Everyone is Talking About Labor Shortages in Manufacturing
According to a recent study by Deloitte, as many as 2.1 million manufacturing jobs will be unfilled through 2030. The report warns the worker shortage will hurt revenue, production and could ultimately cost the U.S. economy up to $1 trillion by 2030. In another article, The World Economic Forum said the COVID-19 economic shock has only made the skills gap broader and the need to close it more urgent.
Two additional parallel studies—The Skills Gap in U.S. Manufacturing: 2015 and Beyond and Overwhelming Support: U.S. Public Opinions on the Manufacturing Industry—draw perspectives from U.S. manufacturing executives and the American public to reveal that American manufacturing companies face a significant skills gap over the next decade, largely fueled by baby boomer retirement and too few young people who see manufacturing as a career destination.
There’s only so much that manufacturers can do to recruit workers. They really need to figure out how to automate more of the work. Automation will alleviate skilled worker shortage but only up to a point. The product development lifecycle itself is malleable but it will reach its limits and changes to the cycle cannot altogether replace needed manufacturing skilled workers. The reason these measures are not the long-term solution is simple; the skilled labor shortage is a capacity problem and capacity shortages are only partially solved by leveraging operational excellence and automation to improve productivity. The realities of current needs and urgency require creative solutions beyond the traditional solutions.
Savvy manufacturers are thinking beyond the traditional solutions of upskilling and retraining of displaced workers to address skilled labor shortages leveraging today’s technology. In many cases, it takes several months for upskilling and retraining efforts to bear fruit, and where there are needs, most employers cannot afford to stay with this approach without it having an adverse effect on their operations.
While no single action addresses the entire problem, some manufacturers are thinking differently and, in the process, changing the perception of manufacturing.
Three Ways Manufacturers are Changing the Perception of Manufacturing
- Modernizing the systems that run their business
- Making better use of existing workers
- Improving operations
By modeling and simulating parts and processes with digital manufacturing simulation software, manufacturers can:
- Improve the quality of manufacturing decision-making
- Improve the processes to mitigate the skilled labor shortage
- Create cost savings
- Reduce time to market
- Create a process that unites digital technology with the physical execution of manufacturing
Digital Factories Simulate Manufacturing, Automating Without Slowing Down Workflows
Digital factory investments have led to an average increase of 10% in production output, 11% in factory capacity utilization, and 12% in labor productivity, according to Deloitte.
Utlizing digital factories can address not just what components of the manufacturing value chain to outsource without increasing costs, but where to outsource as well. This approach is not about closing plants and shipping jobs abroad, rather it is designed to address situations where skilled workers are simply not available.
In make vs. buy situations manufacturers are usually comfortable outsourcing commodity parts to save on costs, but prefer to retain manufacturing control over proprietary parts because of quality control. In many cases the costs can be driven down for proprietary parts by outsourcing some as well. With the right manufacturing intelligence platform, any concerns over quality can be mitigated by using the software to specify not only how the part should be made, but also what it should cost.
Utilizing Shifting Skill Sets of Potential Employees
One of the most notable shifts since the 2015 Deloitte skills gap study is that half of the manufacturers surveyed now cite “shifting skill sets due to the introduction of advanced technology and automation” as the number one source of hiring shortages – fueled in part by the adoption of technologies like robots, machine learning and artificial intelligence.
By shifting their product development processes to more automated and digitized solutions, manufacturers may actually find that they are hiring for different sets of skills, and that those skills are much more readily available in today’s workforce.
Manufacturers can begin to address the labor shortage by finding the right region to outsource specific parts to and take advantage of the scale and expertise that has been built in that region(s) and keep costs in line or even gain cost efficiencies.
The lack of skilled labor means fewer internal resources can be easily devoted to carrying out a new automation strategy without pulling from existing operations, and it is imperative that manufacturers get efficient quickly in resource allocation. Labor shortages will not go away any time soon. The best approach is to find the right digital manufacturing software that can allow a manufacturer to do more with less, while also providing a single software platform to streamline efforts across the entire product manufacturing process.
The Future of Manufacturing is Digital Transformation
by aPriori President & CEO, Stephanie FeradayRead Article
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