Addressing the Skilled-Labor Shortage Problem in Manufacturing

May 30, 2017
(and Improving Business Operations)

If you gather a group of manufacturers and ask them what their biggest challenge is today, you’ll likely hear them respond in unison: difficulty filling skilled-labor jobs. 

Finding the right people with the right skills is both a result of a retiring workforce and growth. In a report by Deloitte and the Manufacturing Institute, an estimated 2.7 million jobs are likely to be needed as a result of retirements of the existing workforce, while 700,000 jobs are likely to be created due to natural business growth.1 Couple this with a perception or stigma that manufacturing is outdated, legacy work that is of little interest to a new breed of workers and the skilled-labor shortage has turned into a perfect storm threatening to impede a manufacturer’s ability to deliver on customer demand.

While no single action addresses the entire problem, some manufacturers are thinking differently and in the process, are changing the perception of manufacturing. They’re doing three things: modernizing the systems that run their business, making better use of existing workers, and improving operations.

Adapting to Changes in the Industry 

The business of manufacturing has not only gotten more complex but also more “digital.” Manufacturers have recognized that the old way of doing things isn’t as flexible or adaptable to changes in customer demand and managing the effect that demand has on the supply chain. Legacy systems that were built to handle transactions but not to share information or integrate with others can no longer keep up with the pace of change occurring in manufacturing.

Innovations like wearables, machine sensors, and robotics are constantly advancing, creating a connected manufacturing environment where the common currency is data. Manufacturers see the opportunity to tap into data generated during production, by machines, and throughout the supply chain. Those who want to get ahead of the digital tidal wave have already moved business and operational systems to the cloud, which centralizes data and spurs innovation. The cloud scales to both grow as that data grows and collect that data in a single real-time repository that can be used to make rapid decisions—and adapt as quickly as needed.

Attracting New Talent

Recent GE commercials highlight the company’s focus on digital services. Some would say these are aimed at attracting young software engineers by shattering the perception that GE is simply an industrial-focused company. 

In a 2016 State of Manufacturing Technology Report based on a survey of Plex customers, results reveal that data analysis skills are just as important to manufacturers as engineering skills in the next generation of employees. Young, tech-savvy workers are interested in fields that involve information management, analytics, and innovation. Embracing modern manufacturing technology conveys a more forward-thinking, advanced technology environment more likely to attract a new breed of much-needed talent—essentially changing perceptions about the industry.

Unlocking People Potential

Employees who spend most of their time ensuring the uptime of systems, planning upgrades, and managing integrations, aren’t putting value back into the business. These people could be working on solutions to problems that directly impact the bottom line, like reducing scrap or meeting customer specification targets.

Cloud computing frees up valuable technical resource time to allow people to focus on data analysis, adopting new innovations, and making process improvements. A recent survey by Mint Jutras of Plex customers found that 93 percent were able to pivot technical resources focused on managing legacy ERP software to manage higher-value projects.

The skills gap is a complicated challenge and there is no silver bullet, but manufacturers embracing cloud technology have realized unexpected benefits in this area. Modern manufacturers drive more business by focusing their best and brightest on the toughest challenges, while paving the way for the next generation to make their mark on the industry.

For more insights download the: 2016 State of Manufacturing Technology Report.

1. The Skills Gap in U.S. Manufacturing and Beyond. Deloitte and Manufacturing Institute. 2015.

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