There has been a lot of press lately about Industry 4.0. According to the experts, we are in the midst of the next wave of the industrial revolution, where automation and data exchange are bringing an even more connected factory closer to its suppliers and customers. Information visibility will allow executives to react more quickly to changes and trends in their supply chain and the marketplace. Unfortunately, there is one key component of the modern organization that is often overlooked – the workforce. There is plenty of discussion on skills, or lack of skills, needed to complete the transformation; but there is little discussion on how this revolution is going to affect the individuals who will be doing the day-to-day work.
What is Industry 4.0? It is the name of a trend coined five years ago during a McKinsey Consulting roundtable. It is the current trend of automation and data exchange in manufacturing technologies. Supply chain executives have already seen it in some of the warehouse management technologies used today. Companies that embrace the philosophy and can make it work will outpace the competition. Just as in the previous three revolutions, those companies that did not change were quickly left in the dust. Imagine lumber mills during the first industrial revolution that avoided steam power, choosing instead to rely on the tradition of hand-driven saws and axes. Those companies could not compete, and they did not last.
So how did these transitions affect the workforce? Each revolution has increased individual worker productivity while simultaneously changing the overall skill mix of the workforce. The first revolution introduced steam mechanics and required technicians to service these new machines. As we moved to assembly lines, maintenance techs became even more valuable. The third revolution of automation added a whole new industry of computer programmers to support the change. We expect the need for even more advanced skills, such as technicians and robotic repair mechanics, as we take the next step into Industry 4.0.
On the macro scale, two significant changes are happening with each advance. The first is the overall increase in productivity. Factories that once needed hundreds or even thousands of workers in the 1800’s are now staffed with one-tenth of that number. The second change we see is the skill mix of the workforce. Starting with the first industrial revolution and accelerated by Henry Ford’s assembly lines, unskilled workers began to dominate workforces. This was much different from the old guild production halls where tasks were performed by very skill-specific labor. Hence, the beginning of the industrial movement opened production to armies of unskilled workers who could make products more quickly than those who had trained for years under an apprentice-to-master program. Even today, production workers can start working on the line after some minimal amount of training.
Starting with the increase in automation and moving into Industry 4.0, the percentage of workers needing advanced training rebounded and is growing. Employees requiring advanced skills include mechanics, electricians, and computer programmers. This is the Industry 4.0 skill gap that has so many executives concerned about where to find their workforce of the future.
While the skill gap is a real concern and has received a significant amount of press, very little has been said on how the next generation of workforces (skilled and non-skilled) is going to work together. Today, many support technician’s work during the off shifts (weekends and nights), because, often, production takes place during the traditional Monday through Friday workweek. For most people, working nights and weekends is seen as a significant drawback. Filling positions on the backshifts make it even harder to find skilled employees. Unsurprisingly, today’s workers are less willing to commit to nights and weekends, especially those skilled technicians and programmers who can more easily find a day job somewhere else.
What companies need to do is reconsider the scheduling possibilities from the employee point of view. What if we consider moving those events that require more of the higher skilled technicians away from the back shifts and move them to the standard Monday through Friday workweek? Doesn’t it make sense that the problematic and non-standard evolutions such as upgrades, and equipment maintenance, should happen when the management team is also working at the plant? If we can genuinely increase automation, then maybe the plant can run on nights and weekends with a skeleton crew, allowing the skilled workers to have weekends off – effectively creating an incentive for skilled labor to work at organizations doing this. According to Joe Freud, a career operations executive and past client of CCG, “Giving the workforce a schedule that is outside of the current traditional box is a great way to build a new bridge of trust, and it will reduce turnover and overtime while improving performance. Intersecting the points of a great place to work with the introduction of 4.0 can result in a revolution that few even think about.”
This solution will not work for every organization. In fact, it may not work at all. However, the concept is important because it illustrates how executives need to rethink how 4.0 will affect their employees. It is essential that future plants consider not just how machines and systems will be tied together, but also how to operate them and how to staff employees. We are not yet ready for the plant with zero workers.
Imagine the perfect plant on paper…the flexible, low-cost producer, ready to knock out the competition. However, there is a hiccup in the line, and you need to change a drum or reconnect a wire. Now imagine the plant manager having to halt production for repair, and how long that ideal plant may have to wait if the right repair skills are not readily available. Also, what if the people with the startup skills are not there to start production until the following day; or worse, several days later. Production delays caused by people shortages could make the same exact low-cost producer a high-cost slug.
Organizational business needs are going to change with Industry 4.0, and they need to be reviewed based on the unique needs of the facility in question. Just as crucial to its success is determining the desires of employees. We need to consider how work will fit in with family and the social demands of today’s workforce. Matching up business demands with workforce desires is the key to building the right schedule. Having the right schedule may mean that the plants of the next revolution will have engaged employees ready to run them. In the end, the skills gap is looming for everyone. Those companies with the right schedules can better attract both skilled and unskilled employees. Also, those companies that can better attract employees will be the ones that will thrive in Industry 4.0.
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