Labor Shortages in Manufacturing - How lloT and Smart Factory Analytics Can Help
Labor shortages are on the rise in every workplace but especially in manufacturing. Unemployment rates in both the US and Canada at the time of this article are quite low by historical standards. Manufacturers, and certain sectors of manufacturing, such as food manufacturing in particular, are already under pressure with respect to profit margins. Many manufacturers are finding it very difficult to attract workers at all much less skilled workers that can contribute from day one.
Employers are also starting to recognize that the workers of today who would find a manufacturing job attractive may not be of the same caliber that were available in the past. It’s particularly difficult when you also factor in the increased responsibilities that each worker may have when they are called upon to contribute to efforts beyond their experience such as various continuous improvement programs.
The term ‘labor shortages’ however seems an inadequate term for the near future of manufacturing employment.
“However, while most manufacturers may expect jobs to grow, they must contend with one of the tightest labor markets in recent history, including a situation where the number of open jobs exceeds the number of people looking for work. 4 For manufacturers, filling open jobs has been an ongoing challenge in recent years, but the current conditions are reaching serious levels.”
Even claiming ‘serious levels’ may in turn be an understatement.
Further from their report:
“Based on our analysis, Deloitte’s economic team created a baseline projection that assumes that by 2028, US manufacturing employment will grow at an average rate of 1.5 percent per year. This implies that as a baseline, the industry would need to employ approximately 1.96 million additional workers between 2017 and 2028 to produce the goods the growing economy could demand. However, the lack of skills identified by manufacturing industry executives and impending retirements suggest the industry could experience employment bottlenecks, leading to a potential 2.4 million jobs going unfilled, with the risk of limiting production below these projections.
By 2028, in the base case, additional manufacturing value added of US$454 billion could be at risk if qualified workers cannot be found to fill the open jobs, which could account for about 17 percent of the total US forecasted manufacturing.”
Image Courtesy Deloitte Consulting and the Manufacturing Institute
Over the period analyzed, the US manufacturing industry could see growth limited by as much as 17% of its potential due to skilled labor shortages. This isn't a shortage, it's a looming crisis.
The result of projections like these is that companies are in need of solutions that will ease the burden from fewer skilled workers, or even workers at all, being available, while remaining competitive. IIoT technologies can be part of the answer, with a compelling case to be made that select IIoT implementations can address labor shortages as well as improve manufacturing businesses in other ways.
Companies that are pioneering IIoT implementations such as Smart Factory Analytics solutions to reduce downtime or increase productivity are finding positive impacts related to labor management as well.
IIoT and Smart Factory Analytics technologies can provide the following competitive advantages for manufacturing businesses looking to overcome labor shortages:
Production Efficiencies - the simplest way to reduce dependence upon scarce labor resources is to reduce the need for labor to begin with. IIoT and Smart Factory Analytics implementations are proven in increasing the productivity of existing resources.
Unskilled Workers - directly connecting data gathering capabilities to production machinery reduces a burden on production staff to gather production data. It not only reduces time-consuming data gathering and data entry tasks, but improves completeness and accuracy of manufacturing data.
Customized Dashboards - newly hired workers may not be familiar with manufacturing process improvement programs, and may be confused or even be intimidated by requirements to report production upsets and downtime, to offer solutions to improve production outcomes, to troubleshoot equipment or to interpret information related to their job. Real-time machinery monitoring enables instantaneous notifications of downtime so that workers are not stranded with inoperable machinery any longer than necessary. Customized production dashboards can create simplicity and clarity for workers who are on the line (literally) for production results.
Predictive Maintenance - skilled maintenance roles can be amongst the most difficult to fill. Filling these roles can be even more difficult when these workers need to be continuously ‘on standby’ waiting for equipment failures to occur. No one likes their weekends, family time or vacations interrupted by a call in the middle of the night to bring a factory back online. Predictive maintenance capabilities reduce surprise equipment failures and decrease both dependence upon maintenance staff as well as turn-over among maintenance staff who ‘can’t take it anymore’.
These are just a few ways that IIoT technologies can help companies to combat existing labor shortages and prepare to deal with the even more dire labor shortages to come.
Interested in learning how IIoT and Smart Factory Analytics Technologies can help your manufacturing business to manage the existing labor shortage and the coming labor crisis? Book a Demo!