Manufacturing and critical supply chain companies are concerned about increasing labor shortages, as well as impending retirements among an aging workforce, and the impact this “boomer brain drain” will have on their productivity. The National Association of Manufacturers reports that nearly 90% of companies surveyed said they rely on their older workers’ experiences, with 46% reporting they do so “to a great extent.” With the Great Retirement looming over the remainder of this decade, the deep and broad impacts on the current and future manufacturing workforce are undeniable.
According to the latest census data, nearly one-fourth of the U.S. manufacturing workforce is 55 or older. As these aging members of the nation’s fifth largest employment sector retire, companies are grappling with the reality that the “tribal knowledge” of their most experienced workers is walking out the door.
These facts and statistics are sobering, given that the manufacturing industry was one of the hardest hit by the Great Resignation, with a near-60% increase in job quitting, compared to pre-pandemic numbers.
This combination of the aging, retiring workforce, added to an overall labor shortage, has resulted in manufacturers facing employee absenteeism, rapid turnover, and workforce variability. These are increasingly impacting quality, and hitting manufacturers’ bottom lines.
A different environment and workforce requires a different strategy. This includes a more personalized approach to on-boarding, training, and on-the-job guidance. As a result, manufacturers must seriously consider adapting their hiring, onboarding, workflow learning and training processes to support a more flexible future workforce in manufacturing.
These pressures have made workforce development and workflow optimization top of mind for leading manufacturers deploying AI-based worker technology to maintain business continuity and advance their operations. In addition, such technology is increasingly being used to capture and digitize tribal knowledge, turning it into a sharable corporate asset. Furthermore, to mitigate the impact of demographic shifts and labor shortages, AI can help identify the re-skilling and targeted training needs of individuals on the front line.
The digital transformation in the manufacturing industry continues apace. According to Deloitte’s 2023 Manufacturing Industry Outlook, manufacturers have increased their digital investments over the past few years, and continue to accelerate the implementation of emerging technologies. Spurred on by many macroeconomic forces, companies that have accelerated their adoption of new tech advancement have demonstrated a higher level of resilience than others. The manufacturers surveyed for the report plan to focus on a range of technologies to increase their operational efficiencies over the next 12 months, with 26% of respondents indicating that integrating artificial intelligence (AI) and machine learning (ML is a priority. In addition, 61% of respondents indicated that partnering with specialized technology companies is a primary growth strategy in the coming year.
Digital technologies such as AI and connected worker software are now central to the corporate innovation portfolio of any business leader and crucial to boosting productivity. Solutions that intelligently guide and securely connect workers for productivity, safety, and quality gains are becoming more common and are empowering manufacturers to transform their businesses, providing much-needed solutions in a volatile labor market.
Delivering personalized work instruction for every worker allows for continuous learning and career growth. This connected and augmented workforce, armed with new digital tools that are powered by individualized data-driven instructions and performance support can increase their skill sets. That will help close the skills gap between newer hires and their more senior cohorts. Using digital work instructions, quality manuals or SOPs to provide necessary visual aids and real-time contextual information is invaluable in guiding workers through complex tasks with the assistance of a computer, mobile or wearable device.
Combining these digital work instructions and AI-based connected worker platforms increases quality, reduces errors, and improves safety and efficiency. It also helps managers to better understand the utilization and efficiency of their workforce and identify opportunities for improvement. By reducing on-boarding time and improving training effectiveness, these technological advancements offset the need to hire skilled workers, enabling manufacturers to move to proficiency faster.
AI enables manufacturers to understand better the work processes with the largest capturable productivity opportunities. As workers become more connected, companies have access to a new rich source of job activity, execution, and tribal data. Proper AI tools can gain insights into areas where the most considerable improvement opportunities exist. This enables continuous improvement (CI) teams to focus on the activities with the most significant ROI. With the advent of AI-based connected worker tools, companies can gather the high granularity data that is required to support CI initiatives.
Smart digitization of frontline processes is the only way to deliver operational excellence in the workforce disruption era. It’s critical to give workers the support and guidance that they need, at the moment of need, whether it’s immediate access to a digital troubleshooting guide or connecting virtually with a subject matter expert. That way, newer members of the workforce can capitalize on the digitized knowledge base and experience of more senior colleagues, even those who may no longer be a part of the team.
Chris Kuntz is vice president of strategic operations for Augmentir.
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