2. Taking Aim at Talent Churn, Manufacturers Prioritize the Worker Experience
It’s no secret that the manufacturing industry has a people problem.Deloitte predictsthat by 2030, 2.1 million manufacturing jobs could go unfilled, and aWorkdaysurvey found that nearly half of manufacturing leaders today are reporting worker turnover that’s higher than the historical average.
Adding pressure to this talent crunch is that factories hit a 14-year production high point in September 2022, according to theFederal Reserve. Chances for business growth exist, but 45% of manufacturers say they’ve had to turn down business opportunities due to a lack of workers,per Deloitte.
What’s going on here? For one, manufacturing companies are facing more heated competition for skilled workers from sectors such as energy, healthcare, and technology,Deloitte notes. Manufacturing workers are also themost likelyto leave for higher pay or a career change, making them ripe for being wooed away by competitors or other industries. And while the message around pay has been received—the manufacturing industry is among the most likely to have bumped up pay in the last two years—compensation isn’t the only sticking point for workers.
Workers across all sectors, and all ages, want more flexibility in their work lives. In manufacturing—an industry that often has a reputation for long, inconvenient work hours—that’s especially critical. Digital tools such as employee-first scheduling and optimization leverage AI to match workers’ qualifications, availability, and work preferences to fill scheduling needs. These tools can help give employers more flexibility and convenience. Employers who use employee-first scheduling tools with their frontline workforce areless likelyto report higher-than-historical-average turnover, a boon for helping to keep soaring overtime costs under control.
The manufacturing industry is also facing a career perception problem. Fifty-eight percent of respondents in aDeloitte surveyfeel manufacturing jobs have limited career prospects. In response, human resources (HR) leaders at Swiss-based medical supply company Alcon are exploring how AI- and ML-backed automation tools can help them identify their workers’ skills and capabilities to help them “build their career journey,” said Dina Protomastro, Alcon’s vice president and head of global HR operations, atWorkday Risingin 2022.
Indeed, 80% of manufacturing workers said they might be interested in roles with enhanced training and clear career paths. Unfortunately, just 18% of manufacturers have introduced formal learning and development programs to frontline workers in the past two years,Workday found. Those that have, though, are already seeing results in warding off high attrition and bolstering business prospects.
“We’re really focused on the philosophy that if we treat our employees well, if we give them a great employee experience, they, in turn, will give our customers a great experience, which is just naturally great for business,”saysGeneral Electric’s head of people operations.
3. Plan B Isn’t Enough—Manufacturers Devise a Multitude of Data-Driven Plans to Proactively Mitigate Risks
Risk management has always been a key ingredient in successful businesses. But in the years ahead, manufacturers’ ability to proactively mitigate risks will increasingly track digital transformation efforts.
“It’s no longer about planning for the unpredictable and having a Plan B,”said Peter Van Manen,前迈凯轮电子、董事总经理tWorkday Rising EMEAlast year. “You need to have a Plan D and the data to spot challenges, but also the opportunities.”
Creating accessible and usable data from many disparate sources is the key to driving a more efficient supply chain, identifying risk, and planning for what’s next. Making decisions becomes easier when manufacturers can see the big picture with a single source of data. Sharper insights into manufacturing supply and production chains can help manufacturers adapt to changing markets, product needs, customer demand, and sales channels by SKU, region, and channel—helping build local capacity and increasing redundancies in supply chains.
这种至关重要的能力是cl最快的路线ear: investing in advanced digital technologies. For example, nearly three-quarters of manufacturing executives say critical material shortages and supply chain disruptions will present the biggest uncertainty for their industry in 2023,Deloitte reports.
The efficiency benefits of going digital are becoming clearer and clearer—84% of manufacturing executives expect digital transformation to accelerate through 2030, aManufacturing Leadership Council surveyfound. At the same time, there’s clearly room for improvement—more than80% of respondents in a recentGartner studysay their organizations have insufficient supply chain visibility.
For some in the industry, mergers and acquisition (M&A) activity will serve as a workaround for shoring up supply chain weaknesses. More than half of manufacturing chief executives report a healthy appetite for M&A that will significantly impact their companies,KPMG reports. Along with strengthening supply chains, M&A remains an important way for manufacturers to reinforce core operations, divest of higher-risk assets, and accelerate growth.
“The economic environment is a bit less predictable than before because of rising interest rates and the possibility of an economic slowdown, but M&A is an important way to rationalize the portfolio and shift toward higher growth opportunities,”says Claudia Saran, national sector leader for industrial manufacturing at KPMG U.S.
Simply making M&A moves, however, isn’t enough. Manufacturing leaders with a true leg-up on the competition will be those who ensure a smooth integration through the use of cloud-based systems that offer full visibility into combined workforces. A report byWorkday and MGI Researchfound that organizations with the most successful M&A stories are those that improve cross-functional alignment.
Regardless of whether M&A activity is on the table, manufacturers will need to prioritize integrated cloud-based systems that supportcontinuous planning. Disruptive economic and societal changes are simply happening too quickly to maintain static planning processes. Access to real-time data helps produce rolling forecasts, gets everyone in the organization involved in planning, and enables the use of multiple scenario planning to view the impacts of different models across your business.