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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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The food and beverage manufacturing industry is facing labor shortages. While labor challenges aren’t new to the industry, the reasons for this current situation are. The pandemic brought about a seismic shift and disruption for nearly every industry, F&B included. Many companies, like Smithfield Foods and Tyson Foods, saw closures of multiple facilities. Others stayed the course but laid off employees, and as the country begins emerging into a post-pandemic new reality, some of those employees simply aren’t returning to their jobs.
There’s also the matter of older workers retiring and not enough young workers entering the industry, leaving a skills gap as those veterans take their institutional knowledge out the door with them.
Together, they add up to a two-pronged labor shortage problem. You not only don’t have enough people to get the job done, the people you do have aren’t as skilled as the ones you lost.
Let’s look at both of those prongs in more detail.
Labor shortage challenges and questions
Like many industries, F&B is getting a handle on whether changes brought about by the pandemic will be permanent. Some challenges like supply chain disruptions can go away forever, please, but other aspects, like the adaptation of workflows, processes and procedures have proven to be positive changes.
Some questions F&B processors are grappling with now:
- Our staffing levels are down. Do we really need to staff up to pre-pandemic levels?
- Our demand is increasing. Can we meet rising demand with less staff?
- Will new configurations on the shop floor to accommodate social distancing continue if and when the entire workforce is vaccinated?
- How will companies deal with potential work stoppages in the future?
- Will we adapt to more regional, less centralized facilities?
- Should we change our forecasting model from yearly to quarterly or even monthly to be more agile?
Solution: Process improvements
The answer to all of these questions is: It depends on efficiency. Some companies, when aiming to do more with current assets and employees or, especially when they’re seeking to do more with fewer employees because of a labor shortage like the one we’re in now, turn immediately to automation, machinery upgrades, even artificial intelligence. The aim is to take the human element out of the equation or reduce it dramatically, with the goal of streamlining and speeding up operations.
But is all of that upfront expense worth it?
Time and time again, clients have come to us after trying to “buy their way to profitability” through large capital investments in technology and automation, only to see that profitability disappear because of high overhead costs of those upgrades.
A better solution to dealing with this labor shortage, keeping up with rising demand, and doing it all with fewer people is to optimize your processes first.
At USC Consulting Group, we’ve helped hundreds of businesses navigate operational challenges so they can get the job done efficiently and better meet the needs of their customers. The key to doing more with less, or even doing more with your current assets, is taking a deep dive into your operations to discover ways to be more efficient. That’s one of our specialties, and we’ve been doing it for more than 50 years.
In one example, we worked with a poultry processor that experienced just this situation, making huge capital investments only to see any gains eaten up by high overhead costs.
We created cross-functional teams to evaluate the operation, highlighted the non-value-added activities and conducted analysis. Based on those findings, the teams identified waste and process variations that were causing lower yields, created improvements in workstation layouts and material flow, and conducted training sessions designed to impact yield performance. All told, we identified 300 loss points within their operation. Results?
By the end of our six-month engagement, the company saw a financial gain of $100 million, all realized without capital investments. That’s not chicken feed! Read more about it in our case study, “Poultry Processor Gobbles up Savings From Process Automation.”
Skills gap challenges
The other prong to today’s labor shortages in food and beverage manufacturing has to do with older, veteran workers leaving their jobs and taking their knowledge with them.
If you’ve got a team filled with long-tenured employees, you know what this is like. It’s one thing to train someone new on the basics of the job. It’s something else to lose your best worker who spent a career doing that job. It’s the experiences, processes, deep understanding and “this comes naturally” abilities of your people to get the job done in an intuitive way. The hard-won, trial-and-error-gleaned instincts that your senior people have absorbed from years on your front lines. That’s your company’s institutional knowledge.
When older workers retire or are laid off, that’s what you’re losing.
Skills gap solutions
There are a few tactics you can use to help close the skills gap.
Mentorship. Do you have a mentorship program in place? It can be an invaluable (and very low cost) way to transfer knowledge from your seasoned pros to your newbies.
Recorded interviews. Talk to your older employees about lessons learned on the job, hard-won experience and mistakes that taught them the right way to do things. Record those interviews for new hires to watch as part of their onboarding process.
Involve employees in process improvements. We’ve found that one of the most critical parts of enacting process improvements to create greater efficiency in our clients’ operations is getting buy-in from the front lines. Without it, we can find all the hidden opportunities for efficiency in the world but putting them into practice will be a challenge without your team on board. Getting your employees invested in process improvements from the get-go also has the added benefit of creating institutional knowledge. The younger workers were there when the process was changed, they contributed to it and they’ll carry that knowledge with them as long as they work for you.
Like many of the challenges we’ve experienced over the past couple years, silver linings can emerge from food manufacturing labor shortages and skills gaps. You can find better, more efficient operations without making huge capital improvements, and through that process, you can create institutional knowledge in your employees and close that skills gap for good.
At USC Consulting Group, we’re subject matter experts in helping companies find more efficiency out of their current assets. Learn more about doing more with the same or less resources in our white paper “Strategies for Meeting Increasing Customer Demand.”
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Even the most bearish of economists couldn’t have predicted the degree to which the nation’s economy has changed in a mere six months, let alone years. The unemployment rate is in the double-digits, long-standing companies are closing their doors for good, and working from home has become the new daily routine for employees in numerous industries.
But one thing hasn’t changed – manufacturers remain in hiring mode, eager to find and recruit experienced laborers to fill the manufacturing skills gap, which is widening. Business owners must face this new reality head-on and adjust to remain as productive and competitive as possible by leveraging existing resources and making sense of data.
Over 522,000 positions require filling
According to the most recent statistics available from the Bureau of Labor Statistics, detailing job opening and labor turnover from this past June, there were 522,000 jobs among manufacturers that had yet to be filled across the U.S., nearly 20,000 more in less than two years’ time.
“As many as 4.6 million jobs may be left unfilled between now and 2028.”
Manufacturing is a broad field, from consumer electronics to packaged goods. Virtually all of them are in the midst of a work experience deficiency. If conditions don’t change, some 4.6 million jobs may be left unfilled between now and 2028, according to forecasts from the Manufacturing Institute.
Speaking to CNBC, Samsung America Regional Director of Human Resources Sherri Satterfield said that while her company has received plenty of applications from those ready and willing to work, applicants frequently don’t have the background in the industry that’s required to make the transition seamless.
“We’re pulling candidates from all over the surrounding counties, and they don’t always have that experience,” explained Satterfield, who works at the electronics conglomerate’s Newberry, South Carolina-based plant. “So it takes them a while to get acclimated to it. Some of them decide that it’s not for them, and then other ones they activate, they’re here for a good amount of time.”
Hiring complicated by COVID-19
The economic aftereffects of the lockdown, instituted in virtually every state to control the spread of the novel coronavirus, have made the vetting process even more complicated and prolonged. For almost the entirety of 2019 and the first two months of 2020, joblessness in the U.S. was at record lows, under 4%, according to BLS and Labor Department figures. Once it ballooned to nearly 15% in April, manufacturers were inundated with employment inquiries, frequently from people who were laid off and looking to enter an all-new career. The sheer volume of resumes made locating experienced laborers the equivalent of finding a needle in a haystack.
Given the ongoing recession and the urgency that COVID-19 has created, manufacturers are adjusting their expectations and making the most of their situation. In short, they’re optimizing existing work processes, their skilled laborers’ capabilities, and their current equipment. Some of this involves investing in new technologies or better utilizing existing ones.
Utilizing technology to reimagine the shop floor
While the manufacturing skills gap is often considered a human resources issue, technology can help to upskill potential or current employees to address it. Case in point is Honeywell Technologies. As detailed by IndustryWeek, the multinational defense contractor is leveraging both augmented reality and virtual reality for onboarding workers and providing their existing employees with new skill sets.
Eric Seidel, vice president of strategy and chief marketing officer at Honeywell Technologies, told the publication that since many of their workers are entering retirement, they’re bringing their often decades-long experience with them. Taking advantage of AR and VR helps new and current hires to learn more efficiently and quickly.
“Instead of traditional classroom learning, AR and VR allow someone to actually perform the task and therefore the learning curve is much faster,” Seidel explained to IndustryWeek.
He further noted that intelligent wearables enable workers to be more hands-on in their understanding of how to implement certain jobs, tasks, and processes so they’re learning and working simultaneously. Along with employee education, wearables can collect data around footprint and equipment utilization, which can be used to better optimize the shop floor.
In essence, Honeywell is reimagining the shop floor, where workers are learning something new every day and putting those lessons into practice almost immediately. This is a strategy that manufacturers may want to consider in order to optimize existing processes or make more strategic adjustments to when employees are on the shop floor and for how long. Revamping work shifts can help increase productivity with the workforce they have.
Another way that manufacturers are aiming to close the skills gap – and succeeding in those efforts – is by making processes more predictable in terms of results. Outcome simulation gives workers the foresight they need to know what to expect in terms of throughput and where potential logjams may exist in the supply chain. The ability to replicate processes so they’re done virtually is accomplished through VR.
Samer Forzley, CEO of Simultech Multimedia, likened outcome simulation to what prospective military or commercial pilots do to obtain certification for careers in the cockpit.
“Think about a pilot who learns through simulating a variety of problems that could occur,” Forzley told IndustryWeek. “We are doing the same thing for the factory floor.”
Forzley added that simulation is effective not just for people who are brand new to manufacturing, but also those who are long-tenured. Since technology is always getting more advanced, utilizing tech helps workers acquire new skill sets or refresh what they’ve already learned.
Dive into data
Much can be learned from data, but manufacturers must first be able to obtain it and parse it, said Marco Annunziata, senior contributor for Forbes. Improved data collection and visualization in addition to well-defined KPIs can help manufacturers to get a better understanding of the extent of their skills shortage in order to best address it.
“We need more analysis and data to better understand the problem,” Annunziata wrote.
You don’t necessarily need workers with decades of experience to remain competitive. You have to work smarter by making the most of your existing resources and knowing what data to collect to diagnose pain points. Whether it’s asset utilization, cycle time reduction, or quality improvement, USC Consulting Group can help you close the manufacturing skills gap by making processes smoother and more efficient. This will help you rediscover what you do well and how you can become better. Contact us today to learn more about what we can do for you.
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For many industries, the skills gap is a troubling issue. Every year, more and more experienced workers retire, taking valuable expertise with them. Fortunately, there are things you can do to reduce the harmful effects of high turnover at your organization.
The Continuous Improvement philosophy is especially beneficial in this area. Using this philosophy, you will work on continually improving your operations and as such, you will have to document all of your processes and train new staff. Through these activities, you will be able to transfer the knowledge of your skilled workers to the next generation helping to close the skills gap. It is important to remember that continuous improvement is not just a concept – it represents a willingness to question what you know and work on becoming better. Accordingly, here are five ways you can use continuous improvement to lessen the impact of the skills gap at your organization.
- Map processes and identify areas that are not well-documented
The first thing you should do when working on a continuous improvement project is use process maps to get an accurate view of what your processes really are. You may find that some of your processes rely greatly on the knowledge and expertise of a few individuals. Those are the processes that are accomplished through tribal knowledge and require documentation and transference. Once you thoroughly map out all of your processes, you can begin to facilitate the necessary knowledge transfer, which is done with education and training. MindTools pointed out that continuous improvement requires an ongoing effort to look at processes and solutions from new perspectives. The way a certain activity has always been done may not be the right way going forward.
“To close the skills gap time should be spent developing new procedures and plan for training.”
- Turn tribal knowledge into actionable items
Once you have identified what your processes ought to be, you also need to identify who your organizational influencers will be. These are the people you will spend time with developing new procedures and implementing training. The best way to do this is to make the experts a part of the initiative. In that way, no information or business activity will be overlooked. Your teams can then begin scheduling changes and educational sessions.
- Conduct regular training sessions
At this point, you know what your new processes are and who you can rely on to carry the changes. Regular training programs can help to bypass the skills gap by ensuring that all your employees are given the tools and knowledge to do their jobs well in the future. If you want to make continuous improvement a part of your culture, training has to become an ongoing activity at your organization. Because your experts will be heavily involved in the training, the sessions are sure to be more effective than just having outsiders bombard staff with new information. According to MindTools, teamwork is essential for solving problems and strengthening operations.
- Eliminate unnecessary activities
Continuous improvement is meant to help you improve your operations As such, the philosophy involves eliminating overproduction, improving quality, operating more efficiently, reducing idle time, and getting rid of unnecessary activities. As your operations become leaner, you will see the benefits in the form of cost savings and increased profitably. It is relevant to point out that money can always be reinvested in the business for expansion purposes, whether to take on new product lines or investment in more training and technology.
- Use software to streamline your processes and unite systems
With new processes and regular training sessions taking place, the last piece of the puzzle is having a sophisticated and comprehensive management operating system. Using an MOS will allow you to keep track of KPIs, monitor the effectiveness of your processes, and maintain visibility on the plant floor. Additionally, all the improvements you do will be reflected in the system, as it will be the link between all your various IT assets and production lines. Having one centralized system allows you to manage your plant in a more streamlined and holistic way. All the efforts of your continuous improvement program will feed into your MOS and be accessible throughout your organization. The idea here is that what used to be tribal knowledge, localized to a few senior workers, is now documented, stored, and reflected in the technology that comprises your operational backbone. Passing it on to newer workers will help close the skills gap.
Don’t let the skills gap affect your organization.
Make learning and growing a priority
It goes without saying that a big part of making continuous improvements has to do with learning. In reference to the skills gap issue, IndustryWeek pointed out that in an increasingly technology-reliant industry, the rate at which employees learn new skills and become technically proficient is advancing rapidly. Edward Hess, professor at the University of Virginia’s Darden School of Business, explained that organizational leaders need to account for what they don’t know and continue learning in this sophisticated environment.
“Cognitively we all are naturally fast, lazy, reflexive thinkers who seek to confirm what we know,” said Hess, according to the news source. “It is important to learn how and when to make your thinking more intentional and deliberate. You must actively seek to develop your critical thinking and innovative thinking skills.”
The lesson that Hess points out is at the core of continuous improvement – education is key. Manufacturers that demonstrate an eagerness to improve their own skill sets will be able to circumvent many problems related to the skills gap. You can employ this approach and ensure that, not only will tribal knowledge be preserved in your organization, but you can build upon it as well.
In today’s manufacturing industry, the “skills gap” is one of most pressing and talked about issues. Last year, many major media outlets covered the issue extensively, demonstrating its importance. Manufacturing requires a high level of technical proficiency and encompasses a wide range of competencies. At a time when the industry is witnessing the retirement of the largest percentage of its workforce, the lack of skill and technical knowledge of new workers is troubling.
The “skills gap” is a major problem in manufacturing today
The oldest baby boomers turned 65 in 2011, and each successive year, approximately 10,000 more seasoned workers will retire, according to the Pew Research Center. Fortunately, manufacturers can enact a few strategies to offset the impending brain drain that is taking place. IndustryWeek reported on a Pennsylvania chemical producer that faced the problem of having 150 skilled labor jobs open and unfilled. Ranging from welders to mechanical engineering technicians, the company struggled to hire qualified staff. The unfilled positions represented 38 percent of the 400 skilled-worker positions open at any point in time. The CEO of the company explained why it was so difficult to fill positions.
“In some cases [a position] takes as long as a year to fill because of a mismatch of skills — either in the skills area we need or in the geographic area where we need that skill,” said the CEO , according to the news source.
Lean methodologies will alleviate the skills gap problem
According to Reliable Plant, the lean manufacturing philosophy does great things for improving training practices and can help preserve expertise in a facility. When lean methodologies are used in training programs, the benefit is that a facility is able to make progress in multiple areas at once and keep best practices at the forefront. Instead of training employees and working toward continuous improvement in a silo-ed fashion, training should be ongoing and encompass continuous improvement principles to promote greater delivery and material development.
Accordingly, here are 5 ways companies can work on developing highly skilled employees and closing the skills gap:
- Implement Continuous Improvement
One of the best ways manufacturing companies can establish lean operations is to always improve upon existing processes. As an organization commits to developing best practices on an ongoing basis, that effort should involve constant training of employees. Plant improvements must always be reflected in process documents and then incorporated into employee work routines. Companies should motivate staff to collect data, analyze information, and raise job performance to the next level based on the findings. The most important thing to remember is to always improve. If a manufacturing company is able to do this, they will find less of a skills gap among their ranks because project managers will continually educate their teams on the latest amendment to their routines.
“The best thing an organization can do is facilitate the sharing of information.”
- Encourage staff communication
Companies that encourage their staff members to communicate about work issues, across departments and geographies, will be able to retain a greater amount of valuable tribal knowledge, should seasoned workers suddenly leave. The best thing an organization can do to avoid a skills gap is to facilitate the sharing of information, so when experts leave, their information will have already been passed down to the next generation. Also, for training purposes, giving workers a voice results in more active training sessions and higher levels of engagement. That enthusiasm will carry through to the plant floor, where the workers can turn knowledge into results. The more actively a company involves employees in training, the more effective the results are.
- Focus on customer satisfaction
Interestingly, an effective strategy for raising technical expertise at a facility is making its training program very customer-centric. The lean manufacturing philosophy stresses the importance of creating value for the customer. Organizations can train their employees to think about the end result, regardless of their position. Someone on the assembly line with an understanding of what the customer ultimately wants to see is in a better position to make the right decisions. Likewise, managers can help their teams see what their individual skills gap is, and what they need to develop to excel in their job and create good products. It is important to remember that training employees to think of the customer is a way of putting his or her money to good use. Plant managers are also more likely to pass on their expertise when they understand how that act will benefit the customer in the long run.
Ongoing training programs are essential in the manufacturing industry.
- Address the reality on the ground
Often, plant managers will give directives to facility staff without getting involved in the day-to-day details those directives might entail. This is not an effective way to manage a plant and it is essential that managers take the time to get to know workers, listen to their feedback, and incorporate their opinions into company plans. When implementing a training program, management will benefit from this approach because they will have a chance to watch staff members perform their job tasks, which facilitates the development of better training materials. This approach is also helpful down the road, as managers will need to check to see if employees are putting their training to good use – preventing a skills gap.
- Develop and maintain proper documentation
The importance of updating standard operating procedures in a facility cannot be emphasized enough. Lean managers not only use process documents to guide their operations and decision-making, but they also use visual aids for brainstorming and conceptualizing projects. One of the best ways to understand a concept is to use diagrams and process maps. Manufacturers should use work flow maps, diagram their production processes, and always refer to SOPs. When a facility operates in this way, training is greatly enhanced as the company culture is already based on doing things by the book and the skills gap is more easily avoided. The effort required to change the way something is done is much less if it can be addressed simply by amending process documents. If a facility does not use documentation with vigilance, introducing a new process can involve hours of explanation and unnecessary work.
Ultimately, learning and development in the manufacturing industry is crucial. Given the aforementioned skills gap, as well as the proven benefit of making training a regular part of everyday operations, lean methodologies should be a part of every organization’s approach for managing their operations.