Why is there a shortage of manpower in the manufacturing and logistics industries? Introducing the reasons and countermeasures for labor shortages.

In the manufacturing and logistics industries, a serious shortage of manpower is expected to occur in the future. With Japan as a whole experiencing an aging population and declining birth rates, simply advertising job openings will not be sufficient to address the labor shortage. This article will introduce the reasons behind the worsening shortage of manpower in manufacturing and logistics fields, as well as provide tips for addressing the problem.

Why is there a labor shortage in the manufacturing and logistics industries?

It is evident from the data that many manufacturing and logistics companies are facing a labor shortage. Specific challenges include the prominent signs of the '2030 Problem' and a shortage of personnel to train skills.

The "2030 Problem"

The '2030 Problem' refers to a term encompassing the highly probable social issues that may arise in Japan around the year 2030. With the aging population progressing and Japan entering a society of population decline, it is predicted that the current workforce of approximately 70 million will decrease to around 63 million by 2030. This represents a decrease of approximately 10%.

Furthermore, the '2030 Problem' is not limited to a decrease in the workforce. Traditionally, the manufacturing and transportation industries have been predominantly composed of adult males. However, it is expected that this proportion will decrease in the future, with an increase in the proportion of women, older adults, and foreigners. Therefore, it is challenging to directly transfer physically demanding tasks, which have been reliant on adult males, to women or older adults. Additionally, there is the challenge of assigning tasks to foreigners who may not be proficient in Japanese.

A shortage of personnel to train skills

In the manufacturing sector, the proportion of workplaces facing challenges related to capability development and talent cultivation has consistently exceeded 70% in recent years. According to surveys conducted in the fiscal year 2021, this proportion reached 84.8%, the highest level since surveys began in fiscal year 2008. Furthermore, compared to other industries, the manufacturing sector consistently exhibits a higher proportion of these challenges.

Examining the specific issues concerning capability development and talent cultivation, the highest is the lack of personnel with mentoring skills, at 62.4%. This is followed by insufficient time for talent cultivation, turnover of trained personnel, and difficulty in attracting talented individuals, in that order. Particularly concerning is the high proportion regarding the shortage of personnel with mentoring skills and the difficulty in attracting talented individuals, compared to other industries.



Given these looming issues, securing talent is an urgent priority for the manufacturing and logistics industries. However, due to the factors outlined below, attracting people has proven to be quite challenging.

The Three Causes of Labor Shortage in Manufacturing and Logistics Industries

Mainly, there are three factors exacerbating the labor shortage in manufacturing and logistics fields.

The aging population is advancing.

The aging population is progressing across society, but it is particularly pronounced in the manufacturing and logistics sectors. For example, looking at the proportion of individuals aged 65 and above compared to those aged 15 to 34 in the manufacturing industry, the proportion of those aged 65 and above increased from 4.5% in 2000 to approximately 8.8% in 2019, nearly doubling. Conversely, the proportion of those aged 15 to 34, which was over 30% in 2000, decreased to 24.8% in 2019.



When there are few young workers and a high proportion of middle-aged and elderly workers, it becomes increasingly difficult to secure the necessary workforce as many workers will retire in the near future. Physical labor-intensive tasks in logistics-related operations are physically demanding for the older population, and the lack of succession of skills due to the retirement of middle-aged and elderly workers is also a challenge.

Normalization of long working hours

In manufacturing and logistics settings, long working hours have also become normalized. Due to the chronic shortage of manpower, which remains unresolved, the workload per person tends to increase due to the insufficient manpower, leading to the normalization of long working hours. Additionally, the normalization of long working hours often results in higher employee turnover rates, exacerbating the cycle of labor shortage and long working hours. Improving working hours is crucial to addressing the issue of labor shortage.

Poor industry image (3K)

The manufacturing and logistics industries are crucial professions that support people's lives, yet they are often associated with the negative image of '3K' - 'kitsu-i' (hard), 'kitanai' (dirty), and 'kiken' (dangerous) - due to the prevalence of physical labor. This negative perception discourages many from joining the industry, especially younger individuals, and exacerbates the challenge of recruiting women who may perceive the environment as less accommodating.

To address this issue, it is necessary to create a more favorable working environment by leveraging cutting-edge technologies such as ICT, IoT, and AI, thus dispelling the negative '3K' image.

As a result, the manufacturing and logistics sectors struggle to attract young talent, leading to a negative spiral exacerbated by the aging population, making future talent acquisition increasingly challenging.

The Impact of Labor Shortages in the Manufacturing and Logistics Industries

Let's discuss the impacts of labor shortages in the manufacturing and logistics industries.

The Risk of Decreased Competitiveness

Due to the shortage of young talent, mid-level employees may need to take on the responsibilities of new hires. Even talented individuals find themselves having to assist with on-site tasks, leading to a loss of focus on their primary responsibilities and ultimately resulting in a gradual decline in the company's competitiveness.

Decrease in Production Capacity and Shipping Ability

In particular, small and medium-sized enterprises (SMEs) face severe manpower shortages as they have limited opportunities for regular employment. Even with a healthy order book and smooth business operations, these companies may struggle to maintain production lines and shipping operations adequately due to this labor shortage. The manpower shortage in the manufacturing and logistics industries poses a significant challenge to the competitiveness and sustainability of companies, necessitating a strategic approach to resolving it.

Key Points for Resolving Labor Shortages in Manufacturing and Logistics Industries

Amidst the declining labor force, many companies may focus on three demographic groups - seniors, women, and foreigners - to seek new hiring opportunities. However, to break free from the negative spiral of labor shortage, it is essential to promote the automation of logistics to reduce the burden on workers and eliminate labor-dependent tasks, rather than solely focusing on gathering labor. The main initiatives include the automation of the following two logistics tasks.

Utilizing Robots

By fully automating tasks such as heavy lifting and data matching, which involve significant loads or simple operations, with robots, the overall speed of processes increases, and the burden on employees decreases. With the reduction of workload on employees, overtime work can be corrected, making it easier to secure manpower. Another benefit is that by having robots handle simple tasks, employees can focus on higher-value-added tasks.

Furthermore, in addition to full automation from human to robot, it is also possible to enable 'collaboration' where robots assist in performing advanced tasks conducted by humans. By providing assistance, work efficiency improves, and personalized tasks can be eliminated, thus fostering the active participation of younger generations.

In recent years, Automated Guided Vehicles (AGVs) have been gaining attention as a solution for automating transportation processes. For more details about AGVs, please refer to the following article. If you are experiencing challenges with transportation in production lines or intra-logistics, be sure to check it out.

Utilizing Logistics Management Systems

In intra-logistics, there are four main functions/processes: 'inbound, inventory, outbound, and inventory check,' which are collectively managed by software known as Warehouse Management Systems (WMS).

By automating and streamlining manufacturing and logistics processes through the utilization of robots and logistics systems, tasks that were previously reliant on human skills and experience can be standardized, enabling adaptation to the challenges of an aging population and labor shortages. Additionally, visualizing the workload of employees in each process allows for appropriate staffing and reduces overtime work.

The transformation of logistics models using technologies such as IoT, AI, and logistics systems is referred to as 'Logistics DX.' To address the challenges posed by the 2030 Problem, it is crucial to implement Logistics DX and build logistics sites that are less dependent on human labor.

For more detailed information about WMS, please refer to the following article.

Solving Labor Shortages with Logistics Automation by LOGITO

At Daiichi Jitsugyo, an engineering-oriented machinery trading company, we offer the logistics automation solution LOGITO. Leveraging our extensive knowledge and experience as a comprehensive machinery trading company, we can provide optimal proposals for technical support, workload reduction, and problem-solving at each site.

Furthermore, our ability to support everything from current situation analysis to layout proposals, equipment selection, construction, and after-sales maintenance sets us apart.

If you are interested in resolving labor shortages through logistics automation, please take a look at the following materials.