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It’s a problem plaguing companies across most, if not all, industries: the loss of institutional knowledge when a seasoned vet retires. The person you’ve had on the job for decades gets their gold watch, has a retirement party and walks out of your door for the last time… and takes everything they’ve learned on the job with them. That knowledge is gold to companies, and the loss of it can be devastating. According to the Association of Equipment Manufacturers, the lack of knowledge transfer when an experienced worker retires can cost individual companies $47 million per year “due to time wasted, missed opportunities, frustration and delayed projects.”
Manufacturing is especially hard hit by this, because its workforce is aging and younger people aren’t coming in to fill in those ranks. IndustryWeek reports that 54% of U.S. manufacturers are finding it difficult to attract skilled workers to get the job done. That’s up from 38% before the pandemic. But, it’s not just a manufacturing issue. By 2030, one in five Americans will be 65 or older. That’s a lot of great employees looking at retirement.
All of that said, the loss of institutional knowledge isn’t just an age issue. It’s also a generational turnover rate issue. Compared to Boomers, younger workers are on the job for a nanosecond before moving on. The average millennial tenure on the job is 2.9 years. For Gen Z, it’s even less: 2.3 years. The “Great Resignation” following the pandemic didn’t help matters, when people who could leave the workforce, did. They still are. In February 2023, 4 million people left their jobs. The one-two punch of older workers retiring and high turnover rate among younger workers has created a knowledge gap crisis.
The solution? Companies need to have rock-solid foundational training that covers key processes in their operations, written on stone tablets if necessary. It requires a shift in a company’s learning curve, and many simply don’t know where to start. That’s where USC comes in.
How USC helps companies shift the learning curve
Those are the stats and facts about the loss of institutional knowledge. We’ve seen it play out on the shop floor in many of the companies we partner with. Companies that didn’t have simple, well-documented processes lost capability, capacity and quality as their experienced workforce left. It resulted in companies playing catch-up in terms of time, money and employee turnover.
This doesn’t just affect the shop floor. Junior and mid-level managers lost mentors and leaders who might have been there to show them the ropes. We’ve seen frustrated, disengaged, underdeveloped employees leave companies as quickly as they’re hired.
It has resulted in USC developing a closed loop Training Management process that documents and maintains standardized operator work instructions, quickly ramps and levels employee knowledge, encourages employee engagement, and promotes leadership development.
The objectives? Here’s what we’re looking to accomplish:
- Document operator level processes and standard work using a closed loop system that facilitates change management and training.
- Implement a training management system to keep track of who is and who is not trained.
- Retain employees through leadership engagement and demonstrating your investment in their performance and development.
Deliverables include all of the above, along with a detailed timeline for standard operating procedures development and training.
Our approach is designed to accelerate and deliver sustainable change while engaging your people and bringing focus, clarity and transparency to organizational effectiveness.
It includes a Rapid Assessment Analytics Phase and an Implementation Phase. Here’s how it works:
Learn and Collaborate
With leadership, we explore key issues and opportunities in order to articulate the vision of the project.
In this stage, we find the gaps and align with leadership on goals.
With key players, we develop a roadmap and a detailed execution plan. We determine the changes we need to implement and do triage to knock out quick wins to move the project along.
Execute and Sustain
This is where the rubber meets the road. We mobilize stakeholders and implement the solution. It requires ongoing training and coaching, weekly reviews, and a study of ROI and benefits.
As with every project we undertake, our training management approach does NOT include us swooping in and making pronouncements of how things should be. Instead, we engage with your people to create a blueprint that’s unique to your company.
Training Management Project Approach
We aim to drive significant value on two fronts, the “just do it” phase to drive immediate value, and the “change the game” phase to drive sustainable outcomes and long-term value. It includes
- Employee engagement: If people don’t buy into the process, it’s never going to stick.
- Leadership engagement: Involvement with HR, Ops and Training managers is critical.
- Leadership training: We’re not going to be onsite forever. Leaders need to become trainers for this to sustain. We empower people but provide ongoing support.
Yes, a lot of this can sound like “consultant-speak.” What it boils down to, in plain English, is keeping your operations humming along on all cylinders even if every experienced employee on your line suddenly walks out of the door. It’s about identifying your core processes and procedures — what needs to happen to keep the place running. Documenting those procedures, and then creating and providing solid training to employees and higher ups. Sometimes that can involve getting to the heart of what IS NOT in any training manual, those invaluable nuggets of institutional knowledge your people have developed over years on the job.
To learn more about how you can shift your learning curve to retain your employees, give us a call today.
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Knowledge is power, right? The problem? Most working professionals learn the majority of what they will ever know about their chosen profession between the ages of 18-22. They’re kids still, at that age, not even legally allowed to rent a car.
Sure, they’ll learn more on the job. Arguably, they’ll learn everything that really matters at work. But those pedagogical skills. The theory and tech that goes into professional life — that’s typically learned in the more formal classroom setting.
Without upskilling, your staff can wind up in professional limbo. Fortunately, there are many ways to continue developing professionally, even after school is out.
In this article, we take a look at how upskilling your employees can help create a stronger organization.
What is Upskilling?
As the name suggests, upskilling is simply the process of teaching your staff new skills. They learn more about how things work around your organization and perhaps gain the capacity to fulfill other responsibilities somewhere along the line. Kind of like a professional cross-fit program.
Instead of an inordinate amount of leg days, you have team members learning about new technologies or embracing business concepts that might otherwise be outside their job description.
Usually, upskilling is framed as being optional — professional development opportunities that, while not compulsory, may improve the employee’s overall standing within the organization somewhere down the line.
Not everyone will be interested in upskilling, but those who are will learn valuable skills.
Identifying the Go-getters
One of the most obvious benefits of upskilling your employees is that it helps to identify the go-getters. With this, you find out quickly who is interested in growing professionally, and who is more or less coasting on the job. When it comes time to decide who winds up taking on leadership roles, your upskilled staff will often be a great first place to look.
Upskilled professionals may also be better equipped to fill gaps within your organization. This is a problem that business leaders all over the world are still dealing with. They have jobs to fill, but they can’t quite find the people willing or qualified to take them on.
You definitely don’t want to rely on your best employees to pick up all the slack, but you can use them here and there to handle additional responsibilities when the moment requires it. Just make sure you reward them accordingly. Short-staffed businesses often experience very high levels of turnover because the work becomes more stressful for the people who remain.
You certainly don’t want to drive away you’re A-team, so call in the favors sparingly and make sure that your incentives are on point.
Avoid Efficiency Lags
As staff members age they inevitably fall out of touch with the most modern business practices. How could they not? Things change constantly, both in terms of what is considered best practices, and based on things like what technology is being used now.
If you’re twenty years out of college, you might not have your finger on the pulse of the latest industry trends. Upskilling is a great way to stay refreshed on what is going on in your chosen profession.
A Downside to Upskilling?
There are downsides and risks associated with upskilling your employees. Perhaps the most straightforward of these is that it takes time, and, by extension, money to teach people new things. Depending on your current resources, that might not be in the cards.
There’s also just the risk of alienating your staff. People work hard. They don’t really like being asked to work harder. You can edge around that particular issue by making professional development optional, but even then you run a bit of a risk. Yeah, you don’t have to do it but…you have to do it, right?
Read the room. There are times to upskill, and times to leave things be. As a decision-maker, it’s your responsibility to take an analytic view of the situation and go from there.
It’s also important to keep in mind that upskilling, or any other form of professional development is not a one-time thing. Technology will continue to change. Strategies will change along with it, and it will be time to refresh your staff’s knowledge all over again.
Learning and progress are important elements of growth, but remember that slow and steady can win the race here. You want to encourage your staff and help them grow. Not bombard them with new responsibilities.
*This article is written by Andrew Deen. Andrew has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He implements lean methodology and is currently writing a book about scaling up business. You can follow him on Twitter @AndrewDeen14.
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What’s keeping manufacturing CEOs up at night? From supply chain disruptions to a disengaged workforce and growing skills gap, there are challenges aplenty plaguing leadership teams. Here are the top five manufacturing issues along with solutions from USC Consulting Group that will help them sleep a little easier.
Problem: Retiring workforce
My best shift supervisor is retiring next month! He knows everything there is to know about the line. How can I possibly replace him?
“The median age of manufacturing workers is 48 and continues to grow older.”
Solution: Capture that knowledge!
Before your seasoned vets retire, create mentorship programs, have roundtable discussions and update manuals with their hard-earned know-how.
Problem: Skills gap + Jobs gap
I have positions to fill but I’m not finding any qualified candidates! How am I supposed to get the job done?
“Manufacturers will have 2 million jobs to fill by 2030. But there’s a skills gap out there. A sea of open jobs and few skilled people to fill them is a one-two punch.”
Solution: Build training into your budget
Skill them up yourself! Invest in training for new hires and partner with a local trade school or community college to target new grads.
Problem: Disengaged employees
Are my employees happy? It’s like they’re just going through the motions. Are they going to quit?
“Only 36% of U.S. employees are engaged at work and 74% are actively looking for a new job at any given time.”
Solution: Walk the shop floor
Talk to the team, ask how things are going and how you can help. If they’re short-handed, roll up your sleeves! Also, promote from within and invest in career development! It’s a proven way to build morale and engagement.
Problem: Supply chain disruptions
My line was down AGAIN because our overseas supply was stuck at a port. Again! We have high customer demand but can’t meet it because we can’t get the supplies we need!
“A 400% increase in shipping costs from China and a 45% increase in ocean freight wait times is expected to continue for 6 to 12 months, if not longer.”
It has long been suggested as idealistic and beneficial for the country, yet unrealistic. That is, until now. It’s time. Reshoring is a way for U.S. manufacturers to invest in the country and claim valuable subsidies, while also shielding themselves from any potential global supply chain issues.
Problem: Inventory management
All of my departments have a different view on inventory management! Some want excess inventory. Others want it just in time. Do we have enough? Too much?
Solution: Sales, Inventory & Operations Planning (SIOP)
SIOP expands on S&OP by adding a crucial component: Inventory. It helps you wrangle your inventory management and achieve the optimal supply balance.
Want to learn more? Read What’s Keeping You Up at Night? The Main Concerns of Top Executives.
These aren’t the only challenges keeping CEOs up at night. At USC Consulting Group, we have more than 50 years of experience helping manufacturers find opportunities for greater efficiency and productivity. Call us today to talk about how we can help you get a good night’s sleep.
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Slowly but surely, consumers are returning to the marketplace in full force after a number of tumultuous years. According to Industry Week, consumer spending is up 20% from this time last year. While that number is great for a manufacturer’s balance sheet, there are still challenges in the industry that are keeping CEOs up at night. Here is a look at a number of concerns of top executives — and ways you can tackle them head-on to get a good night’s sleep.
Problem: Retiring workforce
Ah, retirement. The day valued, longtime employees get their gold watches and leave the plant for the last time. It’s great for the employee, not so much for their CEO. That’s because as retirees head out to enjoy their golden years, they’re taking all of the institutional knowledge they’ve learned over many years on the job with them. The median worker age as of 2018 was 44.1 years old — over two years older than workers in other industries. And that was in 2018, the most recent stat. Those folks are 48 now. But you don’t need stats to tell you that. A walk around your shop floor (or a talk with HR) will give you the lowdown on how many of your employees are nearing retirement.
Solution: Capture that knowledge
It pays to be proactive in most situations and this is one of them. Capture that institutional knowledge before your seasoned vets walk out the door. Create mentorships between older and younger workers. Film a roundtable discussion featuring your best older workers talking about the ins and outs they’ve learned over the years. Ask your seasoned vets to be part of updating your manuals. At USC Consulting Group, when we go into a manufacturing business to improve efficiencies, we understand that the people on your front lines are your greatest resource and our greatest ally in that effort.
Problem: Skills gap
The other side of the institutional knowledge coin is the lack of skilled workers to replace them. You’ve heard about the skills gap, certainly, and this is it. There is a dearth of qualified people out there. Or enough people. Manufacturers in the U.S. are expected to see 2 million unfilled jobs by 2030. It paints a grim picture for companies that aren’t planning or prepared for the future of their workforce.
If you’re not finding skilled people, one solution is to create robust training programs that will get them the skills they need. It’s an investment, yes. But a worthy one.
Another tactic: Partner with a local trade school or community college to target upcoming grads.
Problem: Employee engagement (or lack thereof)
Are your employees happy? Do they feel valued and appreciated? If you don’t know, now’s the time to find out. To add to the problem of an aging workforce retiring and taking their skills with them, the new generation of warehouse and manufacturing workers are less and less inclined to begin and continue careers in the industry. The Great Resignation is a countrywide juggernaut that has prompted many of the younger workers to resign from and reject positions where they don’t feel adequately fulfilled or see a future career. The manufacturing industry is not immune.
The younger generation of workers needs validation and appreciation to stick around. Only 36% of U.S. employees are engaged at work and 74% are actively looking for a new job at any given time with their current employer.
Solution: Start walking the floor
Walking the floor is an oft-overlooked yet crucial way for managers and executives to engage with their team, foster relationships and directly affect employee retention in a positive way.
Getting out onto the shop floor shows employees that their employer cares about them and their career. For the employer, this strategy fosters retention while also affording an opportunity to discover any standout employees or ways to improve day-to-day operations. This directly combats an aging workforce by keeping new employees around long enough to become skilled themselves.
Another tactic: Invest in career pathing for your employees. It starts with promoting from within and giving people a roadmap for how to get there. It’s a powerful tool. In fact, 94% of employees said they would stay at a job that invested in their career development, according to a survey on LinkedIn.
Problem: Worldwide supply chain disruptions
While the COVID-19 pandemic has slowed down, the manufacturing problems it caused are still very prevalent in the industry today. Bottlenecks in every level of the supply chain and overcrowded shipping ports have become the norm over the past few years — with little signs of slowing.
According to Industry Week, a 400% increase in shipping costs from China and a 45% increase in ocean freight wait times — both increases relative to last year — is a trend that could continue for 6 to 12 months, if not longer.
Reshoring has long been suggested as idealistic and beneficial for the country, yet unrealistic. That is, until now.
The dramatic increase in outsourcing costs and interminable shipping wait times has resulted in many Fortune-500 companies — General Motors, Toyota and Samsung, to name a few — making considerable investments in the improvement, expansion and new developments of their manufacturing plants in the U.S.
Reshoring is a way for U.S. manufacturers to invest in the country and claim valuable subsidies, while also shielding themselves from any potential global supply chain issues.
Problem: Inventory management
Dialing in proper order quantities, reorder triggers and keeping an accurate and adequate lead time have long been hot buttons for manufacturers. The aforementioned bottlenecks and disruptions have not helped.
The issue compounds when all departments have a different viewpoint on the situation: operations, sales, finance and business executives can all have contrasting requirements and best practices when it comes to an inventory management philosophy. Any divergence in departmental expectations mixed with a lack of communication can spell disaster for any manufacturer.
SIOP expands on S&OP — the business management process that involves sales forecast reports and planning for demand and supply — by adding a crucial component: Inventory.
SIOP is a powerful tool that helps your company get departments in sync, ensures that everyone is on the same page and realistic about the process, helps you manage and roll with changes, and measures performance.
“A key to SIOP is to emphasize inventory as a strategic tool to help offset variation in either demand or production issues,” explains David Shouldice, Senior Vice President and Managing Director at USC Consulting Group. “One lever of control in the SIOP process is to make inventory harder working as a strategic tool.”
SIOP helps you wrangle your inventory management, achieve the optimal balance between not enough and too much, and settle back into Lean manufacturing principles that can eliminate waste and help ramp up your efficiency.
These aren’t the only challenges keeping CEOs up at night. At USC Consulting Group, we have more than 50 years of experience helping manufacturers find opportunities for greater efficiency and productivity. Call us today to talk about how we can help you get a good night’s sleep.
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William is the newly promoted COO at Acme Widget Company. He recently conquered his operational issues by improving efficiency and increasing throughput with the help of USC Consulting Group.
William’s current foe: Manufacturing labor shortages and the growing skills gap.
William has noticed, as his seasoned Acme Widget employees retire or leave, they take their hard-earned institutional knowledge with them when they walk out the door. The turnover is driving up operating costs and finding replacement workers with the skills, knowledge and expertise to do the job, which is increasingly technical, is a growing challenge.
But it’s not just that. It’s finding workers, period.
Analysts predict 2.1 million manufacturing jobs will be unfilled by 2030, costing the U.S. nearly $1 trillion in GDP.
So how does William retain his skilled workforce while finding new hires? He called his friends at USC Consulting Group. Together, they came up with a plan: An advanced training course to retain employees and an expediting strategy to onboard new talent. The goal was to upskill current employees with the knowledge they need today and tomorrow, cross train them to do multiple jobs, and speed up the learning curve for new hires.
It was a win-win! Employees dove into the training and became more engaged. They saw Acme was investing in them and their futures, creating loyalty and appreciation on the shop floor and beyond. Plus, William’s new hires joined the team quickly and seamlessly.
With better employee engagement and training, William saw improved retention along with increased production and reduced operating costs. He created a work environment where his workers were skilled, felt valued, and took pride in getting the job done. The skills gap was closed and labor shortages were no more!
Are you experiencing manufacturing labor shortages and a growing skills gap on your shop floor? Give USC Consulting Group a call and they’ll put their expertise to work for you.
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Supply chain disruption. Layoffs. The Great Resignation. Hiring wars. The past few years have not been smooth sailing for the manufacturing industry. Dealing with ongoing challenges can take more time out of your day than simply getting the job done.
So, how do manufacturers survive in this tumultuous business climate? Our subject matter experts here at USC Consulting Group have identified and examined six challenges as the most common issues bedeviling manufacturing right now, along with the strategies we offer to our clients to tackle them.
Manufacturing challenges include:
- The ongoing hiring wars
- The skills gap
- Creating a better frontline worker experience
- Digital transformation
- Supply chain disruption and inventory management
- Change management
Dive deeper into each one of these issues and learn the solutions to overcome them in our free white paper “The Consultant’s Guide to Overcoming Today’s Manufacturing Challenges.”
1. The Ongoing Hiring Wars
Like most other industries these days, manufacturing is grappling with the most challenging hiring market in decades. IndustryWeek reports that 54% of U.S. manufacturers are finding it difficult to attract skilled workers to get the job done. That’s up from 38% before the pandemic.
2. The Skills Gap
The hiring wars and the skills gap are giving manufacturing a one-two punch. Not only is it incredibly challenging to fill open positions, but filling them with people who have the skills and experience to get the job done right is proving to be nearly impossible. Hence, the skills gap.
3. A Better Frontline Worker Experience
Just 36% of U.S. employees are engaged at work, and 74% are actively looking for new jobs, according to a Gallup survey. With all of the hiring challenges and shortages of skilled workers, it’s more important than ever to focus on your frontline workforce.
4. Digital Transformation
Digital transformation has been an industry term for several years now. What it means, at its core, is utilizing digital technology to make processes faster, easier, safer and more efficient. The pandemic kicked digital transformation up a notch for manufacturers.
5. Supply Chain Disruption and Inventory Management
Supply chain and inventory management issues have long been a challenge for manufacturers, made worse by the pandemic. These are separate issues, but two sides of the same coin.
6. Change Management
All of these challenges represent and require some degree of organizational change. The term “change management” may seem like the jargon of the moment, but really, it’s about laying the groundwork for change to be successful in your organization.
Learn about each of these challenges in more detail and how to overcome each issue by downloading our white paper:
The Consultant’s Guide to Overcoming Today’s Manufacturing Challenges
If you’re grappling with any of these manufacturing challenges, USC Consulting Group is here to help. We are a global operations management consulting firm that has been helping organizations through more than 50 years of challenges. It’s our specialty. Give us a call today to talk about how we can help you.
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When’s the last time you walked the shop floor and engaged with your people who get the job done on the line day after day? If you’re a manager, COO or CEO, you’re dealing with bottom lines, efficiencies, throughput, supply chain headaches, hiring woes and everything else on your plate. It can seem like there aren’t enough hours in your busy workday to visit with the folks on the shop floor. We’d ask you to rethink that. Engaging with your employees might not seem like a bottom-line priority, but it’s more important now than ever, especially as it pertains to employee retention.
Here are a few stats to illustrate why:
- More than 1 million manufacturing jobs are unfilled in the U.S., according to a report released in March 2022 by the Bureau of Labor Statistics. That’s a record high in manufacturing, and the trend doesn’t show any signs of slowing down. If you’ve been on the front lines of hiring to fill those open positions, or if you’re vexed that your productivity is suffering because of a short staff, you know how tough it is to get people in the door, and the consequences for your bottom line if you don’t.
- Just 36% of U.S. employees are engaged at work, and 74% are actively looking for new jobs, according to a Gallup survey.
- 94% of employees say they’d stay at a company longer if it invested in their career development, LinkedIn reports.
- The pandemic-wrought supply chain disruptions and inventory uncertainty continue to plague manufacturers.
What those varied numbers and stats add up to is, it’s really tough out there. Hiring is more difficult than ever, the skills gap is widening, employees still on the job are not engaged, and all of it is affecting your bottom line, productivity, throughput, efficiency… the whole nine yards.
One simple way to start tackling all of those problems is walking the floor, talking to employees and getting a sense of what’s happening on the line day to day. We guarantee you’ll find it illuminating.
For over 50 years, we at USC Consulting Group have leveraged the benefits of doing just that. Here are six reasons why you should too:
1. You’ll gain a better understanding of your operations
At USC, that’s why we work side by side with frontline workers when we engage with a company. There are no better sources of truth of the day-to-day operations than the men and women on your shop floor. Experience first-hand the ins-and-outs of what makes your operations hum and what is hindering it.
2. Employee engagement equals business success
We’ve seen this time and time again. Just one example: We recently worked with a manufacturer that was dealing with dwindling efficiency due to challenges on many different fronts. They were having employee hiring and retention problems, machinery issues and operations and communications breakdowns. Management had let slip decades-old initiatives that had given them shop floor controls and visibility. This was a key piece to the puzzle. We helped them create a Management Operations System that involved them getting on the front lines and engaging with those employees. The result was a boost in production improvement. Read more about it in our case study, “Construction Materials Supplier Builds Up Equipment and Employee Engagement Programs.”
3. Build a promotion pipeline from your front lines
As you get to know your employees better, you can spot talent that could benefit from increased training and development for internal promotions. This has cascading benefits. Remember that LinkedIn statistic? Ninety-four percent of employees would stay at a company longer if it invested in their career development. That’s not just for white-collar jobs. And your whole staff will see your commitment to developing and promoting your people on the line. Internal promotions increase employee retention companywide.
4. You can also spot trouble sooner
Just as you’ll notice who is doing a stellar job, you may well find some people who aren’t. The weak links in the operation. You can also spot breakdowns in efficiency and opportunities to improve what may be going wrong by simply walking around on a frequent basis.
5. You’ll get great ideas to help improve operations
Our clients are all different, with unique challenges. The one thing we see everywhere we go is, the people on the line, the ones who do the job every day, can have the most informed and effective ideas — ideas that may not have occurred to management — about how to improve productivity, efficiency or any other challenges that arise.
6. You’ll help boost morale
Workers feel more valued and appreciated when the “higher-ups” take the time to get to know them, listen to them and are concerned about any issues they may be experiencing.
The bottom line is, take the time to walk around your facilities from time to time. There’s no downside to engaging with your workers on the shop floor. You’ll develop relationships with your staff, gain a good handle on what’s going on day to day, and create engagement up and down the line. Read more about it in “How to Increase Employee Engagement and Training to Improve Retention.”
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Warehouse operations are the foundation of any company that processes and ships orders. An efficient warehouse means that you’re optimizing labor costs, getting a good return on investment on your space, and, most importantly – ensuring your customers get their orders on time. At USC Consulting Group, we believe that warehouse operations can be used to boost your business’ growth. Want to learn effective strategies to do so? Keep reading to find out!
Reduce the Potential for Human Error
According to The Balance, human error is one of the most significant contributors to decreased productivity. Human error can set back deliverables, delay orders, and mess up operations systems. But how can you reduce such occurrences? Well, it will be critical to ensure that every employee undergoes proper training. This will help reduce the events of basic mistakes. However, there will always be a certain error level irrespective of training. To mitigate this, invest in solid warehouse design. Some solutions to implement in your design will be clearly labeled products, easy-to-access racks, and scannable items.
Organize Your Inventory Properly
A well-organized warehouse can pave the way for optimized operations. An intuitive workflow, logical storage, and segregated products will ensure your employees know where to go, what to do, and how to find items. By following a systematic method into your inventory organization, you’ll be able to process orders faster and with more ease. Below are some easy organization strategies to implement today:
- Best selling products close to the front
- Stack inventory higher to optimize space
- Use information and photographic labels
- Always store like products with like products
In addition to physically organizing your warehouse, keep everyone on track and productive through digital tools as well. For example, create a process map to allow your team to analyze processes and outcomes while assigning and reviewing tasks. This will keep your workflows organized, as the whole team will get both the micro and macro picture of what they’re working on.
Incentives for Workers
You’re relying a great deal on your employees when it comes to warehouse operations. You will have to keep your workforce happy and thriving to boost productivity. Setting up an accepting and uplifting workplace will be critical for this, as company culture sets the tone for employee performance. In addition, offer incentives to workers to motivate them to do better. Reward systems could be tiered or pay-based, but make sure the rewards are tangible and make a difference to your workers.
An essential part of any company’s operations is tracking results, Demonstrating Value reports. Besides monitoring marketing and financial performance, be sure to follow your operations performance. Set up metrics for evaluation, for example – time efficiency, capacity utilization, safety, production costs, and quality concerns. Use logistics technology to track these results consistently for reliable data, and then streamline from there. This is a great way to optimize operations, as it will keep you pivoting and adapting to change. Furthermore, warehouses have lots of moving parts. Tracking results helps narrow down which strategies are working and which aren’t. You also want to consider real-time data so you can see how each warehousing process is doing in a timely manner.
Running a warehouse is a complex puzzle, and it requires an excellent level of planning, physical optimization, and analysis. Be sure to follow these strategies to ensure that your warehouse operations run like a well-oiled machine – it is truly a great way to grow your business to the top.
Need additional support for optimizing your warehouse operations? USC Consulting Group helps companies reach their highest potential by improving operating excellence across the supply chain. Click here to learn more about what we do today.
*This article was written by Dean Burgess. Dean runs Excitepreneur, which celebrates the achievements of entrepreneurs. He understands that there are many types of entrepreneurs, and strives to provide helpful information to assist them in achieving their particular idea or goal.
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There’s no sugar-coating it. It’s tough out there for manufacturers on the front lines of the hiring wars. We are in an unprecedented hiring-and-retention situation in this country. The Great Resignation numbers just keep climbing. According to CNN, 47.4 million people left their jobs in 2021. That’s a lot of open positions and a lot of people out of work. You’d think it would be a hirer’s market. It’s just the opposite.
“54% of U.S. manufacturers are finding it difficult to attract skilled workers to get the job done. That’s up from 38% before the pandemic.”
Companies in all industries are feeling the hiring pain, but manufacturing is getting hit especially hard. IndustryWeek reports that 54% of U.S. manufacturers are finding it difficult to attract skilled workers to get the job done. That’s up from 38% before the pandemic. Competition for skilled workers to fill all of those jobs has never been more intense. And that competition isn’t just coming from other manufacturers. It’s also coming from other industries, like transportation, warehousing, even retail.
Hiring is only one part of the challenge. It’s also about retention. From a study by the Workforce Institute at HR solutions company UKG, manufacturers are getting “ghosted” by workers who simply don’t show up for their shifts. A shocking 68% of manufacturers said they let employees go because of it between January and March 2021.
So, what’s going on? Instead of the Great Resignation, you might call it the Great Reassessment. As Industry Week puts it, workers aren’t just reassessing what they do for their 9-to-5 and walking out the door, they’re also thinking about where they do it and why they do it. People have streamed out of the workplace in record numbers because they want more. More pay, more flexibility, more benefits, more meaning and more happiness.
Manufacturers who understand that is the key to winning the hiring wars. Let’s look at how to put that into practice when you’re trying to hire and retain employees.
What manufacturers can do to hire and retain workers
Here are six strategies to help you attract and keep the people you need to get the job done.
1. Open your company purse strings. To borrow a line from Cuba Gooding Jr., show them the money. With McDonald’s paying more than $20 an hour to flip burgers, it’s tough to compete with that. But look at what your competition is paying and match it, or if possible, exceed it. Job seekers today are ultra-choosy, and a high salary is one of the most important weapons in your hiring arsenal.
2. Cast your net wider. Do you have a background check that excludes people who have had felonies or other arrests? Would you consider hiring a retiree? How about someone with special needs? From the same Workforce Institute study, 62% of manufacturers have hired or considered hiring people with special needs, 56% have hired retirees, and 52% are considering hiring people who have been incarcerated. You may not have considered this talent pool in the past, but there are great advantages to hiring people who traditionally have trouble getting a break. Increased loyalty is a big one.
3. Work with schools to train and recruit students. The National Law Review points out that an entire generation of manufacturing workers is getting ready for retirement, and younger workers simply don’t have the skills to take up the mantle. By training students and those just out of school, you’ll be creating a pool of new employees who have the skills to get the job done in your workplace. This, in turn, will help reduce the skills gap that separates your new hires from your seasoned veterans and retirees.
4. Rethink your benefits. Your benefits package is especially important in luring Great Resigners back into the workplace. As we said, many people have quit their jobs because they’re looking for something more, and benefits are a big part of that. Robust health care that doesn’t cost an arm and a leg is a must. But think outside the box, too. Industries like retail and hospitality are luring younger workers by offering to pay off their student debt, cover childcare expenses and grant generous PTO.
5. Invest in upskilling and training. This is vital for retention, but it’s important for hiring, too. If your candidates know you are committed to your current employees’ futures, giving them the opportunity to learn new and valuable skills, it’s a big plus. It shows you’re in it for the long term, not just hiring a warm body to fill a hole on the line. For your employees who are already on the job, upskilling and training can increase their engagement exponentially. One of our clients recently put a new training program in place for longtime employees and awarded certificates when they completed the course successfully. Engagement went through the roof, along with employees’ pride of achievement. A benefit for you, along with happier, more engaged employees, lies in cross training your people. That way, if and when an employee “ghosts” you on a shift, you’ll have a pool of qualified people to step in and do the job.
6. Consider your efficiency. Are your machines breaking down frequently? Are there stoppages on the line? The same client of ours that invested in training and upskilling realized that their employees were continually frustrated with snafus on the line day in and day out. Correcting those problems and making your operations as efficient as possible gives employee satisfaction a boost and helps with retention. Also, it’s crucial to involve employees at all levels, from the corner office to the line on the shop floor, in the process of improving your operation’s efficiency. People with varying viewpoints of the job bring a variety of opinions and ideas to the table.
At USC Consulting Group, we’ve spent more than 50 years helping companies improve employee engagement and realize greater efficiency in their operations. Ready to talk about what we can do for you? Give us a call.
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After a couple of difficult years, manufacturing is roaring back in the U.S. There’s a lot to be optimistic about. Consumers are consuming again, fueling high demand. Manufacturers in many facets of the industry are reporting a big uptick in orders, and it shows no signs of slowing down. But, that doesn’t mean manufacturing will enjoy a challenge-free year. There are several factors that continue to bedevil the industry. Here’s a run-down of some of the manufacturing challenges you might be facing in 2022, and strategies to handle them.
Challenge: Shortages of skilled workers
This is a big problem for many industries, and manufacturing is getting hit especially hard. IndustryWeek reports that 54% of U.S. manufacturers are finding it difficult to attract skilled workers to get the job done. That’s up from 38% before the pandemic. From a study by the Workforce Institute at HR solutions company UKG, pain points for employers include getting “ghosted” by workers who simply don’t show up for their shifts (a shocking 68% of manufacturers said they let employees go because of it between January and March 2021), high turnover and intense competition for skilled workers.
Strategy: Focus on retention and hiring
One of the best ways to win the talent war is to keep your people from walking out the door. Employee retention means focusing on their needs, their experience in your workplace, and their future. Promote from within. Provide your people with opportunities for increased training and upskilling, so they can learn and grow. Lay out career paths for your frontline workers who you think may be able to move up the ladder, so they can see the future with your company is about more than their current job. Involve them in the process when you’re looking at your operations with an eye toward greater efficiency. Another powerful way to boost your overall efficiency is to cross-train your people to do more than one job, so that when someone doesn’t show up for a shift, someone else can easily step in. All of this training and upskilling helps employees feel engaged. It lets them know you believe they are important to your company’s success.
When you do need to hire externally, cast your net wide. From the same Workforce Institute study, 62% of manufacturers have hired or considered hiring people with special needs, 56% have hired retirees, and 52% are considering hiring people who have been incarcerated. You may not have considered this talent pool in the past, but there are great advantages to hiring people who traditionally have trouble getting a break. Increased loyalty is a big one.
Challenge: Supply chain disruptions
This has been a major headache for manufacturers since the start of the pandemic, and it is still causing problems.
Strategy: Look at solutions to address time, pricing, production, inventory and information
According to David Newman, Supply Chain Practice Leader for USC Consulting Group, there are a number of tactics to use to combat supply chain disruption, but none are perfect. The most common and easiest to employ are the time solutions. Things like expediting freight (which is a supply-side response), or delaying order fulfillment (which is a demand-side response). But, if your customers have other options and they have low customer loyalty, delaying delivery dates can significantly reduce your revenues. Alternatively, premium freight if you have a low margin product can wipe out profits. Prices can skyrocket, and if you can’t pass those costs on to the consumer, it can erode your margins.
For more supply chain expert advice, watch Newman’s full video, “How to avoid supply chain disruptions” below as he shares his best insights for manufacturers to get around this vexing challenge.
Challenge: Inventory uncertainty
Supply chain disruptions naturally lead to worries about inventory. Manufacturers who have been committed to Lean methodologies have been tempted to stockpile inventory, just in case. But that’s a slippery slope that can erode your efficiency and margins.
It’s about adding inventory to your sales and operations planning process. It’s a powerful way to balance your inventory, achieving the optimal level between not enough and too much. Between just-in-time and just-in-case. It helps you settle back into Lean, eliminate waste and ramp up your efficiency.
The SIOP planning horizon should be at least a rolling 14-month period. We recommend that our clients update their plans monthly. Some do it more often than that. The point is covering a sufficient span of time to make sure the necessary resources will be available when you need them. The plans take into account projections made by the sales and marketing departments and the resources available from manufacturing, engineering, purchasing and finance. All of that together works toward hitting the company’s goals and objectives.
If you’d like to learn more about SIOP, download our (free) eBook, “Sales, Inventory & Operations Planning: It’s About Time.”
2022 will present its share of challenges for manufacturing. To talk with the experts at USCCG about how to solve them, contact us anytime.
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