The Transformation of Work in Manufacturing

As manufacturers move into the digital age of data-driven decisions and actions, it is more important than ever to have a strong, diverse workforce. Yet, despite a rising global population, businesses across the globe are finding it difficult to hire and retain enough workers to support their growth. Three main trends are contributing to the labor shortage – an aging workforce, changing skills requirements, and negative perceptions of manufacturing.

First, retirement-age employees are exiting the workforce at a faster rate than qualified workers are being hired to replace them. The US Census Bureau projects that between 2025 and 2050 people aged 65 and older will reach 1.6 billion globally. Second, to fill the open positions left by retirees, companies are competing for a limited number of workers with the skills necessary to perform jobs in the digital economy. Deloitte predicts that over the next decade, nearly three and a half million manufacturing jobs likely need to be filled and the skills gap is expected to result in 2 million of those jobs going unfilled. Finally, companies are fighting the perception that manufacturing is a declining industry with unprofessional, dead-end jobs, dirty factories and frequent layoffs.

Faced with growing demand and limited supply, executives are leveraging new technology tools and data analytics to maintain a highly productive and effective workforce. Below are five ways data analytics and technology are being used to help manufacturers compete in the digital economy and resolve the widening skills gap.

Attracting and Hiring Millennials

By 2025, millennials will represent about 75 percent of the American workforce (Oncore). This new generation of workers demand a high-tech work environment that mimics their personal lives with state-of-the-art technology such as instant communications, virtual and augmented reality, and open system architectures. Manufacturers willing to make the investment in these types of technology tools are better positioned to attract, hire and retain younger workers. Data analytics also are identifying critical HR trends and patterns. For example, companies can identify the characteristics of a person most likely to succeed and then use the information for hiring and developing top performers.

Providing an Improved Employee Experience

Some manufacturing companies have begun to use technology to transform their training programs into interactive, e-learning experiences. Technology programs can deliver information in ways that are more comfortable to a younger generation such as using 3D graphics for more visual learners or recording sessions for auditory learners. Additionally, new types of communication tools facilitate improved peer-to-peer communication and deliver information when and where it is needed. For example, assemblers can work hands-free by accessing BoMs, engineering drawings, and work instructions visually, while also getting contextual exceptions alerts from remote experts.

Managing More Efficient and Diverse Workforces

Today’s manufacturers require a flexible global workforce that can cost-effectively contract or expand according to changing market dynamics. These workforces often include a combination of internal and external workers, full-time and part-time employees, highly qualified experts and interns. Integrated human capital management systems ensure all workers are compliant with constantly changing regulations, as well as provide decision makers with key data analytics helpful in making real-time staffing adjustments. New technology solutions have also made these diverse workforces more efficient. For example, field service technicians can remotely access content and contextual tools needed to complete jobs quickly, safely and on their first visit. Also, warehouse employees get visual displays of optimized picking sequences and receive real-time updates on items such as stock-outs or packaging details.

Ensuring Worker Safety

Worker safety is always a top concern. Digitalization of safety systems and deployment of wearable devices embedded with sensors has made it easier to keep workers safe through better tracking and faster evacuations. For instance, bionic jackets help companies track the physical location of people, as well as monitor environmental factors such as light, sound and air quality. Technology also provides real-time access to important occupational health information used for prevention management such as permits, safety statistics, incident logs, and inspection information.

Making More Insightful Decisions

With real-time access to data regardless of location or device, cost control and revenue generation considerations become the responsibility of all workers – not just top executives. For instance, workers can assess the profitability potential of a customer’s order when it comes in by using real-time information on raw materials prices, production costs and customer pricing.
These are just a few of the solutions manufacturing companies are using to help address the labor challenges in today’s complex, global business world. Whether it is competing for workers, maintaining a flexible workforce, or giving people tools to make their jobs easier, manufacturers can use technology to help their companies maintain profitability and market leadership in the new digital economy.

Pradeep Amladi is the ‪Vice President and Global Marketing Head of High Tech, Manufacturing, Energy & Resources Industries at SAP. With more than 20 years of experience in high-technology, Amladi is an expert on advanced manufacturing and enterprise resource planning. He has spoken extensively on the topic and written numerous articles that have appeared in Forbes, IndustryWeek and many other national publications. Prior to SAP, Amladi was vice president of marketing at i2 Technologies. He has also held management positions at Epiphany, Chordiant Software and Hewlett-Packard.

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