Forward-thinking companies understand that manufacturing needs to constantly evolve if they want to enjoy the benefits of digital transformation.
This article looks at the challenges in adopting smart factory processes. It considers the evolving roles on the factory floor and seeks to offer best practices to factory owners wishing to transition to digital.
Changing skillsets in the factory environment
Like most industries, manufacturing felt the damaging effects of the pandemic. The sharp increase in unemployment might have given some manufacturers a false sense of security when hoping to capitalize on the influx of people looking for work.
In reality, the skills shortages experienced by factories today have been created by a perfect storm of baby-boomer retirements, increasingly technical and demanding roles, and misperceptions about manufacturing roles amongst the emerging workforce.
An opinion article published by Investment Monitor highlights how a “snobbery about manufacturing jobs is creating a skills crisis in the UK.” The report emphasizes that “according to experts across the UK (and the US), the biggest issue facing the industry isn’t Brexit or even Covid-19, although both pose significant threats – it is skills.”
The aging workforce, nearing retirement, and a lack of appetite from the young to consider manufacturing is a real problem. The old-fashioned belief that manufacturing roles are carried out by unskilled workers in grimy factories is rife – this leaves manufacturers with the difficult job of convincing the younger and future workforce that modern manufacturing plants are sophisticated, pristine environments crying out for highly skilled, well-educated, and tech-savvy staff.
The reluctance among younger workers, and often, their parents who actively discourage a future in manufacturing, is not the only issue. In addition, the speed at which Industry 4.0 is sweeping through factories is exacerbating the talent shortage.
The nature of manufacturing is changing as more and more embrace Smart Factory principles – the benefits of which include increased productivity, expanded markets, and better competitive edge. The World Bankʼs World Development Report (WDR) 2019 considers, on balance, that any concerns about resulting technological unemployment only apply where companies and governments do not embrace the opportunities that technology offers nor invest in their human capital.
To be truly effective, implementing digital transformation needs to encompass new technologies (AI, advanced robotics, automation, and analytics), systems (design software and manufacturing execution software), processes, and finally, talent.
Less labor-intensive work and more human-machine interaction demand a higher-skilled workforce that can implement more significant levels of judgment. Similarly, the interconnected nature of digital infrastructure emphasizes analytical and advanced communication skills. As a result, new roles of digital twin engineers, predictive supply network analysts, and robot programmers, managers and maintainers will become commonplace.
Embracing digital transformation
Establishing a clear road map and defining the opportunities are essential for manufacturers looking to future-proof their businesses and stay ahead of the curve. Understanding the required IT and the resources accompanying them is a vital first step.
Unlocking value from data and analytics can be achieved by sourcing connected software and operational procedures that collaborate to improve efficiency, productivity, and profitability. These changes can only reach their full potential if a core focus is placed on building the skills needed to break down silos and drive internal collaboration.
The importance of people
Preparing a workforce for the significant changes in working practices by Industry 4.0 is no mean feat.
Involving the workforce from the onset when planning for technological changes is highly recommended. Educating, informing, and inspiring will instill a sense of ownership and involvement in new approaches to operations.
It’s worth noting, however, that many manufacturers are faced with the headache of convincing the existing workforce of the importance of embracing digital transformation. Many manufacturers also have a worrying lack of capability and capacity before they even start on their journey.
In a blog post by McKinsey & Company in 2018, entitled: “The Human Factor—Building Ops 4.0 capabilities”, the author, Markus Hammer, explains: “Companies may struggle to obtain staff with the right skills on the open market since people with right combinations of capabilities will be scarce. And they may also struggle to acquire appropriate training from 3rd party providers, as a market for appropriate training programs has yet to develop.”
The European Commission estimates that the EU manufacturing sector accounts for 33 million jobs and 60% productivity growth. Furthermore, digitizing products and services could add more than EUR 110 billion of annual revenue to the European economy in the next five years.
Ensuring that the workforce of today and tomorrow are equipped to take advantage of these opportunities has never been more critical. Deloitte and the Manufacturing Institute’s 2018 study The Future of Manufacturing: The Jobs Are Here, But Where Are The People? reveals that the skills gap may leave an estimated 2.4 million positions unfilled between 2018 and 2028, with a potential economic impact of $2.5 trillion. The study also identifies that posts relating to digital talent, skilled production, and operational management maybe three times as difficult to fill in the next three years.
Financial and opportunity cost
As Industry 4.0 matures, the availability of staff with appropriate and established skills will become a challenge. As mentioned above, the scarcity of 3rd party training organizations will pose an initial threat leaving companies with no other option than to build in-house training programs.
Digital forward-thinking will require direct investment in digital technologies and the recruitment and training of staff, which costs time and money.
Investment is needed to ensure the proper infrastructure is in place to facilitate the training of existing staff and recruits. Furthermore, staff spending time away from the day-to-day job to undertake training can seem prohibitive.
Consider, though, that training and upskilling staff is more likely to attract and retain workforce talent. This will ensure the capability to forge ahead with digital transformation plans. Ultimately this will safeguard product quality, enhance production, and increase profitability.
A further post from McKinsey & Company states: “Offering staff the opportunity to develop their own skills doesn’t just fill critical capability gaps, it is also a powerful way of attracting and retaining talent. In one McKinsey survey, 68% of workers cited “training and development” as the workplace policy that mattered most to them.”
Factory owners seeking to up-skill their teams are recommended to follow a simple four-stage process:
Once digital transformation objectives align with the company’s overall business objectives, a company can assess where investment would be most beneficial. This analysis helps to identify the infrastructure and equipment required, as well as the associated training.
- Numbers – how many need to be trained?
- Scope – what should be included in the training?
- Developing a curriculum around the technology itself (data analytics, AI) or personal skills (communication, project management) rather than around particular roles is a better fit for the Smart Factory approach, given that roles are increasingly expected to be multi-functional.
- Timing – when presents the best opportunity in the schedule to deploy staff to training rather than production?
- Funding – has the Board signed off on a long-term budget for the project? Have other avenues of financing been investigated? National governments, including the US, China, and the European Commission, all recognize the vital role of training in job creation and retention.
- Implementation strategy – whatʼs the best method or combination of techniques to achieve deployment? E-learning is a popular choice for companies with factories in many different locations; it is more flexible and can be delivered in a multi-language format. Alternative routes to up-skilling include traineeships and apprenticeships.
Strong project management is required to coordinate a pilot group of trainees and collaborate with training providers and partners, such as academics, who may input into curriculum development.
Monitoring the progress of the pilot group, in particular, allows for modification before full-scale implementation.
If the training is implemented through an e-learning platform, long-term monitoring can identify gaps in skills and knowledge with particular individuals.
Ongoing buy-in can be achieved by keeping all staff in the organization regularly updated on the training progress. In addition, selecting CPD-accredited training and contributing to career progression is of added appeal to staff.
Financial and opportunity cost
Technology is undoubtedly changing the face of the factory environment. However, the complexities of implementing this revolution should not be underestimated. Both time and financial commitment are needed.
Efforts must be made across all channels to change the many misperceptions of manufacturing roles. Employers and governments must collectively invest in and promote manufacturing as a viable and attractive career route. Businesses should embrace the concept of training and look at developing in-house facilities or partner with 3rd party providers to ensure their workforces are ready for the digital era.
Companies investing in such endeavors will find they retain staff who feel valued and included and attract quality applicants who will see a future within the business.
When executed well, digital transformation brings an excellent opportunity to thrive – at least for those companies that recognize the need for a holistic approach and recognize that their social capital is ultimately the catalyst for growth.
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