I am the Managing Director of Arvense Group, a firm that helps engineering and manufacturing companies become more competitive.
American manufacturing companies will continue to face labor shortages for the foreseeable future. Despite increasing wages, providing more flexibility and improving working conditions, the problem persists. When we look into the future, competition for labor with other industries, planned retirements and reshoring efforts are expected to widen the gap between labor supply and demand.
Throughout history, business leaders have proven their ability to find and implement innovative solutions to resolve big problems. Often the adoption rate of this innovation is slow at first but accelerates quickly as the level of need increases. We are at this inflection point now for Industry 4.0. Many aspects of the solution set are proven in the operational environment and the associated costs are economically viable.
To meet an increasing customer demand with limited labor availability we must consume fewer labor hours for each unit produced and do so in a repeatable manner. I find many manufacturing companies, especially those that have grown organically over long periods of time, have significant opportunities to rethink their approach to creating value. Below are four ways to create more value with fewer people.
1. Lay the groundwork for machine learning and artificial intelligence.
Over time, team members build knowledge and expertise that enables them to make complex decisions as if it were second nature. In an environment where the workforce is stable and has a long tenure, we can rely on these individuals to effectively run complex operations. However, when turnover is high and skills are limited, we need to invest more heavily in building the capability for machine learning. Where possible, focus on setting up a closed-loop system to measure process output parameters and adjust inputs to meet specified requirements.
2. Implement real-time data visualization tools.
Far too often, team members are flying blind and don’t have the metrics readily available to know if they are progressing according to the plan. Build a system that provides regular feedback and visualizes team performance in a way that clearly shows if the current approach is meeting expectations. Focus on making this information available on any device so team members can conveniently be connected to real-time data.
3. Increase the level of automation on the factory floor.
In many cases, full robotics might not be the right decision for a variety of reasons. Analyze the potential for cobots (collaborative robots) or lightweight automation solutions to reduce the amount of effort required by the team member. This approach has a dual benefit: It can reduce labor time and it can broaden the workforce able to perform the work.
4. Invest in automated warehouse management.
Material movement through factories is a necessary function. For years, lean efforts have targeted reducing the waste associated with moving these materials. Keep building on these efforts and look for ways to standardize the part flow and delivery lanes. Taking these steps will enable automated material handling solutions to reduce the amount of manual transportation within the factory. This action will free up labor, reduce the chances of material being placed in non-designated areas and decrease time spent searching for misplaced inventory.
Labor is in short supply. Fortunately, there are innovative, proven solutions out there to help secure the future of your enterprise. These solutions do require a different approach and learning a new skill set. However, investing the time and resources to implement new technologies can really move the needle for your manufacturing organization.
Companies that get a jump on this trend will be able to capture the knowledge base and expertise of their long-term employees before they retire. This is immensely beneficial for machine learning. As the labor shortage is projected to worsen, leadership teams that act right now will face fewer disruptions, enabling them to remain competitive in this dynamic market.