The Cold Rolling Industry: Demographic Changes and Further Challenges—Impacts on the Workforce and Current Status of the KaWaGi Project

Abstract

The focus of this chapter is on how digitisation and Industry 4.0 technologies are changing work forms and loads, as well as competitive strategies within the cold rolling industry. The chapter will present the effects of digitisation coupled with demographic changes within the workforce by presenting the KaWaGi project conducted in association with the German Association of Cold Rolling Mills. The project is intended to secure employability and the innovative potential of the workforce against the background of the current challenges the branch is facing by personnel development measures. In this chapter, some exemplary project results are described from the analyses of the age structure and skills requirements as well as from stress assessment.

1 Introduction: The Cold Rolling Industry in Germany and Europe

The cold rolling industry is a steel manufacturing industry and it has developed into an innovative and modern supplier industry over the past decades. It is primarily characterised by small and medium-sized companies (SMEs) especially in Germany (European Commission 2020), but also in Europe and they are mainly family-owned. The Fachvereinigung Kaltwalzwerke e.V., the German Cold Rolled Narrow Steel Strip Association, and the CIELFFA, the European Federation of the National Associations of Cold Rolled Narrow Steel Strip Producers and Companies, comprises SMEs as three quarters of its membership.¹ The cold rolling industry is of enormous importance for the automotive industry, for mechanical engineering and for general metal processing. The automotive and automotive supply industry alone accounts for more than half of the shipping volume of the member plants of the Fachvereinigung Kaltwalzwerke e.V., followed by general metal processing with a quarter of the total demand for cold-rolled strip steel. About 15% of the production volume flows into mechanical engineering and the electrical industry.²

Cold strip or cold-rolled steel strip is a flat product that has undergone a cross-section reduction of at least 25% by cold rolling and is wound up into a roll (coil). It has a significantly higher stability than untreated steel and enables the production of perfectly fitting precision parts. As a semi-finished product, highly specialised cold rolled strip is an important starting product for a wide range of processing options in the above-mentioned customer sectors. It is used in cars, for example, in seat rails, windshield wipers and as parts in the engine and transmission. Cold strip is also used in construction and furniture fittings, as hinges and as running rails in the construction and furniture industry, to name just a few further possible applications.

A look at the delivery volume of the member plants of the Fachvereinigung Kaltwalzwerke e.V. and the CIELFFA shows healthy growth over the past years. The shipment volume recovered in the years following the steel crisis in 2009, which meant a dramatic drop in demand for the entire steel industry and amounted to around 2.13 million tons for all CIELFFA members in the year 2018. Only the year of crisis in the automotive industry in 2019 and the economic slump in 2020 due to the pandemic led to a drop in the shipment volume for cold rolling mills in 2020 by around 13.5% in 2020 compared to the previous year.³ With their global orientation and international competitiveness, the cold rolling industry generates a stable export volume, which developed for German mills in the past years with an almost constant share of around 30 to 35% in proportion to the total shipment.⁴

In the following, we first outline the cold rolling industry with its special position in the value chain as well as the challenges it is facing today and in future. We hereby describe the effects of digitisation and demographic changes in cold rolling mills. Secondly, we present the project KaWaGi which has been launched as a response to these challenges. Here we describe some exemplary project results of the age structure and stress analyses, followed by an overview and outlook of possible personnel development projects.

2 Challenges in a Modern Supplying Industry

It is to mention that the cold rolling industry as an independent supply industry has a sandwich position in the market. Especially the automotive sector has very powerful customers with its OEMs (Original Equipment Manufacturer) on the one hand. On the other hand, cold rolling companies buy their raw material mostly from large steel producers. For the predominantly independent and medium-sized companies in the cold rolling industry, this position is often associated with difficulties in asserting their own interests, whether in price negotiations or with customer requirements. In addition to this position and the resulting difficulties the cold rolling industry is currently confronted with two problems or challenges⁵:

• The demographic change in the workforce means that the competitiveness of companies must be secured with older employees. Important fields of action are the age-appropriate design of work processes in order to maintain employability and competitiveness.

• Technological development such as Industry 4.0 leads to changes in forms of work and requires new competitive strategies and new customer–supplier relationships. This makes targeted qualification measures necessary, for example.

The challenge for companies is to use the development potential of digitisation and to implement a health-promoting work design. The aim from the cold rolling perspective is to promote the ability of employees to work and to ensure the competitiveness of the cold rolling industry in the face of demographic change.

The cold rolling industry as a supplying industry depends above all on innovative product development and production without friction losses in order to survive on the market. New developments and trends on the market require constant adaptation of the products to market requirements. Here the transformation to electric power trains in the automotive sector for example forces cold rolling mills to adapt products and to develop new applications.

3 The Status Quo in Cold Rolling Mills and the Need for Action

Cold-rolling companies show highly demanding working conditions. Especially in production, working conditions are extremely demanding, physically and cognitively, due to continuous shift systems and the complexity of the production processes. A large part of the employees work in alternating and night shifts as well as in weekend work. At the same time, the industry is characterised by a high proportion of older employees.⁶ The demographic change is also and above all evident in the steel industry and steel processing industry (Hans-Böckler-Stiftung 2007).⁷ High-quality and innovative products as well as the smooth running of the underlying processes and services are in turn dependent on qualified employees. Technological developments such as ongoing digitisation processes are leading to a change in forms of work and workloads—causing an increase in the requirements and qualifications of employees.⁸

Against the background of demographic change, the change in work design and the necessary adjustment and expansion of the qualification level of the workforce is under pressure from several points of view⁹:

• The proportion of company top performers is increasingly focused on a growing proportion of older employees in cold rolling mills.

• The participation rate of aging employees in inhouse-company training tends to fall from the fifth decade of life.

• The health burdens in continuous shift systems affect, above all, an aging workforce.

• The comparatively low attractiveness of the industry (the steel industry in general and the cold rolling industry in particular) for young professionals exacerbates the personnel problems in the industry. The challenge of recruiting enough qualified junior staff is made even more acute by the fact that the cold rolling industry is not well known and that smaller cold rolling companies in particular lack professional recruitment strategies.

The challenge for the cold rolling industry is above all to secure the employability and the innovative potential of their aging workforces by personnel development measures which should also focus on semi-skilled and unskilled workers as well as on those with disabilities. In this way, the industrial jobs in this sector are to be preserved in the long term and the locations of the cold rolling mills are to be strengthened as industrial locations. In order to master these challenges the project KaWaGi which is described in the following has been launched. It uses work-scientific knowledge and instruments that have been tried and tested in practice.

4 Project KaWaGi in Cold Rolling Mills

The project KaWaGi¹⁰ is carried out in cooperation with the Vocational Research and Consulting Institute BIT e.V., Germany. The project duration was from April 2019 to September 2022. It is funded by the German Federal Ministry of Labour and Social Affairs and the European Social Fund. Beside several foundries, five German cold rolling mills have been participating in the project. In these cold rolling mills, the age structure, the need for qualifications and age-sensitive burdens are to be surveyed and evaluated. The aim is to successfully counter the demographic and technological change in the cold rolling and foundry industry. The following instruments form the basis of the project.¹¹

• (1) An age structure analysis shows how the age of the workforce is developing. It also becomes clear which key personnel are leaving, when it is leaving and which personnel policy measures are necessary in order to keep the practical knowledge in the company. In connection with the qualification requirement analysis, it can be identified whether and which core competencies are lost when older employees are leaving the company. Moreover, the analysis can show whether an unforeseen failure of individuals endangers important production and service processes.

• (2) The skill requirements analysis is used to determine the current status of the skills of the employees on the one hand. On the other hand, the present qualification requirements and future developments are described and evaluated. Above all, this analysis should also specify the requirements caused by the advancing digitisation. In addition to the need for qualification, it also becomes clear which employee potential is not being used. A workload log is intended to provide information on whether and, if so, which job change could make sense.

• (3) A stress analysis provides information on physical and mental stress which can have health-endangering effects for the workforce.

The project includes the internal target groups, who bring in their experience and their qualification wishes and concerns, such as employees, executives, human resources managers, specialists in occupational health and safety and members of the works council. There are various fields of action and measures which are important, like health- and learning-promoting as well as age-appropriate and participation-oriented work design with appropriate qualification measures. Furthermore, the project intends to establish and promote an appreciative leadership culture and leadership behaviour on the management level. On the worker’s level, an increase in operational flexibility and the ability to change jobs should be achieved by developing new key qualifications and competence resources. Hereby the development of aging and health competence on all levels is relevant too. Therefore, the project also focuses on measures of occupational health promotion. Finally, it must be checked and ensured that measures are sustainable.¹²

5 Exemplary Age Structures in Cold Rolling Mills

Project results of the age structure analyses excellently show the progressing demographic change in cold rolling mills. In the project the age structures of three cold rolling mills have been evaluated, one small company with 30 employees and two medium-sized companies with 61 and 270 employees. The average age in the two examined smaller companies is 48.2 and 49.9 years. The share of those over 50 is 59 or 57% and around one-third of the staff is going to retire in the next five to ten years. This presents a high risk of loss of experience and knowledge and a need for action.

The age structure in the larger cold rolling mill with 270 employees is not as strained as in the other two companies. The share of employees older than 50 is 35% and the average age is 44.3 years.¹³

The following example of one exemplary small cold rolling mill makes the problem of the aging workforce very clear. It shows the age distribution in three selected work shifts in this company. The work area of the company shown below works from Monday to Friday in 15 shifts. The following chart shows the overall age distribution of the exemplary cold rolling company. It has 30 employees, 57% of whom are over 50 years old. The average age amounts to 49.9 years (BIT E.v. 2021a) (Fig. 1).¹⁴

Fig. 1

Total age distribution of all employees in per cent of an exemplary small cold rolling mill

The following charts show the detailed age distribution in three work shifts (Figs. 2, 3, 4, and 5).

Fig. 2

Age distribution in shift 1

Fig. 3

Age distribution in shift 2

Fig. 4

Age distribution in shift 3

Fig. 5

Age distribution in three selected work shifts of small cold rolling mill

The above-mentioned figures of a small cold rolling mill show a relatively high share of employees older than 50 years. In shift 3 the proportion even amounts to 71%. Due to the aging workforce and the retirement of older people in the near future such a company is working with an extremely tight staffing level. The problem may be compounded as it becomes increasingly difficult to recruit suitable workers. The age structure analysis is a very important instrument and informing fields of action for the personnel planning and development in the company, especially against the background of the demographic change.¹⁵ Cold rolling mills get a comprehensive overview of the composition of their workforce in terms of age. The analysis enables indications of employment risks, possibly also in connection with working days lost due to illness.

6 Relatively High Stress Levels for Older Employees

If employees do the same job for many years, the result is age- and work-related wear and tear. In some examined companies this aspect leads to double-digit sick leave rates, especially in the case of age-centric workforces and due to long-term sickness (BIT E.v. 2021a).¹⁶ In addition, stressors from the working environment (e.g. noise, heat, high temperatures in summer, insufficient lighting, smoke and dust) have a demanding effect. For this reason, companies participating in the KaWaGi project are supported within the project in setting up or optimising an inhouse occupational rehabilitation management¹⁷ or if necessary, in developing and implementing sustainable integration measures for employees who have been ill for longer than 6 weeks. The aim is to offer support at an early stage to people who are already ill and to reintegrate them efficiently into working processes. This is an important contribution to remain competitive also with an older getting workforce.

Negative aspects of the management culture such as insufficient employee participation in changes at their own workplace, insufficient feedback on the quality of the work (“nothing said is praise enough”) or frequent time pressure lead to a feeling of lack of appreciation. Here, too, the KaWaGi project comes into play by providing targeted training for managers and by drawing attention to any leadership deficits. Moreover, tight staffing levels combined with high levels of sick leave increase workload and time pressure. As a result, there is less time for induction, training and qualification of the employees. This in turn has an impact on the quality of the work results and can lead to lower availability of machines and systems (through more time required for troubleshooting e.g.).

7 Holistic Risk and Stress Assessment in Cold Rolling Mill

With the holistic risk and stress assessment, deficits in the working processes that lead to high physical or mental stress on employees and managers become visible. The physical stresses are associated with the individual activities in a cold rolling mill and they are categorised in three risk classes in a workplace register (see figure below). The analysis has been carried out for an exemplary cold rolling mill (BIT E.v. 2021a).¹⁸

The following risk classes with respective colours and abbreviations are used in the model.

risk class 1; no overstress/overstress is unlikely

risk class 2; possible/probable overstress

risk class 3; overstress is very likely

X no stress in this activity

Assignment to one of the risk classes follows the use of specific analysis tools that are appropriate for the stress under review. Different physical and mental stress categories require different instruments with often unique scales that are used and afterwards translated into the risk classes.

For categories like for example lifting, holding, carrying and moving of loads the amount of the load and the duration of the handling of the load are evaluated. This is done by observations and measurements that lead to an assessment of the stress and the corresponding risk class while other categories like different mental stressors additionally need interviews or questionnaires to capture the amount of stress associated with a work activity and translate the results into a risk class. These results are afterwards recorded in a holistic workplace register.

The following table is an exemplary part of a workplace register where only the stress levels for different physical activities at different facilities are shown. The complete register would show all the physical and mental stressors recorded for every work activity (Fig. 6).

Fig. 6

Workplace register in an exemplary cold rolling mill

The figure shows that all five work activities offer enough opportunities for load changes within the shift and a good sequencing of load types. But there are still some high risks associated with operating the furnace or the shear. A high risk from locomotion by walking, climbing and crawling can result from missing opportunities to sit even for a short time during a shift. Operating the shear is associated with high stress due to the manual handling of loads.

8 Results of the Analysis of the Qualification Matrix and from Company Feedback

By evaluating the already existing qualification matrix and by further feedback from the exemplary company, it becomes clear that many activities are semi-skilled activities. Only limited formal qualification is needed for such activities. Employees are often trained on the job while benefiting from the experience collected while executing these activities. This constellation leads to considerable differences between novices and long-term employees in the efficiency and efficacy of execution. Many, especially long-term employees have a wealth of experience due to their many years of work at their workplace. However, the flexibility of these employees, measured by the number of different work activities they can perform, is limited. There are also health-related restrictions of some employees. Overall, the activities are not very conducive to learning and there are hardly any opportunities for development.

In summary, the situation can be described as follows (BIT E.v. 2021a)¹⁹:

• There is a high average age among employees, especially at the belt furnaces.

• There are some employees with reduced performance and a high level of sick leave.

• There are high individual workloads on several machines and a high physical strain on employees.

• There is further stress caused by the working environment (heat in summer, drafts, dust).

• In general, the work involves little room for manoeuvre and hardly any opportunities for development.

• There is psychological stress (e.g. caused by the lack of participation, the partly low appreciation of work, one-sided feedback on the quality of work).

• Frustration, demotivation and partial resignation of the employees are consequently noticeable.

9 Personnel Development Projects Can Help to Master the Demands of the Future

Working in a three-shift system with high physical and work-related psychological stress and few development opportunities make these jobs less attractive, also for young professionals. However, the companies involved in the project urgently need these younger workers. Regular job rotation can be an approach to reduce one-sided burdens and enabling development careers. In addition, training concepts are developed in the framework of the project that enable new employees to be trained quickly. Personnel development concepts should, initially as a pilot project, reduce one-sided physical strain and lead to flexible use of employees in different activities. It is also being examined to what extent a rotation to related work areas would open up further development opportunities for employees and improve the attractiveness for young specialists and managers. Qualification matrices which are linked to the age structures and tailored to the respective needs of the companies have been developed and adapted within the project. In order to get employees more involved, to appreciate their experience and to promote cooperation on a level playing field with managers, moderated working groups serve to jointly develop and test tailor-made measures to reduce physical stress. Parallel to these activities already described, managers are supported within the project in reflecting on management deficits perceived by employees and in changing their management behaviour (BIT E.v. 2021a).²⁰

Overall, the participating cold rolling mills should learn to master the described requirements themselves in the sense of ‘helping people to help themselves’. Internal actors get a holistic view of the interaction of stress and dangers, qualifications and age structures. They gain experience of how stress factors from the work system can be determined and assessed together with employees and managers through questionnaires, interviews and observations. In short: the participating plants are beginning to strengthen their own organisational resilience. The Vocational Research and Consulting Institute BIT e.V. accompanies the plants in this project and process. It qualifies, advises and coaches project employees, managers on different managing levels, the workers’ council, specialists for occupational safety, Human Resources managers in the participating cold rolling mills by conducting training courses and workshops on all these aspects (BIT e.V. 2021b).²¹

The described KaWaGi project is a good example how the cold rolling industry is meeting demographic change and the challenges of increasingly demanding working conditions in cold rolling mills. In order to be able to continue to survive in international competition, small and medium-sized companies in particular have to make optimum use of human resources and undertake personnel development measures. Not only does the company benefit from this, but also every single employee, as unused skills and potential are recognised and employee satisfaction is promoted.