians; mechanics,
installers, and repairers; machine setters, set-up opera­
tors, operators, and tenders; and laborers and material
moving helpers. This group, accounting for 40 percent
of industry employment, contains several important
woodworking occupations: Head sawyers; operators,
set-up operators, and tenders for sawing machines and
woodworking machines; machine feeders; and people
who move material by hand. Employment increases are
projected for all of these individual ocupations except
head sawyers (one of the highest skilled jobs in this
10 For details on assumptions and methodology used to develop these pro­
jections, see the M o n th ly L a b o r R e v ie w , November 1985.




15

There appears to be little specific emphasis on ad­
justment to technological change in this industry. The
emphasis is primarily on increasing productivity,
whether within the framework of collective bargaining
contracts or through more informal company programs.
Union representation is strong in some parts of the
country—mainly in the West and Northwest where the
International Woodworkers of America is the predomi­
nant union. Seniority is the principal form of job secu­
rity in IWA contracts. Retirements, layoffs and recalls,
plant closings, transfer rights, and training opportuni­
ties are based primarily on seniority, or on a combina­
tion of seniority and skill qualifications.
The IWA also proposes a cooperative union-manage­
ment program to increase productivity and save jobs.
This program involves worker participation in solving
problems of safety, productivity, quality, and service.
Joint committees would be staffed by union and man­
agement personnel, and decisions would be reached by
consensus. The program also involves financial rewards
for workers when cost savings result from these
proposals.
Union-management committees have been established
in several wood products mills and plants; some have
been in operation for a decade or more. A union-man­
agement committee was begun in the 1970’s by an IWA

2 - y e a r tr ia l p e r io d , h a s b e e n r e n e w e d .11

lo c a l a n d t h e m a n a g e m e n t o f a h a r d w o o d lu m b e r a n d
v e n e e r s a w m ill. T h e p r o b le m s o n w h ic h th is c o m m it ­

T h e r e is l i t t l e u n i o n r e p r e s e n t a t i o n in t h i s i n d u s t r y in

t e e h a s w o r k e d in c lu d e j o b tr a in in g a n d im p r o v e m e n t s

th e S o u th . In th is a r e a , la b o r c o s t s a r e g e n e r a ll y lo w e r ,

in p r o d u c t i v i t y a n d p r o d u c t q u a l i t y . T h e p l a n t a l s o d e ­

a n d th e r e m a y b e le s s e ff o r t b y m ills t o s u b s titu te a u ­

v e l o p e d a p la n in

1982 to p r o v id e e m p lo y e e b o n u s e s

to m a te d a n d m e c h a n iz e d e q u ip m e n t fo r la b o r . I n th is

fo r o u tp u t im p r o v e m e n t s . A n o t h e r I W A lo c a l a n d s a w ­

e n v ir o n m e n t, in d iv id u a l c o m p a n ie s ( w h ic h s o m e tim e s

m ill m a n a g e m e n t c o m m it t e e m a d e p r o v is io n fo r p la n t

m e a n s in d iv id u a l m ills ) m a k e th e ir o w n p o lic ie s c o n ­

e m p l o y e e s t o h a v e a v o i c e in a c o m p a n y d e c i s i o n t o

c e r n in g tr a in in g , la y o f f s a n d r e c a lls , e t c . O n e la r g e c o m ­

a c q u ir e a c o m p u t e r .

p a n y w it h s e v e r a l s o u th e r n s a w m ills h a s a n e m p lo y e e

A lo c a l c h a p te r o f th e U n ite d B r o th e r h o o d o f C a r ­

in v o lv e m e n t p r o g r a m w h ic h g iv e s e a c h e m p lo y e e s e v ­

p e n te r s a n d J o in e r s o f A m e r ic a d e v e lo p e d a n e m p lo y e e

e r a l o p p o r tu n itie s e a c h m o n t h t o d is c u s s p r o b le m s o r

i n v o l v e m e n t p la n w i t h a m a n u f a c t u r e r o f w o o d d o o r s

id e a s w it h f e llo w

a n d p l y w o o d p r o d u c t s in 1 9 8 1 . T h i s p r o g r a m a c c o m ­

c ir c le m e e t in g s a r e u s e d , a s w e ll a s in fo r m a l o n e - t o - o n e

p l i s h e d a r e d u c t i o n in m a t e r i a l s c o s t s a n d i n c r e a s e d p r o ­

m e e t in g s

d u c t iv it y a n d q u a lity , a s w e ll a s p a y in g b o n u s e s t o e m ­

s u p e r v is o r .

p l o y e e s in 1 9 8 2 . T h e p r o g r a m r e q u i r e s a c o m m i t m e n t

11U .S. Department o f Labor, R esou rce G uide to L abor-M an agem en t
C ooperation (October 1983), pp. 36, 53, 96.

o f tim e a n d e ffo r t fr o m e v e r y o n e in v o lv e d a n d , a fte r a

b e tw e e n

e m p lo y e e s a n d s u p e r v is o r s . Q u a lit y

each

e m p lo y e e

and

h is

or

her

SELECTED REFEREN CES
Bryan, Richard W. “ New Equipment Boosts Productivity by 30 Per­
cen t,” F o rest In d u stries, M arch 1982, p. 28.

U .S. Departm ent o f C om m erce, International Trade Adm inistration.
1985 U.S. In d u s tria l O u tlo o k . January 1985, pp. 4-1 to 4-16.

D u ke, John and C lyd e Huffstutler. “P roductivity in Saw m ills In­
creases as Labor Input D eclin es Substantially,” M o n th ly L a b o r R e ­
view, April 1977, pp. 33-37.

U .S.

Farris, Mary Robinson. “ The Veneer and Plywood Industry: AboveAverage Productivity G ains,” M onthly L a b o r R e v ie w , September 1978,
pp. 26-30.

V eigle, Jack and H orst Brand. “M illw ork Industry S h o w s S lo w
G row th in P rod u ctivity,” M o n th ly L a b o r R e view , Septem ber 1982,
pp. 21-26.

Friesen, John. “Self-loading Skidder A ids P roductivity Increase,”
L o g g in g a n d S a w m illin g Jo u rn a l, M arch 1984, pp. 14-16.

W estergaard, Bob. “L o g Preparation,” L o g g in g a n d S a w m illin g Jo u r­
nal, January 1983, pp. 21-23.

“P ly w o o d M anufacturing Is M ore Precise, Thanks to Com puters,”
F o rest In d u stries, April 1983, p. 23.

Whitney, Tony. “ Grapple Yarder Combines Speed With Distance,”
L o g g in g a n d S a w m illin g Jou rn al, A u gust 1984, pp. 12-13.

U .S. Congress, O ffice o f T ech n o lo g y A ssessm ent. W ood Use: U.S.
C o m p etitiven ess a n d Technology. O T A -IT E -210, A ugust 1983.




Department o f Labor, R esou rce G uide to L abor-M an agem en t

C ooperation , O ctober 1983.

16

Chapter 2. Footwear

Summary

w o r k e r s in t h i s in d u s t r y . S o m e c o n t r a c t s a l s o h a v e s p e ­
c ia l p r o v is io n s t o d e a l w it h th e m a n y la y o f f s r e s u ltin g

T h e f o o t w e a r in d u s tr y (S I C 3 1 4 ) r e m a in s h ig h ly c o m ­

f r o m p la n t s h u t d o w n s .

p e t i t i v e , b u t it a l s o h a s b e c o m e m o r e c o n c e n t r a t e d w i t h
t h e c l o s i n g o f m a n y s m a l l e r p la n t s . T w e n t y - t h r e e f ir m s ,
o r l e s s th a n 1 0 p e r c e n t o f th e to t a l, p r o d u c e d a b o u t h a l f o f

Industry Structure

th e in d u s t r y ’s f o o t w e a r in 1 9 8 4 .
W ith

s o m e e x c e p tio n s , th e a d o p tio n

o f a u to m a te d
A lt h o u g h th e f o o t w e a r in d u s tr y 2 r e m a in s h ig h ly c o m ­

m a c h in e r y h a s n o t a d v a n c e d r a p id ly , a n d t h e o u t lo o k
is n o t m u c h m o r e p r o m i s i n g in v i e w

p e t it iv e , t h e la r g e s t fir m s h a v e c o n s o lid a t e d th e ir c o m ­

o f th e h ig h c o s t

p e t it iv e p o s it io n d u r in g t h e p a s t 10 y e a r s a n d n o w a c ­

o f e q u ip m e n t a n d g r o w in g im p o r ts . N e v e r t h e le s s , s o m e

c o u n t f o r a s u b s t a n t i a l s h a r e o f t h e i n d u s t r y ’s o u t p u t .

t e c h n o lo g ie s a r e g a in in g a c c e p t a n c e . F o r e x a m p le , th e
d i f f u s i o n o f c o m p u t e r - a i d e d d e s i g n is e x p e c t e d

W h ile n o s in g le fo o t w e a r m a n u fa c tu r e r a c c o u n ts fo r

to in ­

m o r e th a n 8 p e r c e n t o f to ta l f o o t w e a r o u tp u t, th e in ­

c r e a s e s t e a d ily a s a r e s u lt o f th e d e v e lo p m e n t o f s m a ll,
c o s t-e ffe c tiv e

c o m p u ters.

S im ila r ly ,

d u s t r y h a s b e c o m e m o r e c o n c e n t r a t e d a s 2 3 fir m s , o r

m ic r o p r o c e s ­

le s s th a n 10 p e r c e n t o f th e to ta l, p r o d u c e d a b o u t h a lf

s o r - c o n t r o l l e d m a c h i n e s in s e v e r a l p r o c e s s e s t h a t a r e

o f t h e i n d u s t r y ’s f o o t w e a r in 1 9 8 4 . S o m e o f t h e l a r g e s t

h i g h l y la b o r i n t e n s i v e a r e a l s o l i k e l y t o b e a d o p t e d r a ­

m a n u fa c tu r e r s a ls o o w n a n d o p e r a te m a n y r e ta il f o o t ­

p i d l y , a t l e a s t b y t h e l a r g e r f ir m s .
O u t p u t o f f o o t w e a r in

w e a r e s t a b l i s h m e n t s . M o s t o f t h e f i r m s a r e v e r y s m a ll:

1 9 8 4 w a s a b o u t 3 0 0 m illio n

A b o u t 7 0 p e r c e n t o f t h e fir m s a c c o u n t fo r le s s th a n

p a ir s , t h e s m a l l e s t q u a n t i t y s i n c e t h e e a r l y 1 9 3 0 ’s . I m ­

o n e -f ift h o f to ta l o u tp u t. S in c e 1 9 6 5 , w h e n th e n u m b e r

p o r t s g r e w s u b s t a n t i a l l y in a l l b u t 3 y e a r s d u r i n g 1 9 7 0 -

o f p la n ts p e a k e d a t 9 9 0 , a g r e a t n u m b e r o f c lo s in g s h a v e

8 4 . T h e im p o r t p e n e tr a tio n r a tio 1 m o r e th a n d o u b le d ,

r e d u c e d th e to t a l, t o a b o u t 4 5 0 p la n ts in 1 9 8 4 .

f r o m 3 0 p e r c e n t in 1 9 7 0 t o 6 3 p e r c e n t in 1 9 8 3 t o a n e s ­

M a n u f a c t u r i n g p l a n t s f o r f o o t w e a r a r e l o c a t e d in 4 1

t i m a t e d 7 2 p e r c e n t in 1 9 8 4 .

S t a t e s in a ll r e g i o n s o f t h e c o u n t r y . A m o n g t h e S t a t e s ,

P r o d u c t iv it y in c r e a s e d v e r y s lig h t ly o v e r t h e p e r io d
1 9 7 0 -8 4 , a s o u tp u t a n d e m p lo y e e h o u r s fe ll a t a lm o s t

M a in e a c c o u n t s fo r th e h ig h e s t p r o p o r tio n (1 2 p e r c e n t)

th e s a m e r a te . In th e p e r io d

1 9 8 0 -8 4 , p r o d u c t iv it y a d ­

o f t o t a l o u t p u t . A b o u t 2 5 p e r c e n t o f d o m e s t i c o u t p u t is

v a n c e d a t a n a v e r a g e a n n u a l r a t e o f 1 .4 p e r c e n t , w i t h

p r o d u c e d in t h e N e w E n g l a n d S t a t e s , a b o u t 4 5 p e r c e n t
in t h e N o r t h C e n t r a l a n d M i d d l e A t l a n t i c S t a t e s , a n d

a s h a r p e r d e c l i n e in e m p l o y e e h o u r s t h a n in o u t p u t .

a p p r o x i m a t e l y 3 0 p e r c e n t in t h e S o u t h a n d W e s t .

C a p it a l e x p e n d i t u r e s ( in c o n s t a n t 1 9 7 2 d o l l a r s ) a v e r ­

In r e c e n t y e a r s , t h e la r g e r fir m s h a v e c o n c e n t r a t e d

a g e d $ 3 4 m illio n a n n u a lly d u r in g 1 9 7 0 -8 2 , v ir t u a lly th e

p r o d u c t i o n o f c e r t a i n s h o e p a r t s in s e p a r a t e p la n t s . S u c h

s a m e a v e r a g e o u t l a y a s in 1 9 6 0 - 7 0 , b u t t h e t r e n d f o r t h e

s p e c ia liz a t io n h a s e n a b le d th e fir m s t o in s ta ll m o r e a d ­

i m m e d i a t e y e a r s a h e a d is u n c e r t a i n .

v a n c e d m a c h in e s fo r v o lu m e p r o d u c tio n .

D u r in g 1 9 7 0 -8 5 , e m p lo y m e n t d e c lin e d r a p id ly , a t a n

S o m e s h o e c o m p a n ie s a r e p u r c h a s in g s o le s p r o d u c e d

a n n u a l r a t e o f 4 . 0 p e r c e n t . I n 1 9 8 5 , a n a v e r a g e o f 9 9 ,9 0 0

o u t s i d e o f t h e s h o e m a n u f a c t u r i n g in d u s t r y . T h e s e s o l e s ,

p e r s o n s w e r e w o r k i n g in f o o t w e a r m a n u f a c t u r i n g , t h e
s m a l l e s t n u m b e r in a n y y e a r s i n c e

know n

1 9 3 9 (e a r lie s t d a ta

sh o e

a v a ila b le ). T h e B u r e a u o f L a b o r S ta t is t ic s p r o je c t s c o n ­

1 9 8 5 - 9 5 , w i t h e m p l o y m e n t in

m easu re

of

jo b

and

c e m en ted

to

sh o e

u p p ers,

th e s h o e fa c to r y . A b o u t o n e -fo u r th o f d o m e s tic s h o e s

1995 25 p ercen t

a r e m a d e w i t h s u c h u n it b o t t o m s .

l o w e r t h a n in 1 9 8 5 .
A

“ u n it b o t t o m s , ” a r e p u r c h a s e d b y

t h e r e b y e l i m i n a t i n g l a b o r w h i c h w o u l d b e r e q u i r e d in

t i n u a t i o n o f t h e s h a r p e m p l o y m e n t d e c l i n e in f o o t w e a r
d u r in g

a s m o ld e d

m a n u fa c tu r e r s

s e c u r ity

is

p r o v id e d

by

S o m e 1 0 0 f o o t w e a r m a n u fa c tu r e r s a r e a ls o im p o r te r s ,

th e

w h o c o n t r a c t fo r th e m a n u fa c tu r e o f s h o e s o r p a r ts o f

p l a n t w i d e s e n i o r i t y w h i c h p r e v a i l s in l a b o r - m a n a g e m e n t
c o n tr a c ts c o v e r in g b e tw e e n 25 a n d 5 0 p e r c e n t o f th e

1 Imports as a percent o f dom estic production plus imports minus
exports.




17

2 T he industry (SIC 314) covers all nonrubber footw ear. It includes
w om en ’s footw ear, m en’s footw ear, all other nonrubber footw ear,
and house slippers.

s h o e s in f o r e i g n c o u n t r i e s . 3 I n 1 9 8 3 , t h e i m p o r t s o f t h e s e

c o m p u t e r i z e d t e c h n o l o g i e s in t h e i n d u s t r y s t i l l c o n s i s t

U .S . fir m s r e p r e s e n t e d

o f o n ly o n e o r a f e w

a b o u t o n e -th ir d

o f to ta l sh o e

im p o r t s .

CAM

d is tin c t a p p lic a tio n s o f C A D

fu n c tio n s . T h e a p p lic a tio n s o f C A M

or

u s u a lly e n ­

ta il s t a n d - a l o n e m a c h i n e s t h a t p e r f o r m a s i n g l e o p e r a ­
tio n , a lt h o u g h a s m a ll n u m b e r o f th e la r g e r fir m s h a v e

Technology in the 1980’s
The

d iffu s io n

w id e s p r e a d

in

o f a u to m a tic
th is

in d u s t r y .

c o n tr o ls

has

C o m p u te r

jo in e d
not

b een

ty p e s

of CAM

e q u ip m e n t

w ith

th e ir

o p e r a t i o n is e x p e c t e d t o r e c e i v e s o m e w h a t g r e a t e r e m ­

c o n tr o ls ,

p h a s i s in t h e f u t u r e b y t h e l a r g e s t c o m p a n i e s .

m ic r o p r o c e s s o r c o n tr o ls , a n d n u m e r ic a l c o n tr o ls h a v e
b e e n a d o p t e d b y o n l y a s m a ll p r o p o r t i o n o f t h e i n d u s ­

Computer-aided design.

t r y , p r i m a r i l y t h e la r g e r f ir m s . T h e i n c e n t i v e t o a u t o ­

T h e u s e o f C A D in d e s i g n i n g

a n d p a t t e r n g r a d i n g r e d u c e s u n it l a b o r r e q u i r e m e n t s a n d

m a t e is l e s s e n e d b y t h e h i g h c o s t o f s u c h m a c h i n e r y ,

im p r o v e s q u a lity . M o s t m o d e r n f o o t w e a r C A D s y s t e m s

t h e f r e q u e n t c h a n g e s in s h o e s t y l e s , a n d t h e g r o w t h in

u t i l i z e s i m i l a r m o d e s o f o p e r a t i o n . I n t h e in i t i a l d e s i g n

im p o r ts o f s h o e s a n d p a r ts o f s h o e s . T h e fa c t th a t m o s t

o p e r a t i o n , t h e la s t , a t h r e e - d i m e n s i o n a l f o r m w h i c h r e p ­

d o m e s t ic s h o e f a c t o r ie s w o r k o n ly o n e s h ift c a n a ls o

r e se n ts th e fo o t o n w h ic h

m a k e th e p u r c h a s e o f a u to m a te d e q u ip m e n t d if fic u lt to

t h e s h o e is c o n s t r u c t e d , is

n u m e r ic a lly d e fin e d b y “ d ig it iz in g ” th e su r fa c e o f th e

ju s tif y .

la s t . T h r o u g h t h e u s e o f s p e c i a l c o m p u t e r s o f t w a r e , t h i s

M i c r o p r o c e s s o r - c o n t r o l l e d i n s t r u m e n t s ( M C I ’s ) c o n ­

is t u r n e d i n t o a t w o - d i m e n s i o n a l s u r f a c e . A

t r o l f u n c t i o n s in a n y p r o g r a m m a b l e s e q u e n c e a n d h a v e

of

e x te n s iv e

r e la y

c o n tr o ls ,

or

fo o tw e a r

d e s ig n e r , u s in g a g r a p h ic c a t h o d e r a y tu b e ( C R T ) , d e ­

s e v e r a l o p e r a t i n g a d v a n t a g e s o v e r a n in s t r u m e n t c o m ­
p r is e d

several

C A D . T e c h n o lo g y th a t c o m b in e s m o r e th a n a s in g le

s ig n s a n e w p a tte r n s t y le o n th e tw o -d im e n s io n a l su r ­

m e c h a n ic a l

fa c e , w h ic h c a n b e e a s ily m o d if ie d o n th e C R T d u r in g

s w it c h e s th a t c o n tr o l e le c tr ic a l c u r r e n t. A n M C I , c o n ­

th e d e v e lo p m e n t p r o c e ss .

s is tin g o f a la r g e - s c a le in te g r a te d c ir c u it o r a s e t o f in ­
te g r a te d

c ir c u its , p e r fo r m s th e fu n c t io n s o f a c e n tr a l

p r o c e s s i n g u n it a n d m a y b e u s e d in c o m b i n a t i o n w i t h
s e n s o r d e v i c e s . H o w e v e r , in f o o t w e a r m a n u f a c t u r e , t h e
c o s t e f f e c t i v e n e s s o f M C I ’s d e p e n d s o n h o w e x t e n s i v e
t h e t o o l in g ( w o r k - h o ld in g d e v ic e s ) r e q u ir e m e n ts a r e fo r
a p a r tic u la r o p e r a tio n .
T h e p r i n c i p a l i m p r o v e m e n t s w i t h t h e u s e o f M C I ’s
a r e u s u a l l y a p p a r e n t in t h e r e d u c t i o n o f m a c h i n e s e t u p
t i m e a n d a r e a s s o c i a t e d w i t h l o w e r u n it l a b o r r e q u i r e ­
m e n ts . M a te r ia ls s a v in g s a n d e n e r g y c o n s e r v a t io n a r e
a d d itio n a l b e n e fits .
M o r e o v e r , o p e r a t o r s c a n a d a p t q u i t e r e a d i l y t o M C I ’s.
T h e M C I o ft e n h a s a p r o g r a m m a b le c o n t r o lle r , a n d th e
m a c h i n e ’s o p e r a t o r o n l y n e e d s t o s e l e c t a c o m b i n a t i o n
o f l e t t e r s a n d n u m b e r s in o r d e r t o m a k e c h a n g e s . I n
a d d it io n , th e v a r ia b le s o f a p r o c e s s u s u a lly o n ly r e q u ir e
th e m o n ito r in g o f m e a s u r e m e n ts th a t a re o n c o n tin u o u s
d i s p l a y . T h e M C I is s i m p l e r t h a n a n e t w o r k o f r e l a y
c o n t r o l s , w h i c h m a y r e q u ir e c o n s i d e r a b l e l a b o r f o r w i r ­
in g , d e b u g g in g ,

and

m a in te n a n c e .

H ow ever,

m a in te ­

n a n c e p e r s o n n e l u s u a lly n e e d a k n o w le d g e o f e le c t r o n ic s
t o m a i n t a in M C I e q u i p m e n t .

Footwear designer using 3D color computer-aided design system.

T h e m a jo r t e c h n o l o g ie s , th e ir la b o r im p a c t, a n d th e ir
d i f f u s i o n a r e s u m m a r i z e d in t a b l e 2.

A f t e r a n e w s t y l e is a c c e p t e d a n d d e v e l o p e d f o r p r o ­

Computer-aided systems

d u c tio n , th e p a tte r n m u s t b e “ g r a d e d ,” in v o lv in g th e

C o m p u t e r - a i d e d s y s t e m s in f o o t w e a r m a n u f a c t u r i n g

p r o d u c tio n

i n v o l v e a p p lic a tio n s o f c o m p u t e r -a id e d d e s ig n ( C A D )

o f p a t t e r n s f o r a ll t h e d i f f e r e n t s i z e s a n d

w i d t h s in w h i c h

a n d c o m p u t e r - a id e d m a n u f a c tu r in g ( C A M ) . M o s t o f th e

th e f o o t w e a r w ill b e m a n u fa c tu r e d .

W h e r e a s m a n u a l g r a d in g b y s p e c ia lis ts c o u ld

r e q u ir e

se v e r a l w e e k s , th e p r o d u c tio n o f p a tte r n s o n th e C A D
3 United States International Trade Com m ission, Nonrubber Foot­

wear, U S IT C Publication 1545, July 1984, p. A - 16.




s y s te m c a n b e a c h ie v e d w ith in h o u r s, a n d w it h g r e a te r
accuracy.

18

Table 2. M ajor technology changes in foo tw ear
Description

Technology

Diffusion

Labor implications

Computer-aided design (CAD)

Shoe styles can be depicted rapidly Unit labor requirements can be
on a screen. CAD is also used to
greatly reduced compared to the
manual process.
derive measurements for com­
ponent parts of a shoe prior to its
production.

Computer-controlled stitching

Most advanced stitching is on A productivity inrease of at least 25 Diffusion during the next 5-10 years
m icroprocessor-controlled ma­
percent is associated with some
is expected to increase, as new
chines. The machines— used for
decline in employment and re­
machines with improved stitch
functional and fancy stitching—
placement of skilled workers by
quality and functional capability
stitch automatically with plug-in
are developed.
semiskilled operators. A mechanic
modules that contain stitching
can often become qualified to pro­
patterns.
gram the modules.

Numerically controlled (NC) upper
roughing machine

NA machine automatically directs a
brush in roughing part of the shoe
upper to provide a base for
cementing.

Forepart pulling and lasting machine,
with microprocessor control

Automatic size determination and Unit labor requirements and skill Increased use is expected by larger
and medium-sized firms during the
positioning assure precise cement­
requirements of operators are re­
ing of upper to the insole.
duced. Programming can be easi­
next 5 years.
ly mastered by workers with ex­
perience in lasting.

Injection molding machine with micro­
processor control

Automatically molds a shoe bottom Injuction molding eliminates steps Moderate expansion in use expect­
from thermoplastic or polyure­
and is therefore much less labor
ed, especally among large and
thane to the upper. Machine
intensive. Automatic loading fea­
medium-sized firms during the next
parameters— e.g., temperature—
ture may eliminate one operator
5 years.
can be set through simple digital
on a molding machine.
input.

Sole laying press

Machine automatically determines
the contour of shoe's bottom and
adjusts for heel height to assure
that shoe is accurately positioned
before permanent attachment of
sole to shoe bottom.

Unit labor requirements are slightly
lower than for manual roughing,
since operator may perform other
work after machine is set in mo­
tion. Operator skill requirements
reduced.

Used by 45 firms; use is expected
to grow with small, cost-effective
computers.

Rapid diffusion anticipated, espe­
cially among larger firms.

Less operator skill is required, and Continued diffusion from current level
of about 15 percent is likely during
quality'of output is improved over
the next 5 years.
that of machines without auto­
matic adjustments.

in t h e i r p la n t s , a n d t h e

e it h e r c a n n o t a ffo r d o r p r e fe r n o t t o a s s u m e th e c o s t o f

t e c h n o l o g y ’s d i f f u s i o n is e x p e c t e d t o i n c r e a s e s t e a d i l y

s u c h c a p i t a l o u t l a y s . O n l y t w o l a r g e f i r m s in a 1 9 8 3

w ith in th e n e x t 5 y e a r s a s a r e su lt o f a r e c e n t v e r y sh a r p

s u r v e y o f s h o e m a n u f a c t u r e r s p la n n e d t o i n v e s t in t w o

A b o u t 4 5 fir m s h a v e C A D

d e c l i n e in t h e p r i c e o f c o m p u t e r s . I t is e s t i m a t e d t h a t

n e w ly a v a ila b le c o m p u t e r -c o n tr o lle d t e c h n o lo g ie s fo r

t h e n u m b e r o f fir m s w it h C A D

m o r e th a n tr ip le d b e ­

m a k in g m o ld s a n d la s ts , w h ic h e n ta il v a r io u s s h a p in g

t w e e n 1 9 8 3 a n d 1 9 8 5 , a s fir m s in s ta lle d s m a ll, b u t p o w ­

o p e r a t i o n s 4. I n a d d i t i o n , c o m p u t e r - c o n t r o l l e d m a c h i n ­

er fu l a n d

e a r ly

e r y is n o t a v a i l a b l e ( o r e l s e n o t t h o r o u g h l y p r o v e n ) in

w a s lim ite d t o la r g e fir m s, fu r th e r

a g r e a t n u m b e r o f th e s till s e p a r a te fu n c t io n s th a t m a k e

i n v e s t m e n t in t h e t e c h n o l o g y is e x p e c t e d t o t a k e p l a c e

u p s h o e m a n u fa c tu r in g . F o r e x a m p le , th e m in ic o m p u ­

a m o n g s o m e m e d i u m - s iz e d a n d e v e n s m a ll m a n u f a c tu r e r s .

t e r - c o n t r o l l e d k n i f e h a s r e c e i v e d l i m i t e d a p p l i c a t i o n in

c o s t-e ffe c tiv e

y ears, w h e n C A D

co m p u ters.

U n lik e

th e

c u t t i n g s y n t h e t i c m a t e r ia l s .

Computer-aided manufacture.

The

d a t a a n d t a p e s d e v e l o p e d in t h e C A D
u sed

in

m a n u f a c tu r in g

p ro cesses,

p a tte r n

g r a d in g

Computer-controlled stitching.

p ro cess can be
in c lu d in g

The

m ost

advanced

s titc h in g m a c h in e r y is u s u a lly c o n t r o lle d b y m ic r o p r o c e s s o r -

com ­

p u te r -c o n tr o lle d c u tt in g a n d s titc h in g . H o w e v e r , m o s t
fir m s, w it h th e e x c e p t io n o f th e la r g e s t, h a v e p u r c h a s e d
4
Footwear Industries o f America, Survey o f the S tate o f the A rt in F oot­
w e a r M anufacturing a n d Identification P rio rities a n d M echanism s to
A ccelera te the D evelopm en t a n d A pplication o f A dv a n c ed Technology in
the U.S. F ootw ear M anufacturing Industry, Vol. 1 (Philadelphia, FIA, April

o n ly lim ite d t y p e s o f c o m p u t e r - a id e d m a c h in e r y . A s a n
a lt e r n a tiv e , b u s in e s s e n te r p r is e s k n o w n a s “ s e r v ic e b u ­
r e a u s ” a r e a v a ila b le to p e r fo r m

th e c u ttin g (a n d th e

1983), p. 22.

p a tte r n g r a d in g ) s e r v ic e fo r m a n y m a n u fa c tu r e r s w h o




19

b a s e d c o m p u t e r s . T h e o p e r a t io n s in c lu d e m a j o r f u n c t io n a l

b o th

s t it c h in g s u c h a s v a m p in g (a t ta c h m e n t o f th e v a m p o r fr o n t

u tiliz in g te m p la te s , in c lu d in g th e p o s s ib ilit y o f o p e r a t ­

p a r t o f a s h o e ’s u p p e r to th e q u a r te r o r b a c k p a r t), a s w e l l

in g o n a w id e r r a n g e o f s h o e ty p e s a n d g r e a te r sp e e d

a s f a n c y d e s i g n s t it c h in g .

m o d u le s th a t c o n ta in

s t itc h in g

it y o f r o u g h in g c a n a ls o im p r o v e th e p r o c e s s o f s o le

p a tte r n s. T h e

a tta c h m e n t w h ic h fo llo w s .

m o d u le s , t e c h n ic a lly id e n tifie d a s e r a s a b le -p r o g r a m m a b le - r e a d -o n ly - m e m o r y

a n d th e a u to m a tic m a c h in e

in s h i f t i n g f r o m o n e s h o e s t y l e t o a n o t h e r . B e t t e r q u a l ­

T h e s e m a c h in e s s t it c h a u t o m a t ic a lly a n d r a p id ly w it h
p lu g -in

th e m a n u a l m e th o d

(E P r o m )

card s,

can

be

U n it la b o r r e q u ir e m e n ts a r e s lig h t ly lo w e r fo r r o u g h ­

pro­

in g w it h th e N C m a c h in e th a n w it h th e m a n u a l p r o c ­

g r a m m e d d ir e c t ly o n th e m a c h in e . A n o p e r a to r lo a d s

e s s , in D a rt b e c a u s e o f t h e d e c r e a s e in t h e n u m b e r o f

w o r k p ie c e s a n d p u sh e s a b u tto n , a n d th e E P r o m ca rd

d a m a g e d s h o e s . S h o e s a r e s o m e t i m e s d a m a g e d in t h e

c a r r ie s o u t a n o p e r a tio n a u to m a tic a lly fo r a w h o le r a n g e

m a n u a l p r o c e s s w h e n th e o p e r a to r h o ld s a s h o e in c o r ­

o f f o o t w e a r s iz e s . F o o t w e a r m a n u fa c tu r e r s c a n p u r c h a s e

r e c t l y in a p p l y i n g it t o t h e r o t a t i n g b r u s h . A l s o , u n it

f r o m t h e m a c h i n e ’s m a n u f a c t u r e r e i t h e r t h e e q u i p m e n t

la b o r r e q u ir e m e n ts m a y b e lo w e r w it h th e N C m a c h in e

t o m a k e p r o g r a m s in - h o u s e o r th e s o f t w a r e .

b e c a u s e , in s o m e c a s e s , t h e o p e r a t o r p e r f o r m s o t h e r

C o m p u t e r s t i t c h i n g in v a m p i n g r e d u c e s u n it l a b o r r e ­
q u ir e m e n ts a n d

im p r o v e s th e q u a lity

w o r k a f t e r t h e m a c h i n e is s e t in m o t i o n .

o f th e p r o d u c t

A n o p e r a t o r w it h lim ite d j o b e x p e r ie n c e c a n q u ic k ly

th r o u g h g r e a te r a c c u r a c y a n d c o n s is te n c y . In c o n tr a s t,

le a r n t o u s e t h e N C m a c h i n e . W h i l e m a i n t e n a n c e o f t h e

o ld e r c o n v e n tio n a l p r o c e s s e s o f v a m p in g a re v e r y la ­

N C m a c h i n e is n o t s i m p l e , a d i g i t a l r e a d o u t s c r e e n d o e s

b o r i n t e n s i v e . I t is e s t i m a t e d

in d ic a te th e s ite o f a n y o p e r a tio n a l p r o b le m .

th a t c o m p u t e r s titc h in g

u s e d f o r l o n g p r o d u c t i o n r u n s r e s u l t s in a p r o d u c t i v i t y

O v e r th e n e x t 5 to 10 y e a r s, th e n u m b e r o f N C u p ­

in c r e a s e o f at le a s t 2 5 p e r c e n t. H o w e v e r , t h e s e m a c h in e s

p e r r o u g h i n g m a c h i n e s is e x p e c t e d t o i n c r e a s e s h a r p l y ,

a re n o t e ffic ie n t fo r s h o r t p r o d u c tio n ru n s b e c a u s e o f

p a r tic u la r ly a m o n g la r g e r fir m s , fr o m th e s m a ll n u m b e r

th e c o s ts in v o lv e d .

c u r r e n t l y in o p e r a t i o n .

S o m e d ilu tio n

o f s k ill r e q u ir e m e n ts p e r m its s k ille d

Forepart pulling and lasting machine with
microprocessor control

w o r k e r s to b e r e p la c e d b y s e m is k ille d w o r k e r s . In c e r ­
t a in p la n t s , a m e c h a n i c w i t h a h i g h s c h o o l e d u c a t i o n
p lu s s o m e a d d it io n a l m a t h e m a tic s c a n q u a lify fo r th e

T h is r e c e n t ly in tr o d u c e d m a c h in e a ss u r e s p r e c is e la s t­

p r o g r a m m in g p o s it io n a fte r 2 -3 m o n t h s o f in s tr u c tio n .

i n g f o r t h e p r o c e s s o f s t r e t c h i n g t h e u p p e r o v e r t h e la s t

M e c h a n i c s w h o m a i n t a in t h e m a c h i n e s r e q u i r e o n l y a

a n d c e m e n t in g it to a n i n s o l e . In a d d it io n to a u t o m a t ic

m o d e s t k n o w le d g e o f e le c tr o n ic s . S o m e m a c h in e s c o n ­

s i z e d e t e r m i n a t i o n a n d p o s i t i o n i n g , it is p o s s i b l e t o a d ­

ta in

ju s t r a p id ly t o v a r io u s s h o e s t y le s c o n s t r u c t e d w it h d if ­

b u ilt-in

sy ste m s

th a t

d ia g n o s e

m ost

o p e r a tio n a l

f e r e n t m a t e r ia l s .

p r o b le m s .

T h e m a c h in e c a n b e p r o g r a m m e d

C o m p u te r -b a s e d m a c h in e s fo r fu n c t io n a l a n d f a n c y

to e lim in a te th e

s t i t c h i n g a r e f o u n d in f i r m s o f a ll s i z e s . I n c r e a s e d u s e

n e e d fo r m a n u a l a d ju s tm e n ts , a n d th is g r e a tly im p r o v e s

is e x p e c t e d in t h e n e x t 5 t o 10 y e a r s a s n e w m a c h i n e s

t h e e f f i c i e n c y o f t h e l a s t i n g o p e r a t i o n . W h e n a s h i f t is

are

d e v e lo p e d

w ith

im p r o v e d

c a p a b ilit y

and

m a d e f r o m o n e s h o e la s t t o a n o t h e r , d o w n t i m e is r e ­

s titc h

d u c e d b e c a u s e th e m a n y m a c h in e c h a n g e s r e q u ir e d c a n

q u a lity .

b e r e a d ily a c c o m p lis h e d b y th e c o m p u t e r p r o g r a m .

Numerically controlled upper roughing machine

U n i t la b o r a n d s k i l l r e q u i r e m e n t s o f o p e r a t o r s a r e
g r e a tly r e d u c e d

T h e p r o c e s s o f r o u g h in g c o n s is ts o f s c o u r in g th e m a r ­

w ith

th e a u to m a tic la s tin g m a c h in e .

g in a r e a o f th e fitte d s h o e u p p e r w it h a r o u g h b r u sh

A c c o r d in g to o n e m a c h in e m a n u fa c tu r e r , a r e d u c tio n

(u s u a lly w ir e ) to p r o v id e a g o o d b a s e to w h ic h c e m e n t

in u n it l a b o r r e q u i r e m e n t s o f n e a r l y 5 0 p e r c e n t is p o s ­

can

s till m o s t c o m m o n

s ib le w h e n th e o p e r a t o r o f th e a u t o m a t ic la s tin g m a ­

m e t h o d ( f o r o v e r 9 0 p e r c e n t o f o u t p u t ) , is m a n u a l , w i t h

c h in e a ls o t e n d s o t h e r t y p e s o f la s t in g m a c h i n e s . M o r e ­

ad here. T h e

tr a d itio n a l, a n d

r e l i a n c e o n t h e o p e r a t o r ’s h a n d - e y e c o o r d i n a t i o n . A n ­

o v e r , th e r e q u ir e d s k i ll o f p r o g r a m m in g f o r th is m a c h in e

o t h e r m e t h o d u s e d is o n e in w h i c h t h e s h a p e o f a s h o e

c a n b e m a ste r e d

is f o r m e d o n a m e t a l t e m p l a t e a n d t h e u p p e r is r o u g h e d

p e r s o n s w i t h e x p e r i e n c e in l a s t i n g . W h i l e m a i n t e n a n c e

w ith a w ir e b r u sh th a t f o llo w s th e o u tlin e o f th e s h o e

w o r k e r s g e n e r a l l y h a v e s k i l l s in t h e e l e c t r i c a l , p n e u m a ­

te m p la te .

tic , a n d h y d r a u lic fie ld s , t h e y a ls o n e e d s o m e k n o w l­

a fte r a b o u t

1 w e e k ’s i n s t r u c t i o n b y

e d g e o f e le c t r o n ic s to s e r v ic e th e m a c h in e . A

T h e n e w e s t te c h n o lo g y in v o lv e s th e u se o f an N C

te c h n i­

m a c h i n e . T h e s h a p e o f t h e b o t t o m o f t h e s h o e is “ d i g i ­

c i a n e m p l o y e d b y t h e m a c h i n e ’s m a n u f a c t u r e r is a v a i l ­

t iz e d ,” w h ic h in v o lv e s s e c u r in g s o m e 2 0 p o in ts c o r r e ­

a b le fo r in s tr u c tio n d u r in g t h e 1 o r 2 w e e k s f o l l o w i n g

s p o n d i n g t o t h e s h a p e o f t h e s h o e ’s b o t t o m . T h e N C

th e a c q u is itio n a n d in s ta lla tio n o f th e la s tin g m a c h in e .

m a c h in e c a n a u to m a tic a lly m a k e th e c a lc u la tio n s to d i­

T h i s m i c r o p r o c e s s o r - c o n t r o l l e d m a c h i n e is r e l a t i v e l y

r e c t a w i r e b r u s h in t h e r o u g h i n g o f r i g h t a n d l e f t s h o e s

c o s t l y b u t is l i k e l y t o b e c o n s i d e r e d c o s t e f f e c t i v e b y

in a ll s h o e s i z e s . T h e N C m a c h i n e h a s a d v a n t a g e s o v e r

la r g e a n d




20

m e d iu m -s iz e d

fir m s th a t e x p e c t t o

r e m a in

ily “ s p o ts ” th e s o le s to th e u p p ers. In th e n e w e r s o le

c o m p e t it i v e w it h fo r e ig n im p o r ts d u r in g th e n e x t 5 to
10

y ears.

Som e

s m a ll

fir m s

m ay

a ls o

p u rch ase

la y in g p r e s s e s , th e o p e r a to r u s e s a s e lf-a d ju s tin g p a d

th e

box

m a c h in e s.

th a t a u to m a tic a lly

d e te r m in e s th e

c o n to u r

of a

s h o e ’s b o t t o m a n d , a l s o , a t o e a n d h e e l r e s t t h a t a u t o ­

Injection molding machine with microprocessor
control

m a t ic a lly a d ju s ts fo r h e e l h e ig h t t o a s s u r e th a t t h e la s te d
s h o e is h e l d in a n a c c u r a t e p o s i t i o n . A f t e r l o a d i n g a n d

T h e in j e c tio n m o ld in g m a c h in e a u to m a tic a lly m o ld s

in i t i a l a d j u s t m e n t , t h e o p e r a t o r t h e n s t a r t s a h i g h - p r e s ­

a s h o e b o tt o m fr o m th e r m o p la s tic o r p o ly u r e t h a n e m a ­

su re c y c le to se c u r e a p e r m a n e n t a tta c h m e n t o f th e s o le

t e r i a l t o t h e u p p e r p a r t o f t h e s h o e . I t is c o n s i d e r a b l y

to th e sh o e b o tto m .

le s s la b o r in t e n s iv e th a n th e m a jo r a lt e r n a tiv e p r o c e s s e s

W h i l e u n it l a b o r r e q u i r e m e n t s a r e n o t r e d u c e d s i g ­

o f c u ttin g , s t itc h in g o r c e m e n t in g , a n d a s s o c ia te d in te r ­

n i f i c a n t l y b y t h i s m a c h i n e , l e s s o p e r a t o r s k i l l is r e q u i r e d

m e d i a r y s t e p s . T h e q u a l i t y o f o u t p u t is a l s o h i g h e r w i t h

a n d q u a l i t y o f o u t p u t is i m p r o v e d . O n a t r a d i t i o n a l m a ­

in j e c tio n m o ld in g b e c a u s e o f th e c o n s id e r a b le u n ifo r m ­

c h in e la c k in g th e a u to m a tic a d ju s tm e n ts , a n o p e r a to r

i t y o f t h e u n it s p r o d u c e d . M o r e t h a n 2 0 p e r c e n t o f d o ­

m a y b r e a k a la s t w h e n h i g h p r e s s u r e is a p p l i e d o r f a il

m e s tic a lly p r o d u c e d s h o e s h a v e s o le s m a d e b y in je c tio n

t o s e c u r e p r e c i s e a d h e s i o n o f t h e s h o e ’s p a r t s .

m o ld in g .

C u r r e n t l y , a b o u t 15 p e r c e n t o f t h e s h o e m a n u f a c t u r e r s

T h e m a c h in e s c o n s is t o f r o ta r y m o ld s ta tio n s , w it h a

h a v e s o le la y in g p r e s s e s w it h a u to m a tic c o n tr o ls . C o n ­

1 2 - s t a t i o n m a c h i n e e q u i p p e d t o h a n d l e 6 p a ir s o f s h o e s

t i n u e d d i f f u s i o n is l i k e l y d u r i n g t h e n e x t 5 y e a r s .

p e r c y c l e . O n th e m o s t a d v a n c e d m a c h in e s — m ic r o p r o c e s s o r c o n t r o l le d a n d , v e r y r e c e n t l y , c o m p u t e r - c o n t r o l le d — a ll th e

Output and Productivity Outlook

m a c h in e ’s p a r a m e te r s ( e . g . , te m p e r a tu r e ) c a n b e s e t o n a c o n ­
t r o l c a b in e t th a t h a s a v is u a l d is p la y u n it . N u m e r o u s a u t o ­
m a t ic

fe a tu r e s,

d ia g n o s is ,

r a n g in g

fr o m

a r e a v a il a b le o n

m i x in g

m a t e r ia ls to

s o m e m a c h in e s .

Output

fa u lt

In

M oreover,

1984, to ta l fo o t w e a r p r o d u c tio n w a s a b o u t 3 0 0

m i l l i o n p a ir s , t h e s m a l l e s t q u a n t i t y s i n c e t h e e a r l y 1 9 3 0 ’s.

r e c e n tly d e v e lo p e d p o ly u r e t h a n e c o m p o u n d s c a n b e p r o c e s s ­

F rom

e d m u c h f a s te r th a n th e u s u a l p o ly u r e t h a n e c o m p o u n d .

1 9 7 0 to 1 9 8 4 , o u tp u t d e c lin e d a t a n a v e r a g e a n ­

L a b o r r e q u ir e m e n ts fo r in j e c tio n m o ld in g a r e r e la ­

n u a l r a t e o f 3 .8 p e r c e n t , c o n s i d e r a b l y g r e a t e r t h a n t h e

t i v e ly l o w , a n d o n ly m o d e s t s k ills a r e r e q u ir e d t o o p ­

r a t e o f d e c l i n e ( 0 .3 p e r c e n t ) in t h e 1 9 6 0 ’s. D e c l i n e s t o o k

e r a te th e m a c h in e s. T w o o p e r a to r s w ith o n ly s o m e m e ­

p l a c e in a l l y e a r s o f t h e p e r i o d , w i t h t h e e x c e p t i o n o f

c h a n ic a l e x p e r ie n c e a re u se d o n a m a c h in e w it h

1 9 7 6 a n d 1 9 7 8 ( c h a r t 6 ). B y 1 9 8 4 , o u tp u t w a s o n ly a b o u t

12 o r

h a l f t h e l e v e l in 1 9 6 0 .

18 s t a t i o n s t o l o a d , u n l o a d , a n d p e r i o d i c a l l y e x a m i n e

P r o d u c t i o n d e c l i n e d c o n s i s t e n t l y f o r b o t h w o m e n ’s

u n it s o f p r o d u c t i o n s o a s t o m i n i m i z e t h e n u m b e r o f
d e f e c t i v e p a r t s a r i s i n g f r o m a n o c c a s i o n a l e r r o r in t h e

a n d m e n ’s s h o e s , w h i c h

p r o c e s s . T h e o p tio n a l fe a tu r e o f a u to m a tic lo a d in g fu r ­

t h r e e - f i f t h s o f a l l f o o t w e a r p r o d u c e d . W o m e n ’s s h o e s

t o g e t h e r a c c o u n t fo r a lm o s t

t h e r e l i m i n a t e s la b o r r e q u i r e m e n t s . L o a d i n g a n d u n l o a d ­

d e c lin e d 55 p e r c e n t b e t w e e n 1 9 7 0 a n d 1 9 8 4 , w h ile th e

i n g c a n b e c a r r i e d o u t b y r o b o t s o n a t l e a s t o n e k in d

d e c l i n e f o r m e n ’s s h o e s w a s n e a r l y 4 0 p e r c e n t . E v e n

o f c o m p u t e r iz e d m a c h in e .

s h a r p e r d e c l i n e s t o o k p l a c e f o r y o u t h ’s a n d b o y s ’ s h o e s

U s e o f m ic r o p r o c e s s o r - c o n tr o lle d m o ld in g m a c h in e s ,

a n d m i s s e s ’ a n d c h i l d r e n ’s s h o e s , w h i c h , t o g e t h e r , d e ­

p r im a r ily b y la r g e a n d m e d iu m - s iz e s h o e m a n u f a c tu r ­

c lin e d to le s s th a n 9 p e r c e n t o f th e fo o t w e a r p r o d u c e d

in g f i r m s , is e x p e c t e d to in c r e a s e m o d e r a t e ly . C u r r e n tly ,

in

l e s s t h a n 15 p e r c e n t o f a ll i n j e c t i o n m o l d i n g m a c h i n e s

a n d b a b i e s ’ s h o e s a n d h o u s e s l ip p e r s ; t h e s e t w o g r o u p s

c o n ta in th e s e t e c h n o lo g ie s , b u t a t le a s t s o m e o f th e n u ­

t o g e t h e r a c c o u n t e d f o r a b o u t 2 6 p e r c e n t o f a ll f o o t w e a r

1 9 8 4 . S u b s t a n t ia l d e c l i n e s a l s o o c c u r r e d in i n f a n t s ’

in i m p o r t i n g s h o e u p p e r s a r e

p r o d u c e d in 1 9 8 4 . O n l y a m i s c e l l a n e o u s p r o d u c t c l a s s

lik e ly t o a c q u ir e th e m a c h in e s . T h e r e m a in in g fir m s w ill

w h ic h in c lu d e s a th le tic s h o e s e x h ib ite d g r o w t h b e t w e e n

m e r o u s fir m s in v o l v e d

c o n tin u e , fo r at le a s t th e n e x t 5 y e a r s, to u se m a c h in e s

1 9 7 0 a n d 19 8 4 ; its s h a r e r o s e s t e a d ily t o a b o u t 7 p e r c e n t

th a t are c o n tr o lle d

e le c tr ic a l

o f t h e t o t a l . A s o - c a l l e d “ a t h l e i s u r e ” s h o e t h a t is c l a s ­

c o n t r o ls w h ic h r e q u ir e r e g u la r m a in te n a n c e b y a s k ille d

s i f i e d in t h i s i n d u s t r y is m a n u f a c t u r e d w i t h l e a t h e r u p ­

e le c tr ic ia n a n d a h y d r a u lic te c h n ic ia n .

p e r s , a m o ld e d o u t e r s o le , a n d s o f t in n e r p a d d in g . T h is

Sole laying press

b o t h y o u n g p e r s o n s a n d a d u lt s .

by

r a th e r c u m b e r s o m e

s h o e m a y c o n tin u e to r e c e iv e g r o w in g a c c e p ta n c e b y

W h ile c e m e n t in g a s o le to th e u p p e r p a rt o f a s h o e

W h ile d o m e s tic o u tp u t h a s d r o p p e d sh a r p ly o v e r th e

is s t i l l la b o r i n t e n s i v e , a u t o m a t i c a d j u s t m e n t s o n s o m e

y e a r s , t o t a l c o n s u m p t i o n h a s , in f a c t , r is e n . P e r c a p i t a

s o le la y in g p r e s s e s s u b s ta n tia lly im p r o v e th e u n ifo r m ­

c o n s u m p t i o n , h o w e v e r , h a s b e e n r e l a t i v e l y s t a b le : 4 . 3 0

it y o f p r o d u c tio n . A n o p e r a to r , w h o r e c e iv e s th e u p ­

p a ir s in 1 9 8 4 , t h e f i r s t t i m e t h e r a t i o w a s a b o v e 4 p a ir s

p e r s a n d s o le s w it h c e m e n t a lr e a d y a p p lie d t o th e m ,

s in c e 1 9 6 8 . I m p o r ts h a v e fille d th e g a p b e t w e e n o u tp u t

u s e s h ea t to

a n d c o n s u m p tio n .




r e a c t iv a t e th e c e m e n t a n d th e n te m p o r a r ­

21

Chart 6.

Output per employee hour and related data, footwear, 1970-84

Ratio scale (1977 = 100)

Ratio scale (1977 = 100)
140
130

120
Output per employee hour

110
100
90
80

70

60
140
130

120
Output

110
100
90
80

70

60
140
130

120
Employee hours

110

100
90
80

70

60

Source: Bureau of Labor Statistics.




22

The outlook for domestic production will be primarily
a function of the industry’s effectiveness in competing
with foreign producers. In addition, rubber and plastic
footwear (SIC 302) is also likely to continue to affect
nonrubber footwear output. Rubber and plastic foot­
wear—especially the footwear used widely by boys,
girls, and many young adults for athletic and casual oc­
casions—has been considered “directly competitive”
with nonathletic footwear by the U.S. International
Trade Commission.5

1970-84, as output and employee hours fell at almost
the same rate. Over the period, productivity increased
at an average annual rate of 0.2 percent; output and
employee hours fell 3.8 and 4.0 percent, respectively,
annually.
In the period 1980-84, productivity advanced at an
average annual rate of 1.4 percent. This recent produc­
tivity increase was associated with a decline in output
of 5.4 percent, but a sharper fall (6.7 percent) in em­
ployee hours. The decline in hours largely reflected the
diffusion of new technology and the closing of older
plants.
In 1984, productivity was near its levels in 1975 and
1976, while output and hours were at their lowest points
since 1947 (earliest available data). Productivity reached
its postwar peak in 1982, as hours dropped almost 12
percent in that year.
The industry’s slight productivity increase during
1970-84 followed a period of similar growth in the 1960’s
(an annual average of 0.4 percent). In those two pe­
riods, the trends in output and employee hours differed
markedly. Whereas output and employee hours fell 1.0
percent or less during 1960-70, both output and hours
declined more than three times as rapidly during
1970-84.

Imports

In contrast to the trend in domestic production, im­
ports grew substantially in all but 3 years during 197084. Consequently, import penetration increased almost
steadily over the 14-year period. The import penetra­
tion ratio more than doubled, from 30 percent in 1970
to 63 percent in 1983 to an estimated 72 percent in 1984
(quantity basis). Since most footwear imports are still
relatively low priced, the import penetration ratio is
considerably lower on a dollar-value basis than on a quanti­
ty basis. The dollar-value ratio was 45 percent in 1983 (latest
available figure).
Imports have nearly doubled since the Orderly Mar­
keting Agreements with Taiwan and South Korea, the
two largest exporters to the United States, expired in
June 1981. Over 725 million pairs of shoes and house
slippers were imported in 1984, 25 percent higher than
the total of only a year before.
Exports of nonrubber footwear are only a small frac­
tion of domestic production. They totaled only 8.9 mil­
lion pairs in 1984, or about 3 percent of domestic
shipments.
As is evident from the import penetration data, many
domestic shoe manufacturers have been unable to com­
pete with foreign producers. To improve their position,
some domestic manufacturers have themselves been import­
ing shoes or the labor-intensive shoe uppers.6
In 1985, the United States International Trade Com­
mission (ITC) determined that imports were a substan­
tial cause of serious injury to the industry and recom­
mended that the President impose quantitative restric­
tions for a 5-year period on imported footwear valued
at more than $2.50 by the U.S. Customs Service.7 The
President did not accept the recommendation of the
ITC.

Investment
Capital expenditures

Productivity

Productivity increased very slightly in the period
5 U nited States International Trade Com m ission, Nonrubber Foot­

wear, U S IT C Publication 1545, July 1984, pp. 7-8.
6“ The company . . . expects that its importation o f shoe uppers will
favorably impact operating margins . . . . , ” from Suave Shoe Corporation
Report to the Shareholders for the Third Quarter Ended June 30, 1985.
’ U nited States International Trade Com m ission, Nonrubber Foot­

8Data deflated for price changes by the U.S. Department o f Com­
merce, Office o f Business Analysis.

wear, U S IT C Publication 1717, July 1985, pp. 1-2.




Real capital expenditures (in constant dollars)8by the
footwear industry in 1982 (latest data) were only 59
percent of the peak in 1968, although in current dollars
they were 47 percent higher. In 1981, however, real
outlays approached the peak. Over the period 1970-82,
real outlays (1972 dollars) averaged $34 million annu­
ally, almost equal to the annual outlays in 1960-70.
However, in view of the widespread industry prac­
tice of renting equipment, data on capital expenditures
do not include all of the industry’s outlays for new ma­
chinery. Census data for 1982 indicate that rental pay­
ments for machinery and equipment were more than
two-thirds as large as new capital expenditures for ma­
chinery and equipment. In manufacturing as a whole,
rental payments were only 13 percent as large as new
capital expenditures in 1981 (latest data).
The outlook for growth in capital expenditures in the
years ahead is uncertain. On the one hand, investment
is likely to receive considerable emphasis by major
manufacturers interested in capital-intensive equipment
to reduce unit labor cost and remain competitive. On
the other hand, the high cost of new equipment for
many processes, coupled with growing imports, dis­
courages long-term investment.

23

Research and development

slightly since 1970 following a considerably more rapid
rate of increase in the previous decade.

Research and development (R&D) in this industry is
generally limited to the suppliers of machinery and the
largest shoe manufacturers. Even several of the larger
firms do not engage in R&D. Other firms reported that
their R&D includes marketing surveys and product
testing.9
The Footwear Industries of America (FIA), an asso­
ciation of shoe manufacturers, is promoting R&D. The
FIA has been conducting seminars in which the ma­
chine suppliers and material suppliers discuss with foot­
wear manufacturers the improvements needed in key
processes. Manufacturers can make suggestions that
may be incorporated in new machinery during these
regional seminars. Traditionally, suppliers of machinery
have contacted shoe manufacturers individually, who
then had relatively little participation in the R&D
process.

Occupations

According to a recent Department of Labor survey,"
the distribution of the industry’s production and related
workers by level of skill was as follows:
Percent
Highly skilled ............................................................................
Skilled .........................................................................................
Sem iskilled..................................................................................
U n sk ille d .....................................................................................

10.1
33.3
40.6
16.0

As is evident from the table, more than 2 out of 5
workers are skilled or highly skilled. Their jobs are as­
sociated with the continuing high utilization of nonautomatic/noncomputer-controlled machines. Where
such machines predominate, e.g., in the fitting and stitch­
ing and lasting/bottoming operations, almost half of the
workers are skilled or highly skilled. In contrast, of the
workers who are in occupations utilizing automatic/computer-controlled machines, only 22 percent
are skilled or highly skilled.
Cutting operations, which are among the least auto­
mated of the footwear operations, have the highest pro­
portion of skilled workers: 21 percent are highly skilled
and 42 percent are skilled.
Employment is expected to decrease in each of the
major occupational groups between 1984 and 1995, ac­
cording to BLS. The smallest proportional declines are
anticipated for precision production occupations and
the engineering and technician occupations—20 and 28
percent, respectively. By 1995, precision production
workers are expected to account for 22 percent of all
employees, up from 18 percent in 1984, while the small
engineering and technician group will still represent
only about 1 percent of all footwear employees.
The largest projected declines (about 40 percent) from
1984 to 1995 are expected to take place in machine set­
ter, setup operator, and tender occupations; in admin­
istrative support occupations, including clerical; and for
blue-collar worker supervisors. While machine setters,
setup operators, and tenders—by far the largest single
occupational group—will decline in relative impor­
tance, they will still account for more than one-third
of the industry’s employment in 1995.

Employment and Occupational Trends
Employment

In 1985, an average of 99,900 persons were working
in footwear manufacturing, the smallest number in any
year since 1939 (earliest data available). In the period
1970-85, employment declined rapidly, at an average
annual rate of 4.0 percent (chart 7). With the exception
of 1976, 1978, and 1981, employment fell each year dur­
ing the 15-year period. By 1985, employment was only
47 percent of the 1970 level (212,700), and 41 percent
of the 1960 level (242,600). The rate of decline was
considerably faster in the 1970’s and through the first
half of the 1980’s than in the 1950’s and 1960’s.
The Bureau of Labor Statistics, on the basis of its
moderate-growth projection for the economy, projects
a continuation of the sharp employment decline in foot­
wear, at a rate of 2.8 percent annually from 1985 to
1995.1 On the basis of this projection, employment in
0
1995 would be 25 percent lower than in 1985.
Production worker employment has remained high
relative to total employment, as the industry continues
to be highly labor intensive. The ratio of production
workers to all footwear employees was 85 percent in
1985, or only 2 percentage points below the 1970 fig­
ure. The comparable ratio in all manufacturing in 1985
was about 68 percent.
The proportion of women in the footwear industry’s
work force was 65 percent in 1985, or double the av­
erage for all manufacturing industries. It has risen

Adjustment of workers to technological change

9 U nited States International Trade Com m ission, Nonrubber Foot­

Programs to protect workers from the adverse affects
of changes in machinery and methods may be incorpo­
rated into union contracts or they may be informal ar­
rangements between workers and management. In gen-

wear, U S IT C Publication 1717, July 1985, p. A-63.
10B L S projections for industry em ploym ent in 1995 are based on
three alternative versions o f econ om ic grow th. For details on as­
sum ptions and m eth od ology used to d evelop these projections, see
the Monthly Labor Review, November 1985.




" U .S . D epartm ent o f Labor, Nonrubber Footwear, Public Version
o f Report to the President, Investigation N o. T A -224-55, under Sec.
224 o f Trade A c t o f 1974, July 1985, pp. 15-17.

24

Chart 7.

Employment in footwear, 1970-85, and projections, 1985-951

Employees (thousands)

Employees (thousands)

1 Least squares trends method for historical data; compound interest method for projections.
2 See text footnote 10.
Source: Bureau of Labor Statistics.




25

tempt to assist the worker in securing and adapting to
another position. If an employee’s position is terminated,
but an opening for the same position is available in an­
other plant, the employee can transfer with seniority
intact. When a job is discontinued and replaced in whole
or in part by another operation, displaced employees
have first claim to the new operation, or they may be
placed on a preferential employment list. Laid-off
workers may be on a preferential employment list for
a maximum of 18 months for jobs that are filled on the
basis of seniority.
In at least one major contract, the company agrees
not to open and operate a new plant prior to consider­
ing the feasibility of increasing production at its exist­
ing plant through second and third work shifts. This
can insure greater stability of employment at the plant
until the need for greater output from a new plant has
been firmly established.
Some provisions deal with layoffs that result from
plant shutdowns. Representative agreements provide
severance pay of $30 per year of continuous service,
with a minimum of 15 and a maximum of 30 years ($450
to $900). In recent years, a bargaining provision in con­
tracts has enabled vested employees who are displaced by
plant closure and are unable to secure employment with the
company to apply for reduced pensions if they are at least
55 years of age.
Footwear workers who lose their jobs or whose hours
are reduced may have recourse to a Federal program
of assistance if the Office of Trade Adjustment Assist­
ance of the Department of Labor determines that in­
creased imports contributed importantly to job loss or
earnings reduction. Cash allowances were paid to over
64,800 workers between April 1975 and August 31,
1985. Over 6,250 of the workers who received allow­
ances also were enrolled in training programs.
In September 1985, the President requested that the
Secretary of Labor provide additional financial assist­
ance for the dislocated workers in lieu of imposing re­
strictions on imports. The assistance is intended to aid
about 2,300 dislocated workers to find jobs through job
search, retraining, and relocation.

eral, such programs are more prevalent and detailed in
formal contracts. Both formal and informal labor-man­
agement arrangements are influenced by the state of
the economy and, in particular, the condition of the in­
dustry in which collective bargaining takes place.
Formal labor-management agreements cover between
25 and 50 percent of the workers in this industry. The
unions are the Amalgamated Clothing and Textile
Workers,1 The United Food and Commercial
2
Workers13—the two major unions—and the United Rubber,
Cork, Linoleum and Plastics Workers of America. All three
are members of the AFL-CIO. The independent unions in­
clude the Brotherhood of Shoe and Allied Craftsmen and the
International Brotherhood of Teamsters.
Plantwide seniority, which prevails in these la­
bor-management agreements, provides a measure of job
security when technological change takes place. In gen­
eral, seniority rights apply to layoff, recall, job bidding,
wage rates, and other similar situations. Even though
training and retraining (often associated with techno­
logical change) are usually not detailed in contracts,
seniority is usually a pertinent consideration when train­
ing or retraining is offered.
Requirements for advance notice of technological
change are typically absent from bargaining contracts
in this industry. Union shop stewards generally learn
about such changes by being informed of new and al­
tered job requirements associated with a new machine
or a new method. This takes place when wage classi­
fications and rates on new and changed operations are
established by the company. The union can question
changes in earnings through the grievance procedure,
including any failure of operators to achieve their for­
mer average earnings.
When an employee is displaced as a result of a change
in operations or method of manufacture, some agree­
ments require the union and company to confer and at­
1 The U nited Sh oe W orkers o f A m erica (A F L -C IO ) m erged with
2
this union on M arch 5, 1979.
1 T he Boot and Sh oe W orkers’ Union (A F L -C IO ) m erged w ith this
3
union on Septem ber 1, 1977.

S E LE C T E D R E FE R E N C E S
F o otw ear Industries o f A m erica (Cooperator) and J.B. Kaplan and
Com pany, Inc. (Consultant). Survey of the State of the Art in Foot­

U .S. Departm ent o f Labor. Nonrubber Footwear, Public V ersion o f
R eport to the President, Investigation N o . T A -224-55, U nder S ec­
tion 224 o f the Trade A c t o f 1974, July 1985.

wear Manufacturing and Identification of Priorities and Mechanisms
to Accelerate the Development and Application o f Advanced Technol­
ogy in the U.S. Footwear Manufacturing Industry. T w o volum es.

U .S. G eneral A ccou n tin g O ffice. The U.S. Footwear Industries' Abil­
ity to Meet Military Mobilization Needs, G A O /N S IA D -8 5 -3 5 , Janu­
ary 3, 1985.

U nder a g ra n t/coop erative agreem ent from the Departm ent o f
C om m erce, April 1983.
F ootw ear Industry Team . Footwear Industry Revitalization Program,
First Annual Progress Report. U .S. D epartm ent o f C om m erce, Sep­
tember 1978.

United States International Trade Com m ission. Nonrubber Footwear,
U S IT C Publication 1545, July 1984.

U .S. Departm ent o f Labor, Bureau o f Labor Statistics. Industry Wage
Survey. Men's and Women's Footwear, April 1980, Bulletin 2118
(1982).

U nited States International Trade Com m ission. Nonrubber Footwear,
U S IT C Publication 1717, July 1985.




26

Chapter 3. Hydraulic Cement

Summary

applicable in plants adopting laborsaving innovations.
Training has been extensive in some plants—particu­
larly when computer process control systems have been
introduced.

The hydraulic cement industry (SIC 3241) consists
of about 146 plants which produce portland, masonry,
and other types of hydraulic cement that are essential
to the construction industry.
Innovations in technology to manufacture hydraulic
cement are being introduced in all major production
steps, from the initial stages of preparing limestone and
other raw materials obtained from quarries to the final
tasks of grinding clinker into finished cement and stor­
ing it for shipment. Major technologies being adopted
include suspension preheaters and precalcining furnaces,
which greatly increase kiln capacity and fuel efficiency;
roller mills, which combine the separate steps of dry­
ing, crushing, and grinding of raw materials prior to
burning in the kiln; and advanced computer process
control and instrumentation systems that regulate kiln
operations and other key production tasks. Major in­
centives to the introduction of these innovations and
other changes discussed in this report include meeting
the requirements of environmental regulations, lower­
ing energy costs, and reducing labor and other expenses
to become more competitive with domestic and foreign
suppliers of cement.
Employment in the cement industry totaled 23,400
workers in 1985, down by 30 percent from 1970. The
sharpest declines were between 1978 and 1985—during
which time the number of employees declined at an
average annual rate of 5.1 percent. The reduction in
the number of cement plants and the decline in output
associated with periods of slack demand for cement
have been the major factors in lower levels of employ­
ment since 1970.
New technology has brought about changes in some
key occupations at plants undergoing extensive mod­
ernization, with control room operator and maintenance
occupations increasing in complexity and relative im­
portance and semiskilled operative and laborer positions
generally declining. The introduction of computer proc­
ess control systems and the use of high-capacity, sin­
gle-kiln systems featuring preheating and precalcining
towers have centralized and combined operations and
changed the mix of occupations.
The majority of the work force in the cement indus­
try is covered by collective bargaining agreements, and
provisions relating to seniority, advance notice of
change, training, and reassignment of workers have been




Structure of the Industry
The output of the hydraulic cement industry is es­
sential for a wide range of construction activities. Thus,
demand for the industry’s products is closely related to
changes in the volume and mix of construction activi­
ties. Portland cement accounts for about 95 percent of
total production, and masonry cement makes up most
of the balance. In terms of end-use, residential construc­
tion typically consumes about one-third of the total out­
put of portland cement, and commercial construction
about 20 percent.
In 1984, 141 plants turned out portland cement (U.S.
Bureau of Mines data); nearly one-half of the total vol­
ume of shipments went to States in the South, where
construction activity has been strong. Two out of three
plants also produced masonry cement—a non-portland
type of hydraulic cement. Nearly 70 percent of the out­
put of masonry cement also was shipped to this area.
About five plants produced masonry and other types
of hydraulic cement exclusively.
The cement industry ranks among the leading indus­
tries in consumption of energy, which accounts for be­
tween 35 and 65 percent of the total cost of cement,
depending upon the age and type of plant. Thus, capi­
tal expenditures for technologies to reduce energy con­
sumption are substantial. The industry also allocates
considerable funds for new equipment and processes to
comply with regulations on surface mining and air and
water pollution.
Imports of hydraulic cement have been increasing
sharply and in 1985 amounted to about 14 million tons,
5 times greater than in 1982.'
The cement industry had 23,400 employees in 1985,
78 percent of whom were production workers. A sig­
nificant number of workers are located in the leading
producer States of Texas, California, and Pennsylvania.

'U .S . Departm ent o f Com m erce, International Trade Adm inistra­
tion, 1986 U.S. Industrial Outlook. See section on cem ent industry
(pp. 2-7) prepared by C. B. Pitcher, Office o f Basic Industries.

27

Technology in the 1980’s

Improved kiln technology

Substantial improvements in technology related to
the kiln operation are underway. In the kiln, the blend
of limestone and other material is subjected to high
temperatures as it passes through a rotating and slightly
inclined cylindrical steel shell. In this process, the raw
material is changed chemically by the high tempera­
ture, fusing into clinker—a hard substance which sub­
sequently is cooled and ground into finished cement.
Modern cement kilns have greater capacity than ear­
lier models, and kilns presently being installed utilize
high-capacity, preheater/precalciner dry process tech­
nologies, discussed below, which are substantially more
energy efficient.2 According to the U.S. Bureau of
Mines, average kiln capacity in the United States in­
creased by 90 percent between 1970 and 1984.3 As an
example, the Portland Cement Association reports that
the 4 largest kilns constructed since 1980 have the same
capacity as the 57 smallest kilns.4 Moreover, the asso­
ciation reports that the proportion of total cement ca­
pacity using the dry process has risen to about twothirds of the total, with further gains anticipated.
Preheater and precalciner systems are being used in
a growing number of cement plants to reduce costs in
the kiln operation. In 1984, plants with 36 percent of
total U.S. capacity used preheaters, and 19 percent used
precalciners. All the precalciners and 94 percent of the
preheaters have been added since 1971.5 Although fur­
ther diffusion of these technologies is anticipated, the
United States lags behind some countries, including Ja­
pan, where precalciners are associated with about 60
percent of total kiln capacity.
The major incentive to introducing preheater and
precalciner technology is to reduce energy costs. How­
ever, labor requirements for operators and other staff
also are lowered by the greater capacity of the new
production equipment. In one plant which modernized
extensively, including the use of preheater and precal­
ciner technology, one short rotary kiln in a new sec­
tion of the plant has twice the capacity of three con­
ventional kilns that were closed down. In the new kiln,
energy requirements per ton of cement are lower by
one-third.
The trend to constructing kilns of greater length has

The manufacture of portland cement requires large
and powerful equipment to convert limestone and lesser
quantities of other materials to cement through a series
of physical and chemical processes. The four basic steps
in the manufacture of portland cement are: Quarrying
and crushing limestone and other raw materials; grind­
ing and homogenizing the raw materials; converting the
raw materials to clinker in a rotary kiln and associated
cooler; and grinding the clinker with additives to pro­
duce cement ready for shipment.
The most important new technologies being intro­
duced in modern cement plants include preheating and
precalcining kiln systems, which reduce processing time
and fuel consumption, thereby increasing kiln capacity
and fuel efficiency; roller mills, which combine the for­
merly separate steps of drying, crushing, and grinding
of raw material prior to burning in the kiln; air-swept
ball mills that perform raw grinding with greatly in­
creased efficiency; and advanced computer process con­
trol systems that monitor and control key production
steps throughout the plant from a central location. The
use of more powerful equipment to crush rock in quarry
operations, and improvements being incorporated in
ball mills used in finish grinding also are significant in­
novations. The cement industry is subject to strict en­
vironmental regulations, and a major incentive to the
adoption of new technology is to improve air quality
to conform to required standards.
Although the major cost associated with the produc­
tion of portland cement is for energy, the new tech­
nologies discussed in this section nonetheless have had
an impact on employees in the cement industry. In mod­
ern cement plants that feature computers, programma­
ble controllers, and central control rooms incorporat­
ing closed-circuit TV, a single operator and a helper
can control the major production units—a significant
saving in labor compared to older plants. In one of the
most advanced new facilities, for example, output of
cement per employee more than doubled after a major
modernization. These savings suggest that broad indus­
try adoption of these innovations could have an impact
on production and the work force. Moreover, the du­
ties and staffing requirements of kiln operators, main­
tenance workers, and other employees in cement plants
have changed as computer process control and other
innovations have been adopted. Thus, training programs
to prepare employees to operate new equipment, de­
scribed later, are an important feature of modernization
programs.
In this section and in table 3, innovations in cement
technology are described, their impact on productivity
and employment is examined, and prospects for further
adoption in the industry are assessed.



2 Cem ent kilns are o f tw o basic types, w et process and dry process,
depending on w hether the raw material being fed into the kiln is a
slurry or a dry pow der. T he trend is to a greater use o f dry process
kilns because they can utilize the new preheater and precalciner tech ­
nologies, w h ich consum e up to 50 percent less energy per ton o f c e ­
ment than the w et process kiln system s. T his n ew tech n olo g y cannot
be applied to w et kiln systems.
3 Bureau o f M ines, Minerals Yearbook, 1970 and 1984 editions (U .S.
Departm ent o f the Interior, 1972 and 1985).
4 Portland C em ent A ssociation, M arket and E con om ic Research D e ­
partment, U.S. and Canadian Portland Cement Industry: Plant Infor­
mation Summary (Skokie, Illinois, 1983 and 1984 editions).
5 Ibid.

28

Table 3. Major technology changes in hydraulic cement
Technology

Description

Labor implications

Diffusion

Improved kiln technology

New-model kilns have greater capa­ Although the major purpose of in­ The use of preheater/precalciners is
stalling preheater/precalciner kiln
expected to increase through
city and are more efficient than
1995. In 1984, plants with 36
older kilns. Suspension preheat­
systems is to save fuel, output
ers and precalciner furnaces are
per employee is higher in plants : percent of total U.S. cement
capacity used preheaters and 19
which have introduced this tech­
being used in dry process kiln
percent used precalciners. All of
nology. In a representative instal­
systems to lower fuel costs and in- j
lation, one short rotary kiln has
the precalciners and 94 percent
crease output. The preheater is a
of the preheaters have been
large tower adjacent to a short
twice the capacity of an older
adopted since 1971.
rotary kiln and feeds into it. The
facility— now closed— that had
preheater uses hot exit gases
three conventional kilns.
from the kiln to suspend, heat,
and partially calcine (remove car­
bon dioxide) the raw material as
it descends through the tower,
into the precalciner furnace, where
nearly all the remaining carbon
dioxide is removed, and through
the kiln for conversion to clinker.
Average kiln capacity increased by
The kiln in systems which use pre­
90 percent between 1970 and
heaters and precalciner furnaces
1984, with further gains an­
is up to 50 percent shorter than
ticipated over the next decade as
conventional kilns, where these
the proportion of dry process kilns
functions are carried out inside
using p re h e a te rs and p re ­
the kiln during the first stages of
processing.
calciners continues to increase.

Supplemental fuel for cement kilns

Industrial waste solvents are being The major impact of supplemental Supplemental fuel systems have
used as a supplemental fuel for
been introduced primarily in wet
fuel systems is an increase in the
kiln operations. Liquid waste fuel
duties of kiln operators and main­
process plants. Waste solvents re­
costs per Btu reportedly are be­
tenance employees, and the addi­
portedly make up between 15 and
low those for coal and other con- j
tional employment of laboratory
25 percent of total fuel require­
ventional fuels. A typical supple­
technicians.
ments, with a higher substitution
mental fuel installation consists of
rate anticipated in the future. Thir­
storage tanks, tank trucks that
teen plants— one-fifth of those
supply these tanks, and systems j
using the wet process— reportedly
that deliver the liquid to the kiln, j
were using, testing, or planning to
where it is introduced simultane­
test liquid waste supplemental
ously with conventional fuel.
fuel systems.

Improved grinding equipment

R aw grinding. In new dry process




plants, grinding of raw materials
prior to the kiln operation is being
accomplished by a single large
roller mill or ball mill. Both mills
have their economic advantages,
and the type of raw material deter­
mines which mill is used. The roller
mill used in the dry process
stands upright and grinds by the
action of large steel rolls. Hot kiln
gases blown upward through the
mill remove moisture during grind­
ing. Roller mills can process raw
material with a higher moisture
content than can single-unit airswept ball mills. However, airswept ball mills, which grind by
the tumbling action of steel balls
in a rotating cylinder, are not
limited in the kinds of raw materials
that may be processed.

29

Labor requirements in both roller Both single-unit roller mills and ball
mills and modern ball mills are
mills were incorporated in the last
lower than in older model tube mills
two new cement plants construct­
(both ball and rod). In the most
ed in the United States and further
advanced plants, roller and ball
adoption of these technologies in
mills of 6,000 horsepower are
raw grinding is anticipated.
controlled by a single operator in
a central control station. These
latest grinding technologies re­
portedly match the output of six
1,000-horsepower ball mills in use
in the 1950’s which, in total,
required two operators and two
helpers to oversee.

Table 3. Major technology changes in hydraulic cement—Continued
Technology
Improved grinding
equipment—Continued

Description

Labor implications

Finish grinding. Raw material con­ Productivity in finish grinding has

verted to clinker in the kiln next
undergoes final grinding. Improve­
ments in final grinding mills in­
clude the introduction of highefficiency air separators, larger
grinding units that replace several
sm aller ones, and improved
v a ria b le -s p e e d drives for ball
mills.

increased because of high-effici­
ency air separators and other in­
novations. Finish grinding units in
plants constructed in the 1980's,
for example, reportedly turn out
140 tons per hour, more than
double the output of the more
labor-intensive grinding units in
olace in the 1960's.

Diffusion
The outlook is for further tech­
nological improvements in grind­
ing mills to lower labor and
electrical energy costs. In 1985,
for example, 20 new high-efficiency
separators were installed, with ad­
ditional units planned.

Improved quarrying and crushing
equipment

The capacity of equipment to Productivity has increased as capa­ Innovations in quarrying and crush­
ing equipment are being adopted
city of equipment has risen and
load, haul, and crush quarried
in modernized and newly con­
crew requirements have declined.
limestone and other materials has
structed cement plants.
been increasing. Power shovels
Front-end loaders of 10- to 13cubic-foot capacity manned by a
have been replaced by larger ca­
single operator have replaced
pacity front-end loaders, and the
power shovels of 3- to 5-cubic-foot
conveyances used to transport
capacity which required two oper­
rock to the crushers also are larger.
Impactor crushers which handle
ators. Conveyances used to haul
stone to crushers have tripled in
large rocks at high volume also
capacity, with a corresponding in­
are being adopted.
crease in tons hauled per oper­
ator. More powerful crushers also
have reduced labor requirements
and achieved other savings.

Cumputer process control and
instrumentation

Computers and advanced instru­ The installation of computer process
control and related instrumentation
mentation are being applied to all
has eliminated some positions and
phases of cement production. Typi­
created others. In one example,
cally, the main computer and as­
the centralization of control in­
sociated instrumentation are lo­
strumentation associated with the
cated in a central control room
adoption of computer process
with computer-controllers located
control eliminated several cate­
in major production units. The
gories of operator positions, and
central computer monitors plant
the subsequent adoption of com ­
operations through this network of
puter process control resulted in
computer-controllers and under­
the creation of new positions of
takes autom atic or operatorcomputer operator and technician.
assisted changes in production
Moreover, computer process con­
variables as required. In the most
trol results in an increase in operator
advanced installations, major pro­
monitoring of equipment and less
cessing and material handling
manual manipulation of control
operations are under computer
devices associated with control of
control—from crushing through the
the kiln and other equipment.
storage of finished cement.

Improvements in shipping operations

Technological improvements in the
shipping department include bag­
filling machines, automatic pal­
letizing, forklifts, and automation
of recordkeeping. These develop­
ments have improved efficiency in
the filling, handling, and loading of
cement




30

Computer process control is an in­
tegral feature of many new plants
and those undergoing moderniza­
tion. Moreover, computer control
is being extended to a broader
network of operations within the
plant as technology has improved.

Labor requirements have declined Improvements in shipping operations
markedly in plants which have
are being adopted in many new
adopted these innovations. A fully
and modernized plants to increase
automated bag-packing line will
efficiency in the handling of the 10
percent of output that is shipped
lower labor requirements by more
than two-thirds compared to con­
in bags.
ventional, less mechanized facilities.

by a single operator. The conveyances used to haul the stone
to the crusher also have been increased in capacity, from
about 25 tons to 80 tons, with a corresponding increase in
tons hauled per operator.
Accompanying the larger loading and hauling equip­
ment has been an increase in the size and capacity of
crushers used to reduce the rock prior to grinding.
Impactor crushers which have the capability to handle
large rocks at high volume are being adopted in mod­
ernized and newly constructed cement plants. The size
and type of crusher being used at a particular cement
plant depends on the type of raw material being used to
make the cement.

been reversed by the diffusion of preheater and precalciner technology. The suspension preheater is an ad­
vance in dry process technology which consists of a
series of funnels or cyclones in a vertical arrangement
supported in a tower structure and emptying into a kiln.
Raw material enters the top of the preheater and is sus­
pended briefly in each of the cyclone stages and heated
by rising exhaust gases from the kiln and clinker cooler,
undergoing partial calcining (removal of carbon diox­
ide) in the process. The precalciner is an additional fur­
nace located near the base of the preheater tower
through which the preheated material passes before en­
tering the kiln. The combined preheater/precalciner
technologies accomplish as much as 95 percent of the
raw material calcination. Thus, kilns are shorter because
they do not perform the calcining function. In some
conversions to preheater/precalciner technology, kilns
have been shortened to half their former lengths.
The outlook is for kiln systems incorporating the
precalcining preheaters to continue to replace the older
long kilns. In addition to fuel savings, output per em­
ployee is higher in precalcining preheater kiln systems
because of larger capacity equipment and com­
puter-aided central control.

Innovations in grinding

Following crushing, the raw materials used to make
cement are further reduced in size by grinding to pre­
pare them for conversion to cement compounds in the
kiln process. Technologies including roller mills and
improved, high-capacity ball mills are increasing effi­
ciency in raw grinding. In new dry process plants, for
example, raw grinding is accomplished by a single large
roller mill or ball mill. Each type of mill has advantages
and disadvantages, and the characteristics of the raw
material determine which mill is used.
Roller mills were introduced into the U.S. cement
industry in the early 1970’s for raw material grinding,
and they are being installed in a growing number of
cement plants. The roller mill is a dry process technol­
ogy and differs from tube mills (ball mills and rod
mills)—the conventional method of grinding used in
both wet and dry plants. The roller mill stands upright
and grinds by the action of large rolls which turn around
a vertical axis at the bottom of the mill. Roller mills
utilize hot kiln exhaust gases, blown upward through
the mill to remove moisture during grinding. The roller
mill can process raw materials with a higher moisture
content than large, single-unit air-swept ball mills. How­
ever, air-swept ball mills, which grind by the tumbling
action of steel balls in a rotating cylinder, are not lim­
ited in the kinds of raw material that may be processed.
Both roller mills and modern ball mills are more pow­
erful and use less labor and electric power than the
older model tube mills (both ball and rod). Modern
roller and ball mills of 6,000 horsepower in the most
advanced plants are controlled by a single operator at
a central control station and match the output of six
1,000-horsepower ball mills in use prior to 1950 which,
in total, would require two operators and two helpers
to oversee.

Supplemental fuel for cement kilns

Industrial waste solvents are being used as a supple­
mental fuel for kiln operations, primarily in wet proc­
ess plants. Liquid waste fuel costs less per Btu than coal
and other fuels, and its use has the potential to make
the wet process more competitive with modern dry
process plants. Waste solvents reportedly constitute be­
tween 15 and 25 percent of total fuel requirements in
user plants, with a higher substitution rate anticipated
in the future.
A typical supplemental fuel installation consists of a
series of storage tanks, tank trucks that supply these
tanks, and piping and plumbing systems that deliver the
liquids to the kiln where they are introduced simulta­
neously with the normal kiln fuel.
According to the International Brotherhood of
Boilermakers, the major union representing workers in
the cement industry, supplemental fuel systems have
not adversely affected workers. The major impact has
been an increase in the duties of kiln operators and
maintenance employees, and additional employment to
attend the systems—primarily in the area of laboratory
analysis.
Quarrying and crushing

Innovations in the loading, hauling, and crushing of
quarried limestone and other materials used as raw ma­
terial for cement have increased productivity of equip­
ment operators. Power shovels of 3- to 5-cubic-foot ca­
pacity manned by two operators have been replaced by
front end loaders of 10- to 13-cubic-foot capacity manned




Improved finish grinding technology

In the end-stage finish grinding of clinker, a series of
improvements in conventional ball mills—although not
dramatic—nonetheless is increasing capacity, lowering
unit labor requirements, and reducing electrical energy
31

consumption. Plants constructed in the 1980’s feature
finish grinding departments that incorporate high-effi­
ciency air separators and other innovations that make
possible production rates of about 140 tons per hour,
more than double the output of finish grinding units
built in the 1960’s that used conventional separators.
Another source of gains in efficiency is the construc­
tion of larger units that replace several smaller ones,
thereby lowering capital, maintenance labor, and build­
ing space requirements. Moreover, computer process
control systems reportedly can be utilized more readily
on larger, single units. Other innovations in ball mills
include improved variable-speed drive motors which
maximize efficiency with varying mill loads, and new
types of liners for the interior of the ball mill which
direct the larger steel balls (the medium which grinds
the clinker) to the larger particles that remain to be
processed. These liners reportedly improve grinding ef­
ficiency and lower electric power consumed in the en­
ergy-intensive finish grinding operation.

trol room operator and electronics technician—were
created by the change. Lengthy in-house training was
provided to employees chosen for the operator posi­
tions. The technician jobs were filled by applicants from
a nearby community college. These reductions in labor
requirements are attributable, mainly, to the establish­
ment of centralized control which, in turn, was facili­
tated by the installation of computers and state-of-theart processing equipment.
Microprocessor-based control systems also are being
used in the cement industry to upgrade the performance
of older kilns. In one recent installation, continuous
monitoring of kiln operations by the new system en­
ables the operator to see immediately the effect of any
control actions on kiln production and fuel efficiency.
As a result, output has increased 10 percent, kiln op­
erations are more uniform, fuel efficiency has increased,
and clinker quality has improved.
New, continuous analyzers and computer control are
being installed onstream before the raw grinding proc­
ess to achieve economies in labor, fuel, and other cost
items.
Computers also are being used in quality control tasks.
As an example, X-ray analyzing equipment in some plants
is being incorporated into a program to control raw
material blending. The data provided by the computer
enable personnel to undertake precise and fast control
steps, resulting in reduced raw material consumption
and increased equipment utilization.

Computer process control and instrumentation

Computers and advanced instrumentation are improv­
ing efficiency in all phases of cement production—proc­
essing, material handling, and quality control. The more
precise control provided by computers and instrumen­
tation facilitates optimum performance from equipment,
resulting in increased productivity, reduced energy con­
sumption, lowered maintenance requirements, and im­
proved product quality.
Broad application of computer control is generally
an integral part of most new plant construction and
major modernization programs. A microproces­
sor-based control system at one of the most modern
new cement plants—typical of recent installations of
this technology—includes a main computer with con­
sole and displays located in a central control room and
additional computers located at the major production
units. The central computer monitors plant operations
through the network of computer-controllers pro­
grammed to carry out functions at various plant loca­
tions and automatically signal the central computer if
a change in programming or instructions is required.
All processing and material handling operations are un­
der computer control, from crushing through the stor­
age of finished cement. Equipment also is wired for
manual control from the central location, permitting
plant operation independent of the computer if the need
arises.
This single-kiln plant incorporating the latest tech­
nology was constructed alongside an existing multi-kiln
facility which continued to operate until startup, and
the changes in crew requirements in the old and new
plants were significant. In all, 17 former kiln, raw mill,
and finish mill operator occupations no longer exist in
the new plant. However, two new classifications—con­



Improvements in material handling in shipping
operations

Technological improvements in the shipping depart­
ment have improved productivity in the filling, han­
dling, and loading of bags of cement. Although about
90 percent of cement is shipped in bulk carriers, the
balance is transported in bags, which involves a series
of labor-intensive operations to fill, handle, and load
them. Developments in bag-filling machines, automatic
palletizing, forklifts, and automation of recordkeeping
have reduced labor requirements significantly. A fully
automated bag-packing line reportedly will lower labor
requirements by more than two-thirds compared to con­
ventional, nonautomated facilities.

Output and Productivity Trends
Output

Demand for hydraulic cement is tied closely to the
level of construction activity. Over the period 1970-84,
output of hydraulic cement (BLS measure) rose in 9
years and declined in 5 years (see chart 8). However,
the overall result was that output declined at an aver­
age annual rate of 0.7 percent over the entire period.
During 1970-73, for example, output of hydraulic ce­
ment increased at an annual rate of 5.0 percent, as the
32

Chart 8.

Output per employee hour and related data, hydraulic cement, 1970-84

Ratio scale (1977 = 100)




Ratio scale (1977 = 100)

33

ciner kilns. Factors which could dampen prospects for pro­
ductivity growth include import competition from highly ef­
ficient cement plants located overseas which could slow U.S.
expansion and, according to some observers, the higher than
anticipated cost of operating new energy-efficient kilns and
other new production equipment, which could slow their rate
of diffusion.

value of construction put in place rose sharply. How­
ever, after 1973, output growth turned around and, dur­
ing 1973-78, declined at an annual rate of 0.3 percent.
It fell more sharply during the more recent period,
1978-84, at an annual rate of 2.7 percent. The declines
were particularly pronounced during the recession years
1974-75 and 1981-82, when the decline in output in both
periods exceeded 10 percent. In the recovery after 1982,
output reversed direction and increased at an annual
rate of 10.7 percent from 1982 to 1984.
According to the U.S. Department of Commerce, the
value of cement shipments is projected to increase an
average of about 2 percent a year as construction ac­
tivity intensifies—particularly in the South and West.
The cement industry has long been characterized by
cycles of oversupply and acute shortage—a situation
which may be moderated because of recent additions
to capacity in the South and West, where demand for
cement is projected to be strong, and cutbacks in areas
where demand will likely be lower.6

Investment
Capital expenditures by the cement industry have
been increasing as producers modernize and construct
new plants incorporating the latest production tech­
nologies. Over $2.5 billion (constant 1972 dollars) was
spent for new plant and equipment by the industry from
1970 to 1982.7An outlay of $273 million (1972 dollars)
in 1975 following 5 years of successive increases marked
an 18-year high for investment in the industry. Annual
spending fluctuated at lower levels between 1975 and
1982—mainly in response to demand conditions.
A major share of expenditures went to install the ex­
pensive new dry process, suspension preheater kilns in
both new and existing plants. The retirement of less
fuel-efficient, smaller capacity kilns accompanied these
installations. Major expenditures also were made for
roller mills and other improved raw material grinding
equipment, for technology to convert from oil and natu­
ral gas to less expensive coal in kiln firing, and to in­
troduce expensive air pollution control technology
which, in some cases, amounted to a quarter of the cost
of a new plant.
The substantial capital requirements of cement manu­
facture are reflected by the industry’s high outlay per
production worker, which averaged over three and
one-half times that of manufacturing as a whole during
1970-82.
In the near term, available capital funds are expected
to be directed primarily to efficiency-improving projects
in existing plants to reduce costs. Additional emphasis
on automation, including computer process control, also
may further reduce labor and energy requirements.
However, expansion and modernization have been
slowed by factors such as import competition and lower
prices for cement.

Productivity

Productivity in the cement industry has increased
relatively slowly. Between 1970 and 1984, output per
employee hour (BLS index) rose at an average annual
rate of 1.7 percent—well below the 2.3-percent annual
growth rate in manufacturing over the same period.
During 1970-73, output per employee hour increased
sharply—by an annual rate of 5.2 percent. This gain
resulted when output increased at an annual rate of 5.0
percent, and employee hours fell at an annual rate of
0.2 percent.
With the falloff in output after 1973, productivity
growth also fell sharply. During 1973-78, output per
employee hour increased at a substantially lower annual
rate of 1.2 percent. Over the following 6-year period,
1978-84, however, output per employee hour rose at an
annual rate of 3.3 percent due to the strong annual rate
of increase of 14.5 percent during 1982-84 as the
economy recovered from recession and demand for ce­
ment rose significantly.
The largest annual decline in output per employee
hour—9.4 percent—was from 1979 to 1980, when out­
put moved lower by 11.2 percent and employee hours
fell by 2.0 percent.
The outlook for productivity change in the cement
industry is difficult to assess. However, several trends
underway suggest that prospects for productivity
growth may be more favorable in the latter part of the
1980’s. These include projected higher levels of output
and utilization of capacity and further outlays for new
technology, including the more efficient preheater/precal-

Employment and Occupational Trends
Employment

Employment in the cement industry declined between
1970 and 1985 as production facilities were consolidated

7 U .S. Departm ent o f C om m erce, Bureau o f Industrial E conom ics,
O ffice o f R esearch, A n alysis and Statistics. 1982 is the latest year for
w h ich these data are available.

6 U.S. Department o f Commerce, International Trade Administration, 1986
Industrial Outlook, pp. 2-9.




34

and new production technology was introduced (chart
9). In 1985, 23,400 workers (BLS data) were employed
in U.S. cement plants—9,900 fewer than in 1970. The
decline in nonproduction workers (down 33 percent)
was more severe than for production workers (down
29 percent). Over the period 1970-84, the number of
plants manufacturing portland cement declined by 21
percent from 178 to 141.8
9
The trend in employment for selected periods fol­
lowed the trend in output. Over the broad span of years
1970-85, employment declined at an average annual rate
of 2.0 percent. For the periods 1970-73 and 1973-78,
employment declined at an identical annual rate of 0.8
percent. Over the more recent period 1978-85, how­
ever, the rate of decline was much more severe—down
by an annual rate of 5.1 percent as output fell off sharply.
The largest year-to-year declines were associated with
the recession years of 1974-75 and 1981-82, when em­
ployment declined by 6.0 percent and 10.0 percent, re­
spectively. The number employed in the cement indus­
try in 1985 was the lowest since 1970.
The longer term outlook is for employment in hy­
draulic cement to continue to decline. BLS projects
that employment may fall to 19,210 in 1995 (moder­
ate-growth projection)—an average annual rate of de­
cline of 2.0 percent between 1985 and 1995/

ate the cement plant from a central control room. This
is a highly skilled job which requires a thorough knowl­
edge of all aspects of cement production. Employees
assigned to these new positions received training as de­
scribed in the following section on adjustments to new
technology. Prior to computer control, operators
monitored panels immediately adjacent to various pro­
duction processes located throughout the cement plant.
New positions also were added in the laboratory and
in rock storage and process operations. In accordance
with the general industry trends mentioned earlier, the
complex of innovations at this plant also resulted in the
elimination of semiskilled operator, helper, and other
positions in the kiln, finish mill, raw mill, and other
plant units.
The maintenance work force in cement plants also
has been affected by new technology. New equipment
frequently incorporates sensors which provide advance
notice of impending costly breakdowns so that correc­
tive action can be taken. Maintenance requirements in
modern cement plants also are lower because fewer
machines are in place compared to older facilities. How­
ever, maintenance tasks associated with advanced tech­
nology are more complex and involve a knowledge of
electronics.
Adjustment of workers to technological change

A substantial majority of the work force in the ce­
ment industry is covered by collective bargaining agree­
ments with the Cement, Lime, Gypsum and Allied
Workers Division of the International Brotherhood of
Boilermakers—the major union representing workers in
the cement industry. Provisions in these agreements
such as those that relate to seniority, advance notice of
impending technological change, training, and reassign­
ment of workers are applicable when employees are af­
fected by the introduction of computer process control
and the other innovations described in this report.
The implementation of training programs has been a
major method of adjustment of the work force to the
changing requirements of new technology. At one new
cement plant which features an advanced computer
process control system, for example, the training pro­
gram developed by the company to prepare employees
to staff new control room operator positions was suc­
cessful in preparing employees to function with the new
equipment. At this facility, applicants for the new op­
erator positions who passed a vision examination and
qualifying tests administered by the State were selected,
on the basis of seniority, to receive intensive on-the-job
and classroom training extending over 9 months. Train­
ing was at company expense and provided during duty
hours. Those who completed the training course were
promoted to the relatively high-paying new control
room operator positions.
In addition to technological changes in operating

Occupations

New technology appears to have resulted in changes
in the structure and content of some key occupations,
including operator and maintenance positions, where
job requirements have changed after modernization.
Specific production worker occupations affected by
new technology and declining in importance include
semiskilled operatives, transport equipment operatives,
and laborers. In contrast, control room operators and
skilled maintenance workers have increased in relative
importance as more complex technologies have been
adopted.
The introduction of computer process control is an
innovation which has had a significant impact on oc­
cupations at plants visited by BLS. At one of the most
advanced cement plants in the United States, for exam­
ple, an extensive modernization program in the early
1980’s featured a state-of-the-art computer process con­
trol system, a preheater kiln, a roller mill, and other
innovations being adopted more extensively through­
out the industry. Among new jobs created was control
room operator, whose major responsibility is to oper­
8 Bureau o f M ines, Minerals Yearbook, 1970 and 1984 editions.
9 B L S projects three levels o f industry em ploym ent for 1995 based
on alternative versions o f economic growth: A low, moderate, and
high level. T he lo w projection for hydraulic cem ent is 18,380; the
high projection is 19,740. For details on assumptions and m eth odol­
o g y used to dev elo p these projections, see the Monthly Labor Review,
N ovem ber 1985.




35

Chart 9.

Employment in hydraulic cement, 1970-85, and projections, 1985-95

Employees (thousands)

Employees (thousands)

40

40

35

35
All employees

30

25

High

Moderate'

20

20

Low ^

15

Average annual percent change'

15

All em ployees
1970-85 ..................................... -2 .0
1973-78.................................. -0 .8
1978-85.................................. -5 ,1

10

10

1985-95 (moderate projection)1 -2 .0
2
Production w orkers
1970-85 ..................................... -1 .9
1973-78.................................. -0 .5
1978-85.................................. - 5 .5

0

1970

l

l
72

I

l I l I l I l I l I l i
82
84
78
80
74
76

l

i

90

1 Least squares trends method for historical data; compound interest method for projections.
2 See text footnote 9.
Source: Bureau of Labor Statistics.




36

i

92

i

l

94

expired contracts, which began in 1984 and continued
with considerable conflict into 1985, resulted in some
concessions by the union in benefits and work practices.
The single issue of technological change was not para­
mount over this period. The negotiations have been
prolonged compared to past bargaining sessions in the
cement industry, with the departure from longstanding
pattern bargaining reported to be a major issue of
contention.

plants, workers in the cement industry have been af­
fected by the closing down of less-efficient facilities as
a result of foreign imports of cement, high energy costs,
expenses related to air pollution control requirements,
and related factors. As indicated earlier, the number of
cement plants declined by 21 percent between 1970 and
1984.
As a recognition of these problems, bargaining be­
tween the union and cement producers to renegotiate

S E LE C T E D R EFER EN C ES
“G eneral Portland Plant U ses U nique C om p u ter/H an d lin g/B len d in g
System s,” R o c k P rodu cts, June 1981, pp. 60-64.

L evine, Sid. “P reheater/Precalciner K iln R eplaces Six W et-Process
K ilns,” P it a n d Q u arry, July 1983, pp. 52-59.

G rancher, R o y A . “U .S. Cement: R ecoverin g as a Changed Indus­
try,” P it a n d Q u a rry, July 1984, pp. 83-86, 88.

Mariano, Ann. “Im ports W eigh D o w n Cem ent,” The W ashington
Post, N ovem ber 3, 1984, pp. F8-9.

Hall, W illiam B. and Robert E. Ela. “C em ent,” M in e r a l C o m m o d ity
Profile. Bureau o f M ines, U .S. Departm ent o f Interior, 1978.

Pitcher, C.B. “Portland C em ent Industry, Profile: Bright Prospects
but M any C hallenges,” C on stru ction R eview , Septem ber/O ctober
1981, pp. 4-14.

H elm uth, Richard A ., F.M . M iller, T .R . O ’Connor, and N .R . G reen­
ing. “C em ent,” K ir k -O th m a r E n cy clo p ed ia o f C h e m ic a l Technology,
third edition, V o l. 5, pp. 163-193. John W iley and Sons, 1979.

Portland C em ent A ssociation. U.S. a n d C a n a d ia n P o rtla n d C e m e n t
In d u stry: P la n t In form ation S u m m a ry , D ecem ber 1984.

Huhta, Richard S. “L one Star’s N ew est C em ent Plant Rises Out o f
the O ld ,” R o c k P rodu cts, M arch 1982, pp. 52, 54-56.

Robertson, Joseph L. “Im pact Crushers C om e in W ide Range o f
Sizes and T yp es,” R o c k P rodu cts, M arch 1983, pp. 41-43.
Rukavina, M itchell. “Redfem : Best 5 Years C om ing,” R o c k P roducts,
February 1985, pp. 41-44.

L evine, Sid. “Mark 100 Years o f C em ent P roduction in T exas,” P it
a n d Q u a rry, D ecem ber 1982, pp. 34-39.

Tiggesbaum ker, P. and M. M uller. “T h e Influence o f Ball M ill Speed
on Energy Expenditure and Throughput Capacity,” P it a n d Q uarry,
July 1984, pp. 56-63.

L evine, Sid. “N e w M ojave Plant o f California Portland U nder C om ­
puter C ontrol,” P it a n d Q u a rry, July 1983, pp. 82-87.




37

Chapter 4. Wholesale Trade

Summary

group engaged in wholesale trade consists of agents,
brokers, and commission merchants, and they accounted
for slightly more than 10 percent of the total.
In terms of sales, however, the relative shares were
more evenly distributed between merchant wholesalers
and manufacturers. Merchant wholesalers held 58 per­
cent in 1982, while the manufacturers’ share was 31
percent. (The share of the third group mentioned above
was about 11 percent.) Over the decade 1972-82, whole­
salers increased their share while manufacturers reduced
theirs. With the exception of chemicals, the merchant
wholesalers held a larger share of sales than manufac­
turers in the major durable and nondurable goods sec­
tors. Manufacturers were involved in the wholesaling
of all goods except farm product raw materials and ac­
counted for more than one-third of the products dis­
tributed in many of the sectors.

The wholesale trade industry (SIC 50,51) is under­
going changes in marketing techniques and warehouse
technology. These developments are largely associated
with the availability of computer-based information and
technology systems which make possible geographic
expansion, better management controls, and enlarged
wholesale distribution functions. Increased competition
has accelerated the need to improve productivity and
reduce costs. However, computer technologies are still
not widely diffused, except for inventory control
systems.
Definitive measurements of wholesale trade produc­
tivity are not available, but output and hours data sug­
gest that productivity growth during the period 197085 averaged about 1.0 percent annually. However, in­
dustry representatives suggest that improved produc­
tivity through 1990 is likely, with fuller use of resources
associated with a wider range of functions and product
diversification by many firms.
Employment grew almost steadily during 1960-85 and
stood at the relatively high level of about 5.7 million
persons in 1985. The industry’s employment is projected
to grow through 1995, but at a slower rate than during
the 1970’s. Increases are projected through 1995 for all
major occupational groups. Occupations dealing with
data processing require training, and some shortages in
these occupations are a possibility.

Technology in the 1980’s
The industry’s major technologies involve the appli­
cation of computers or computer-like devices to the
important functions of processing data, controlling
equipment, and managing information. The improved
efficiency and accuracy in carrying out these functions
expedite the receipt of products, their movement within
warehouses, and their shipment to final destinations.
Lower unit labor requirements are often the result.
Computerized technologies also make it possible to
serve broader and more varied markets.
However, except for drug wholesalers, computer
technologies are still not widely diffused. Most firms
that have computers only utilize them in inventory man­
agement and accounting. A very small percentage of
all firms utilize computers or microprocessors in two
other functions—equipment control and information
management—while a still smaller proportion have sys­
tems that integrate control of all three functions with
a hierarchy of computers and microprocessors. Never­
theless, many firms have reduced their labor as well as
space requirements through automation of a limited area
of their facilities that contains frequently moved small
items.
In addition, deliveries are being provided virtually
on call (”just-in-time” inventory) through the applica­

Description of Industry
In addition to their primary function of selling mer­
chandise, wholesalers perform many other services for
their suppliers and customers. These include inventory
control for customers, extension of credit, physical as­
sembly, sorting and grading of goods in large lots, tech­
nical advice, and various types of promotion. Manufac­
turing firms which perform the wholesaling function
usually provide some, but not all of the same services.
The industry is comprised of three major sectors.
Merchant wholesalers, who sell and move goods from
producers to retailers or to commercial, industrial, or
other users, accounted for slightly more than 80 per­
cent of the establishments in 1982. The second group,
manufacturers’ sales branches and offices, accounted for
less than 10 percent of the establishments. The third



38

ice, some factors—such as picking and filling orders
from split cases and/or lack of uniformity in size of
parts—make it economically feasible to adopt only semiand not fully automated equipment.
Major technological changes in wholesale trade are
discussed below and presented in table 4 together with
their labor impact and diffusion. In general, these data
are limited to wholesaler-distributors.

tion of advanced warehouse technologies.1These serv­
ices are being provided for those manufacturers who
prefer that wholesalers assume a greater role in man­
aging inventories in order to reduce their own
inventories.2
Industry representatives cite the major factors that
are associated with the utilization of the most advanced
automated technologies by all wholesaling firms.3 The
largest firms (annual sales of over $100 million) and
firms which must provide service with rapid turnaround
time are most likely to adopt the latest, costly technolo­
gies that utilize only minimum work forces. However,
even when there is a premium on providing rapid serv-

Computerized data processing

Two of the principal applications of computerized
data processing are inventory control, and delivery
scheduling and vehicle load planning.
C om puterized inventory control system. Computers and
appropriate software have made it economically advan­
tageous to devise inventory control systems that greatly
improve the speed and accuracy of sales orders and
warehouse operations. With a computerized inventory
system, an inside salesperson, in telephone contact with
a prospective customer, can utilize a nearby keyboard
terminal and display screen for information on an item’s
availability, price, and closest location. Computer ter­
minals provide the same instantaneous or on-line infor­
mation for warehouse workers involved in the storage
and retrieval of goods. The system permits centralized
warehouses to supply satellite warehouses with only

1John A . W hite, “W arehousing in a Changing W orld,” Institute o f
Industrial Engineers, 198 3 In te rn a tio n a l C on ference on A u to m a tio n a n d
W arehousing P ro ceed in g s, p. 4; “ AS/RS and Just-in-Time: Partners in
Manufacturing,” M odern M a teria ls H andling, August 6, 1984, p. 56.
2 Arthur Andersen & Co., F u tu re T ren ds in W holesale D istr ib u tio n :
A T im e o f O p p o rtu n ity, prepared for the Distribution R esearch and

E ducation Foundation o f the National A ssociation o f W holesaler-D is­
tributors, W ashington, 1983, p. 14.
3T ypically, m anufacturing firms that have high ly autom ated facto­
ries— as for exam ple, food and pharm aceutical product m anufac­
turers— are also likely to have h igh ly autom ated equipment in their
w h olesale distribution warehouses. On the other hand, labor-inten­
sive manufacturing plants invariably rely upon manual operations in
wholesaling.

Table 4. Major technology changes in wholesale trade
Technology

Labor implications

Description

Diffusion

Unit labor requirements are sharply Currently in use by 25-40 percent of
wholesaler-distributors; expected
reduced for sales and clerical
to rise to 50-75 percent in 1990.
workers. Reduction is smaller
among warehouse workers.

Computerized inventory
control system

Computer terminals in the sales of­
fice and warehouse make it pos­
sible to generate on-line information
on a screen regarding the avail­
ability, price, and location of any
product.

Microprocessor-controlled
conveyor system

Microprocessors control the ware­ Unit labor requirements are reduced
house functions of storage and re­
at least 25 percent. Only modest
trieval and recording of selected
amount of programming needed.
information.

High stackers

Some stackers have computerized Computerized stackers sharply re­ Computer-controlled stackers are
widely diffused only in the largest
retrieval machines that are pro­
duce unit labor requirements for
grammed to store and retrieve ob­
travel within warehouse and in
firms. Limited by high cost and
jects automatically, but the most
picking materials. Operators re­
specialized functions.
common form of stacker is a spe­
quire specialized training for non­
cialized forklift.
computerized stackers having a
sideloading capability.

Automatic guided vehicles (AGV’s)

A battery-powered, driverless vehicle




that follows a low-frequency signal
transmitted through a guidepath or
wire installed on a warehouse
floor. Control is usually via an on­
board microprocessor that may
be linked to a central computer.
AGV's can interface with con­
veyors and form a crucial link
in an automated storage and re­
trieval system. Replaces forklifts.

39

Systems installed primarily by the
largest firms; will continue to be
utilized by the largest firms only.

Labor requirements in warehouses Currently these vehicles are being
are reduced by about one-third;
used primarily by the largest firms.
less product damage and reduc­
Greater diffusion is likely to occur
tion in required inventory are addi­
only among the largest firms.
tional advantages.

majority of firms in the industry.5Most merchant whole­
salers still rely upon such mechanical equipment as fork­
lifts and flow racks, with which the movement of ma­
terials is actuated by the force of gravity. The combi­
nation of microprocessor and computer-controlled
equipment with fully integrated storage and retrieval
systems requiring a minimum work force has not been
adopted widely.
Most of the work hours in a typical warehouse are
related to the movement of goods. An estimated 75
percent of labor’s activity is associated with such move­
ment. It is these work hours that are very sharply re­
duced by automated systems which expedite handling
and distribution of goods.
Identification technologies, such as bar coding, in
conjunction with computer-controlled equipment,
greatly increase the speed and accuracy of processing
information and the movement of goods into and out
of the warehouse. According to the experience of one
wholesale distributing firm, the number of cartons han­
dled daily increased more than 50 percent after bar code
scanning was introduced, and such improvement would
have been impossible with a manual system.6
Automatic identification technologies were estimated
by a survey to be in use in only 10 percent of the firms
in 1985, but accounted for a much higher proportion
of the industry’s sales. The survey projected that 25
percent of wholesaler-distributors would be utilizing
automatic identification devices in 1990.7

fast-moving items. Some customers even find it eco­
nomical to subscribe to the computer-based systems of
their wholesalers for the management of their own
inventories.
A major impact on labor is evident in a computer­
ized inventory system. Lower unit labor requirements
are associated with quicker turnaround time by sales,
clerical, and warehouse personnel. This is especially
evident when order entry terminals are located on the
premises of a wholesaler’s customers. This computer­
ized system enables customers to input orders them­
selves, and installation of such systems is expected to
increase rapidly through 1990. In some industries, e.g.,
drugs, this process is already very widely utilized. Or­
ders via electronic mail are also expected to increase
rapidly in some industries.
In addition, the automated inventory system enables
inside salespersons to assume some of the duties of out­
side salespersons. The inside sales force will receive
more telephone sales training, while the outside sales
force will receive promotional and marketing training.
Also, improved inventory management allows a lower
level of inventory because it provides warehouse
workers with accurate data rapidly.
Utilization of computerized inventory control sys­
tems is expected to increase among merchant whole­
salers. About 10-20 percent of wholesaler-distributors
used these systems in 1980 and an estimated 25-40 per­
cent in 1985. The proportion is expected to rise to 5075 percent in 1990.4

Microprocessor-controlled conveyor system

Conveyors with microprocessor controls greatly en­
hance the range of functions that can be performed by
making it possible to automate functions in a step-bystep fashion. These functions include not only the usual
one of moving materials, but also the generating, moni­
toring, recording, and reporting of operational data.
However, the versatile advanced conveyors, which
function with automatic loading/unloading, are very
expensive and have only been applied by firms that
handle a huge volume of products. A large distributor
may initially utilize a conveyor as a sorting system with
software and code scanners that identify products and
move them efficiently and at high speeds. Next, systems
could be introduced, for example, to monitor the time
required to select items for a shipment or to check
whether or not a shipment matches an original order.
More sophisticated systems combine with robots in or­
der to operate within a limited space or to reduce la­
bor requirements in slow, complex operations.

A
substantial share of all wholesale deliveries consists of
items of low volume, wide variety, and frequent deliv­
ery. Many wholesaler-distributors have therefore de­
cided that the most profitable and efficient operations
are likely to take place with the assistance of comput­
erized systems for delivery route scheduling and vehi­
cle load planning.
This use of computers is expected to increase in im­
portance. Industry representatives estimate that by 1990,
50 percent of the wholesaler-distributors will use com­
puterized systems for delivery route scheduling and ve­
hicle load planning. In 1980, a very small percentage
of wholesalers used such systems.
C om pu terized scheduling an d vehicle load planning.

Storage and retrieval equipment in warehousing

The wide variety of equipment used in warehouses
includes mechanical, electrical, computer-driven, and
almost fully automatic equipment involving a high de­
gree of electronic control. However, only the easier
warehouse functions have been automated by the great

5John A . W hite and M ichael A . M ullens, “M anagem ent Support
System s for W arehousing,” A n n u a l C on ference P roceedings, T h e N a ­
tional C ouncil o f Physical Distribution M anagem ent, 1984, p. 561.
6M od e rn M a te ria ls H a n d lin g , D ecem b er 10, 1984, p. 57.
’ Andersen, F u tu re T ren ds, p. 33.

4Andersen, Future Trends, p. 33.




40

to be in use by 75 percent of the largest wholesalers.
Their rate of diffusion is expected to increase but will
remain limited to the largest firms.
Usage of the standard, semiautomatic conveyor is ex­
pected to triple between 1982 and 1990. Diffusion of
this conveyor will increase from 17 percent to about
50 percent of the wholesaler-distributors.9
High stacker

Semiautomated and computerized machines that are
programmed to store or retrieve objects in any prede­
termined location with reduced labor input are among
the most technically advanced of various types of high
stackers. The semiautomated stackers, which have a
sideloading capability, increase the utilization of cubic
space by traveling operatorless on wire guides within
narrow aisles. An operator is needed to steer this type
of stacker only when it travels on the main aisles of a
warehouse.
The semiautomatic, computerized stackers decrease
storage and retrieval time within a warehouse and can
sharply reduce the unit labor requirements for opera­
tors by two-thirds to three-fourths, according to an in­
dustry representative. The stacker’s contribution to im­
proved productivity is evident when several orders are
filled automatically and simultaneously with items
stored in a high, inaccessible area of a warehouse.
Efficiency is also enhanced on a noncomputerized
high stacker (a specialized forklift with a 25- to 30-foot
reach), although operators of these stackers may require
specialized training for sideloading.
The semiautomatic computerized stackers are rather
widely diffused, but only among the largest merchant
wholesalers and manufacturing firms, and it is likely
that more of these firms will introduce fully automated
machines into some of their operations. Even the non­
computerized stackers are in use by only the larger
merchant wholesalers, and their diffusion is likely to
increase to only about 25 percent in 1990. The consid­
erable cost of these high stackers and their specialized
functions limit diffusion.

Warehouse workers use a microprocessor-controlled conveyor system for
storage, retrieval, and shipment o f drugs.

The conveyor’s synchronization of data with the flow
of materials reduces unit labor requirements at least 25
percent and affects the skills in several occupations, ac­
cording to an industry specialist. In some cases, require­
ments for clerical workers, who basically perform a
bookkeeping function, are reduced, and these workers
usually do not move into the newly required position
of programmer. Generally, the operatives involved in
material handling become monitors of the conveyors’
operations and must acquire the limited knowledge of
handling information and product flow that enables
them to make needed occasional adjustments on the
conveyors. Maintenance personnel must have enough
knowledge of how the computer operates to be able to
maintain and repair the conveyors.
Microprocessors or computer-controlled
equipment (including conveyors) are also being applied
to so-called miniload storage and retrieval systems, in
which more frequently moved small items are handled
separately.
While a miniload system may improve efficiency even
when manually operated, the improvement is maximized
when the system has microprocessor or computer con­
trols of storage and retrieval equipment. For example,
in one automobile parts warehouse, the computerized
miniload system contained one-third of the parts in the
entire inventory, but those parts accounted for 60 per­
cent of the firm’s inventory transactions. The labor re­
quirements for the miniload system were only one-sev­
enth of the labor that was involved with the total in­
ventory system. While only one picker was needed for
the miniload system, six pickers were needed for the
rest of the inventory in this warehouse.8
Microprocessor-controlled conveyors are estimated
M iniloads.

Automatic guided vehicle (AGV)

AGV’s are battery-powered and driverless vehicles,
but they vary in their controls for picking and deliver­
ing materials. Some AGV’s are controlled by central
computer, but, increasingly, the preferred vehicles are
controlled by an onboard microprocessor, which may
be linked to a central computer. The vehicles follow a
low-frequency signal that is transmitted through a
guidepath or wire installed on a warehouse floor. AGV’s
can interface with conveyors, vertical lifts, or other
equipment, forming a link with the automated portions
of a storage and retrieval system.

8 Modem Materials Handling—1984 Casebook Directory Issue, Vol.
38, N o. 17, p. 149.




9 Andersen, Future Trends, p. 33.
41

The microprocessor-controlled AGV’s maximize ef­
ficiency through faster movement of materials. This in­
volves avoiding collisions and routing over optimum
routes. Usually, the operations of AGV’s are monitored
on a terminal screen in a supervisor’s area.
AGV’s reduce unit labor requirements by about onethird because of elimination of forklift drivers and the
reduced storage and retrieval time. Less product dam­
age, greater accuracy in filling orders, and reduction in
required inventory could also be advantages of the ve­
hicles. Maintenance is simplified if onboard microprocessors
provide diagnostic information about the AGV’s operations.
These vehicles are likely to be substituted increas­
ingly for forklift trucks among the larger firms.

Output and Productivity Outlook
Output

Although reliable output data are not available for
the wholesale trade industry, the value that wholesale
trade adds to the gross national product (adjusted for
price changes) may be used as a rough measure of out­
put. These data suggest an average annual growth rate
of about 3 percent in 1970-85, considerably slower than
the growth rate of the 1960’s of more than 5'/i percent
(chart 10). Output declined in the 2 recession years,
1974 and 1980. The industry recovered in 1984 and
1985, with sharp increases of more than 12 and 5 per­
cent, respectively.
Looking ahead to 1990, wholesaler-distributors ex­
pect to add several new services for their suppliers
(usually manufacturers) and customers that will con­
tribute to output growth.1 While inventory manage­
0
ment for suppliers and customers will remain the most
frequently performed service by wholesalers, a wider
range of services will be offered. These will include
educational seminars and training for their customers,
market research and analysis, product marketing, and
financial management services. The primary reason for
suppliers and customers to turn to wholesalers for these
services is the belief that wholesalers can perform them
more cost effectively. It is interesting to note, however,
that extension of credit, which used to be very impor­
tant, may be reduced by 1990.

grew at an average annual rate of about 1 percent dur­
ing 1970-85, similar to the rate for the entire business
sector of the economy.
The industry’s productivity increased at an average
rate of about 4 V percent during 1970-73, but had virtually
i
no growth during 1973-80, as productivity declined in 4
years—1974, 1976, 1979, and 1980. In 1980-85, however,
productivity advanced about 3.0 percent annually, or about
80 percent of the rate in the 1960’s. This growth in the first
half of the 1980’s reflected an increase in output of nearly
5.0 percent and an associated hours increase of less than 2.0
percent.
The outlook for productivity growth in 1985-90 is
not clear, but industry representatives anticipate that
output will grow at about the rather high level of the
first half of the decade.1 At the same time, laborsaving
1
technologies (previously considered) are expected to be
more widely utilized. These technologies, according to
91 percent of the respondents to a survey of members
of the National Council of Physical Distribution Manage­
ment, are mainly responsible for higher productivity.1
2
The wholesalers’ fuller use of their resources through
the handling of an increased diversity of products, geo­
graphic expansion, and the performance of more mar­
keting functions is also likely to increase sales and im­
prove productivity. For some firms, this would require
investments in computers for inventory control and
microprocessor-controlled equipment in the warehouse.
Leading to improved productivity are new sales and
management techniques, incorporating sophisticated in­
formation systems, which make servicing possible via
the telephone. The continued growth in the application
of such computer systems increases the efficiency of
sales personnel.
Also, more widespread use of national standardized
order systems would increase efficiency, but would re­
quire greater cooperation of efforts of wholesalers, sup­
pliers, and customers. One of the components of such
systems—standard product numbering and marking—is
expected to be used by over 90 percent of manufac­
turers and wholesaler-distributors by 1990.1
3

Investment
Capital expenditures

Capital expenditures in wholesale trade (data avail­
able only for merchant wholesalers at 5-year intervals1)
4
increased sharply for each of the years 1967, 1972, 1977,

Productivity

Because of the limitations of available data, the Bu­
reau of Labor Statistics does not publish measures of
productivity for the wholesale trade industry. However,
the trend in productivity change can be approximated
from estimated output and hours data for all persons.
These data suggest that productivity in wholesale trade

“ Ibid., p. 12.
1 Bernard J. L aL on de and Richard Brand, “Career Patterns in D is­
2
tribution: Profile 1982,” in Annual Conference Proceedings, The Na­
tional C ouncil o f P hysical Distribution M anagem ent, V o l. 1 (San
Francisco, 1982), p. 30.
1 Andersen, Future Trends, p. 29.
3
14 Census of Wholesale Trade.

»°Ibid., pp. 14, 34.



42

Chart 10.

Output and hours of all persons, wholesale trade, 1970-85

Ratio scale (1977 = 100)

Ratio scale (1977 = 100)

p = preliminary.
Sources: U.S. Department of Commerce, Bureau of Economic Analysis; and Bureau of Labor Statistics.

will be related to the development of new products and
markets. Investment for new warehouses is expected to
decline, in part because space requirements will fall as
a result of improved inventory management.1
6

and 1982, even when account is taken of price changes.
Real capital expenditures (in constant 1972 dollars)1 by
5
the merchant wholesalers in 1982 (latest data) totaled
about $6.6 billion, 2.6 times more than in 1972. By
comparison, 1982 real investment by the private busi­
ness sector for equipment and structures was only 39
percent higher than in 1972 (BLS data).
Moreover, in view of the extensive practice of leas­
ing and renting in this industry, data on capital expendi­
tures do not include all of the industry’s outlays for
buildings and structures, and machinery and equipment.
Census data for 1982 (most recent data available) indi­
cate that lease and rental payments were as much as 60
percent as large as new capital expenditures.
Capital expenditures are expected to increase through
1990 to accommodate internal growth and mergers and
acquisitions. This will include substantial outlays for
laborsaving equipment such as warehouse mechaniza­
tion and computer equipment. Some of the equipment

Employment and Occupational Trends
Employment

Wholesale trade employment increased at an annual
rate of 2.5 percent during 1970-85 (chart 11), approxi­
mately the same rate as in 1960-70. Employment rose
almost steadily through the two decades but the rate
of growth slowed in 1978-85 to 1.6 percent annually.
This reflected employment declines in 1982 and 1983.
Since 1960, employment had fallen only twice before,
in 1961 and 1975. However, by 1985, employment stood
at 5.7 million persons, a new peak. This represented 7.0
percent of total private nonagricultural employment.
Employment grew somewhat faster in the durable
goods sector than in the nondurable goods sector of
wholesale trade from 1972 (earliest data available) to
1985. In 1985, 59 percent of all wholesale trade em­
ployees were in the durable goods sector.

1 Data deflated for price changes by the price deflators for equip­
5
ment and structures in w h olesale and retail trade o f Bureau o f E c o ­
nom ic Analysis o f the D epartm ent o f Com m erce.
16Andersen, Future Trends, pp. 39-40.




43

Chart 11.

Employment in wholesale trade, 1970-85, and projections, 1985-95

Employees (millions)

Employees (millions)

'Least squares trends method for historical data: compound interest method for projections.
2
See text footnote 17.
Source: Bureau of Labor Statistics.




44

Women employees increased 77 percent from 1970
to 1985. By 1985, they accounted for 28 percent of the
industry’s total employment, compared with an aver­
age of 51 percent in all private service-producing
industries.
The percentage of nonsupervisory workers in whole­
sale trade has shown a gradual, steady decline since
1960. In 1985, they accounted for about 80 percent of
all wholesale employees, compared with 86 percent in
all private service-producing industries.
Looking ahead—from 1985 to 1995—BLS, on the
basis of its moderate-growth projection, projects an av­
erage annual increase in employment of 1.4 percent.1
7
Advances are projected to be considerably greater for
the durable goods sector than for the nondurable goods
sector.
Occupations

Despite sharp differences in growth rates among the
major occupational groups, the occupational distribu­
tion will show little change from 1984 to 1995.
Employment in each group is expected to increase,
according to BLS (table 5). The two major occupa­
tional groups—marketing and sales, and administrative
support, including clerical—are expected to continue
to account for more than 55 percent of all employees
in 1995. While the administrative support group is ex­
pected to increase at the slowest rate over the period
for any group (by less than 7 percent), an increase of
over 28 percent is projected for marketing and sales
workers.
Two smaller occupational groups—managerial and
management-related occupations, and transportation
and material-moving machine and vehicle opera­
tors—are expected to increase 24 and 16 percent, re­
spectively. However, they will each continue to ac­
count for 10 percent of all employees.
Two comparatively small occupational groups—en­
gineers and computer systems analysts, and the techni­
cian occupations—are expected to experience the most
rapid advance during 1984-95. Each group will expand
by over 40 percent, but together the groups will still
account for less than 5 percent of all employees. To
some extent, this growth reflects expanded computer
applications. Helpers, laborers, and manual material
handlers, will be among the slowest growing occupa­
tions, projected to increase by about 8 percent over the
period.
A radical shift in the composition of the sales occu­
pations is expected by 1990, when the number of inside
salespersons may increase to roughly the same number
as outside salespersons. Currently, outside salespersons
1
7
BLS projections for 1995 are based on three alternative versions
o f econ om ic grow th for the overall econ om y. T he alternative as­
sumptions are described in the N ovem ber 1985 issue o f the Monthly

Labor Review.




45

constitute about 60 percent of the total in sales occu­
pations. The shift is expected to result from the increas­
ing cost of field sales operations and the availability of
advanced information and marketing systems to serv­
ice customers from multiple distribution outlets. As
mentioned earlier, job skill requirements are likely to
change with the diffusion of the new technologies.
Adjustment of workers to technological change

Programs to protect workers from the adverse effects
of changes in machinery and methods may be incorpo­
rated into union contracts or they may be informal ar­
rangements between workers and management. In gen­
eral, such programs are more prevalent and detailed in
formal contracts.
In the wholesale trade industry, the International
Brotherhood of Teamsters, the Food and Commercial
Workers International Union, and the International
Longshoremens’ and Warehousemen’s Union represent
about 15 percent of the employees. Worker coverage
is considerably higher in warehouse-related operations,
for such occupations as freight handler, forklift opera­
tor, and truckdriver, than in office operations.
Seniority provides a measure of job security in the
agreements of this industry when technological change
results in the permanent layoff of workers. This secu­
rity is likely to be enhanced when an agreement also
contains a clause requiring notification of the union in
advance of the introduction of new machinery or
methods, and discussion by labor and management of
the impact of any layoffs upon employees. A clause of
this sort is often found in agreements covering 1,000 or
more employees. Notification of a union representative
before the usage of new equipment is generally required
for the purpose of negotiating a wage scale for the
equipment.
Reemployment rights are also generally based on sen­
iority in labor-management contracts and extend up to
24 months at the same location. Typically, seniority
rights do not extend to another location of the firm be­
cause contracts provide for separate seniority lists for
each branch or warehouse. However, in case of per­
manent transfer of workers to another location of a firm
(e.g., when separate distribution centers are merged)
and also if a location is permanently closed, seniority
does apply. Workers who lose their jobs because an
employer goes out of business or terminates operations
may receive a lump-sum severance payment that is com­
monly made on the basis of years of service.
Training and retraining may be specified in a union
contract as means of aiding worker adjustment to tech­
nological change or improving worker earnings. In one
contract, the driver-salespersons are expected to attend
“sales and training’’ sessions. Another contract requires
the employer to assume the cost of training for driving
a tractor-trailer.

Table 5. Projected changes in employment in wholesale trade by occupational group, 1984-95

Occupational group

Number of employees
(thousands)

Percent of industry
employment

Percent change
in number of
employees
1984-95

1984

1995

1984

1995

T o tal....................................................

5,549.8

6,577.6

100.0

100.0

18.5

Managerial and related occupations...........

530.3
60.6
139.2
1,451.4

658.7

9.6

10.0

86.1

1.1

197.2
1,858.9

2.5
26.2

1.3
3.0
28.3

24.2
42.2
41.5
28.1

1,717.7
81.5
366.9
59.5

1,829.8
98.9
■ 463.0
80.8

30.9
1.5

141.6

168.8

574
250.9
165.1

Engineers and computer systems analysts
Technician occupations ..............................
Marketing and sales occupations
Administrative support occupations,
including clerical
Blue-collar worker supervisors
Mechanics, installers, and re p a ire rs ...........
Precision production occupations
Machine setters, set-up operators,
operators, and tenders
Transportation and material moving
machine and vehicle operators
Helpers, laborers, and material
movers, h a n d .............................................
All other occupations

27.8
1.5
7.0

1.2

6.5
21.3
26.3
16.3

2.5

2.6

19.2

668.7

10.4

10.2

16.3

271.7
195.2

4.5
3.0

4.1
3.0

8.3
18.2

6.6
1.2

____________

Source: Bureau of Labor Statistics.

pliers’ factories for instruction.
In general, training for most occupations will con­
tinue to be provided on the job. However, training for
data processing will be largely provided by professional
training firms, colleges and universities, and trade as­
sociations. According to an industry-sponsored study,
a shortage of data processing personnel is a possibility
in the near future.1
8

More often, however, training and retraining are con­
ducted in the absence of particular specification in the
agreement. For instance, a wholesaler-distributor of
electrical items has a “high tech” facility in one of its
locations that is utilized to provide demonstration as
well as instruction on the capabilities of new prod­
ucts—for example, programmable controllers—to the
firm’s sales personnel, as well as to prospective cus­
tomers. Since sales personnel have to learn about new
products continuously, they may also be sent to sup­

18Andeirsen, Future T rends, pp. 19, 36.

S E LE C T E D R E FE R E N C E S
Arthur Andersen & Co. F u tu re T ren ds in W holesale D istrib u tio n : A
T im e o f O p p o rtu n ity. F or Distribution R esearch and Education
F oundation o f the N ational A ssociation o f W holesaler-D istribu­
tors, W ashington, D .C ., 1983.

G rottke, R obert L. and James W. Norris. Im p ro vin g P ro d u c tiv ity a n d
P rofits in W holesale D istrib u tio n , W ashington, D .C ., T h e D istribu­
tion R esearch and E du cation F oundation o f the N ational A sso cia ­
tion o f W holesaler-D istributors, 1981.

“A S /R S and Just-In-Time: Partners in M anufacturing,” M od e rn M a ­
teria ls H a n d lin g , A u gust 6, 1984, pp. 56-62.

La Cagnina, M ichael L. “O m ega Im proves P rod uctivity 50% ,” in
A n n u a l C on ference P roceedings, V olu m e 1, T h e N ational C ouncil
o f Phy sical Distribution M anagem ent, San F rancisco, O ctober 1013, 1982, pp. 293-314.

“A utom ated Storage and R etrieval,” I n d u s tria l D istrib u tio n , M ay
1982, pp. 205-08.

La L onde, Bernard J. and Richard Brand. “Career Patterns in D is­
tribution: Profile 1982,” in A n n u a l C on ference P roceedings, V ol. 1,
T h e National C ouncil o f Physical Distribution M anagem ent, San
F rancisco, O ctober 10-13, 1982, pp. 26-52.

“A utom ated System s L et U s Centralize W arehousing,” M o d e rn M a ­
teria ls H a n d lin g , N ovem b er 19, 1984, pp. 64-68.
“Com puter-Integrated System s— T h e B ig Trend in H andling,” M o d ­
ern M a te ria ls H a n d lin g , M ay 20, 1982, pp. 38-45.

M o d e rn M a te ria ls H a n d lin g — 1 984 C aseb o o k D ire c to ry Issue, V o l 38

N o. 17.
“Com puter-Integrated W arehousing: Trucks A re the K ey at Sh aw ’s,”
M o d e rn M a te ria ls H a n d lin g , N ovem ber 5, 1984, pp. 40-44.

W hite, John A . “W arehousing in a C hanging W orld ,” 1983 In te r­
n a tio n a l C on ference on A u to m a tio n a n d W areh ou sin g P roceedings,

Institute o f Industrial E ngineers, pp. 3-6.

“Com puters T ake C ontrol in M anufacturing and W arehousing,” M o d ­
ern M a te ria ls H a n d lin g , N ovem ber 19, 1984, pp. 46-53.

W hite, John A . and M ichael A . M ullens. “M anagem ent Support S y s­
tems for W arehousing,” in A n n u a l C on ference P roceedings, T h e N a ­
tional C ouncil o f Physical Distribution M anagem ent, 1984, pp.
558-566.

“G rocery W arehousing: T h e Jobs that Trucks Can D o ,” M ode rn M a ­
teria ls H a n d lin g , February 6, 1984, pp. 54-61.




46

Other BLS Publications
on Technological Change

pact on productivity, employment, and occupations.

Bulletins still in print may be purchased from the Su­
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Technological Change and Its Labor Impact in Five Energy
Industries* Bulletin 2005, 1979), 64 pp. Out of print.

Appraises major technological changes emerging in
meat products, foundries, metalworking machinery, and
electrical and electronic equipment and discusses their
current and potential impact on productivity, employ­
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Technology, Productivity, a n d L a b o r in the B itum inous
C o a l Industry, 1950-79* (Bulletin 2072, 1981), 69 pp.

Out of print.
Chartbook with tables and text; appraises some of the
major structural and technological changes in the
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Technology a n d Its Im p a ct on L a b o r in F our Industries

(Bulletin 2242, 1986), 46 pp. Price $2.75.
Appraises major technological changes emerging in
tires, aluminum, aerospace, and banking and discusses
their current and potential impact on productivity, em­
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Technology a n d L a b o r in Five Industries* (Bulletin
2033, 1979), 50 pp. Out of print.
Appraises major technological changes emerging in
bakery products, concrete, air transportation, telephone
communication, and insurance and discusses their cur­
rent and potential impact on productivity, employment,
and occupations.

The Im p a ct o f Technology on L a b o r in F our Industries

(Bulletin 2228, 1985), 49 pp. Price $2.25.
Appraises major technological changes emerging in
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cles and discusses their current and potential impact on
productivity, employment, and occupations.

Technological Change a n d Its L a b o r Im p a ct in Five
E nergy Industries* (Bulletin 2005, 1979), 64 pp. Out of

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print.
Appraises major technological changes emerging in
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petroleum pipline transportation, and electric and gas
utilities and discusses their current and potential impact
on productivity, employment, and occupations.

Appraises major technological changes emerging in
hosiery, folding paperboard boxes, metal cans, and laun­
dry and cleaning and discusses their current and poten­
tial impact on productivity, employment, and
occupations.
The Im p a ct o f Technology on L a b o r in Five Industries

Technological Change a n d Its L a b o r Im p a ct in Five
Industries* (Bulletin 1961, 1977), 56 pp. Out of print.

(Bulletin 2137, 1982), 60 pp. Out of print.
Appraises major technological changes emerging in
printing and publishing, water transportation, copper
ore mining, fabricated structural metal, and intercity
trucking and discusses their current and potential im­

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