It feels as though the world has gone through some pretty significant changes in the past six months. We’ve seen the UK vote to leave the European Union and America welcome Donald Trump as its 45th president-elect. Much of the political rhetoric has centered around securing jobs for the everyday worker: in fact, one of President-elect Trump’s vote-grabbing pledges was that he would bring manufacturing back to Pennsylvania, New England and Ohio.
Looking beyond the initial shockwaves that have been felt across the globe as a result of these political shakeups, it’s important to understand the shifts that are affecting the way the manufacturing world is now operating. There has been a lot of fearmongering about the future of workers’ jobs and the role technology plays in this; the fear of being replaced by a robot has existed for decades and is one that the media loves to play on.
The reality, however, is more subtle; jobs in manufacturing will continue to exist, but the nature of work in manufacturing is changing. To compete in this new world, companies need to know what new jobs are emerging and which skills will be required for the jobs of the future.
Technology Has Changed The Manufacturing Game
Automated factories that integrate all aspects of manufacturing operations are not new. However, with the digital economy revolutionizing every aspect of life and business, factories of the future will be digitally infused, providing tightly interconnected information and production flows.
What is new is the degree of intelligence brought in by brand new collaborative robotics and smart machines that collaborate with each other and make the material flow visible in real-time through intelligent big data analytics. The Internet of Things is also changing manufacturing, as it is free from boundaries and can extend the traditional automation model outside the four walls of a factory, integrating the entire supply chain, and enabling virtual tracking of capital assets, processes and resources.
This kind of transformation means that traditional approaches to manufacturing are no longer enough to drive the necessary productivity and grow profits. Therefore, the success of the industry no longer relies upon the jobs that people are used to – and that they will be looking for.
New Technology Means New Skills
The US Department of Labor reported that 43,600 jobs were added to the warehouse and storage sector over the past 12 months, but these jobs may not be straightforward manual labour for the unskilled. More than three-quarters of respondents to SCM World’s “Future of Manufacturing Survey 2014” believe that people will be at the center of the automated factory of the future. It is still only humans who can provide the degree of flexibility and decision-making capabilities required to deal with the ever-increasing demands from customers.
In the world of digital factories and sophisticated technology, employers require a brand new set of skills from its supply chain teams. There is a clear connection between the development of new automation technologies and the skills gap. According to our own research, 82 percent of practitioners that we surveyed believe that continued automation will require plant-floor workers to learn and adapt to new technologies must faster than they do so today.
It’s becoming increasingly important for employees to not only be familiar and keep up with rapidly developing digital technologies, but also show leadership and management skills and demonstrate they can work across different functions such as product engineering, supply chain and marketing.
A New Challenge
It will take time for the labor market to adjust to these changes. When it comes to resourcing, our survey also identified that a large number of supply chain executives are concerned about the constraints of the manufacturing labour marketplace. This is not a matter of raw labour input, rather the lack of skilled problem solvers. The supply chain sector needs to start training people to meet this impending shortage.
For example, the VP of supply chain at a large beverage company who participated in the survey explained: "As our business grows globally, we seem to be shrinking in our personnel. As such, labor is becoming both a scarcity (in terms of qualified and skilled people in the right places) and an abundance (lots of unskilled labor without the necessary training or out of position for where the work is). This creates a dilemma for supply chain managers. We can do more with less, but as supply of the qualified people shrinks it leads to a diminishing of the productivity as companies dip into the less skilled labor pool."
The new world of manufacturing is changing, and it’s true that automation is removing the need for many unskilled, manual jobs. But companies need to focus on the new employment opportunities that are opening up and to start preparing their workforce to be ready for them.
It’s not a question of bringing back old manufacturing jobs – let’s leave robots doing the dull, risky and repetitive jobs; it’s about taking advantage of this new wave of digitization to bringing a new, smarter manufacturing back home.
Pierfrancesco leads the research practice for end-to-end supply chain, design for profitability, and product lifecycle management. He provides insights, consulting and advisory support to leading global manufacturers and specialty IT vendors into the key challenges and trends affecting manufacturing industries including automotive, machinery, aerospace, fashion & apparel, CPG and hi-tech. Pierfrancesco has more than 20 years of industry experience in manufacturing operations and supply chain strategy research, consulting and IT solutions, with a strong focus on the business value of technology in manufacturing. He is based in Milan, Italy.