A trend is just a trend until it hits the bottom line; then it becomes a crisis. When it comes to the massive workforce contraction threatening global industry, that collision is imminent. Its shockwaves will be felt in reduced productivity, profitability and safety unless companies act now to ramp up expertise, initiate culture change and adopt new technology for the road ahead.
The good news is that technology is available in the form of accessible and affordable processing power, connectivity, remote monitoring and data analysis capabilities that are enabling the Industrial Internet of Things.
Rockwell Automation is leading the charge to usher in this Connected Enterprise: the company’s overarching approach to networked connectivity that leverages the IIoT to empower a more efficient, engaged and secure industrial workforce.
And beyond the company’s technology platform, Rockwell Automation is collaborating with its customers, vendor partners, educators, consultants, integrators and communities to help industrial companies create leaner, more flexible and efficient operations and navigate the training, recruitment and cultural changes that need to occur.
In North America, the average age of skilled industrial workers is 56, and one-third of workers are over age 50. Skilled workers show a strong tendency to retire on schedule rather than extending their working years. By 2020, in just a few years, more than 115 million skilled workers will be nearing retirement, beginning a drain that will result in a shortfall of 875,000 skilled professionals in the coming decades, according to generally accepted estimates. And that’s just North America.
“This is far from just a U.S. problem,” said Steve Ludwig, program manager, safety, at Rockwell Automation, citing global workforce needs. “In China, the over-65 population will climb to 210 million and by 2050, retirees will make up one quarter of the population, eclipsing the entire population of the United States. In Latin America, the birth rate is plummeting, significantly shrinking the talent pool in these countries. In the European Union, governments are pushing to keep people in the workforce longer. This is a global problem. ”
At the same time, global GDP growth rate is expected to decline from 3.6 percent per year between 1964 and 2012, to 2.1 percent for the next 50 years. In a January 2015 article in Harvard Business Review, the director of McKinsey Global Institute, McKinsey‘s business and economics research arm, projected that it will require 80 percent higher productivity growth to offset the impact of declining labor availability.
“Obviously this is not a short-term regional problem,” Ludwig said. “It’s an issue that many companies are dealing with today and will have to deal with for the foreseeable future.”
A safety issue
Beyond productivity threats, this transformation also heralds safety risks: “When large numbers of experienced workers are replaced by far fewer young, inexperienced workers—who have to do more with less—safety becomes a serious concern,” Ludwig said.
“Younger and less experienced workers are more frequently injured and tend to have more acute, serious injuries,” said Ludwig. “Several studies show that younger workers—under age 25, and in particular those with less than one year on the job—have much higher injury rates. This is generally attributed to inexperience, cognitive and developmental characteristics, hesitance to ask questions, misjudging risks and failure to recognize workplace dangers. They don’t have the experience to understand the hazards that older workers do. They tend to take more risks, resulting in more injuries.”
Ludwig said efficiency is the key to increasing both productivity and safety. But this efficiency has to be smart. For companies that wait for the trend to become a crisis in their plants, “efficiency” will mean squeezing workers to do more within their existing frameworks. This is a recipe for disaster on both fronts, Ludwig said.
The way forward is The Connected Enterprise, Ludwig proposed, in which workers have the technology they need to do their jobs smartly and safely, with the benefit of receiving on-demand information needed to operate from a predictive, safe standpoint rather than running around reacting to machine failures.
Ludwig said this connectivity allows companies to focus on the following priorities to pave the way for increased productivity and safety:
- Reduce job complexity through worker-specific instructions and information.
- Ease information access through mobile access that’s convenient and readily available.
- Reduce travel demands to improve availability of your most knowledgeable, in-demand employees.
- Improve labor utilization to do more with existing employees.
- Improve safety by conducting a thorough analysis of safety shutdowns, location and status.
“Building a Connected Enterprise is important to both the productivity and the safety issue,” Ludwig said. “It will be more critical than ever to understand what’s happening in your machinery, plant and enterprise. Having readily available information reduces job complexity and improves efficiency. Understanding where safety shutdowns are taking place—by geography, by machine type, by line—can help you understand operator and machinery issues and take action to address them. Remote access can reduce travel demands on employees and reduce mean time to repair, improving productivity.”
Education and community
The technology is there, but success requires more than just technology, according to Patrick Murray, director, market development, services & solutions, Rockwell Automation.
On the training and recruiting front, throughout the United States and other regions, programs supporting STEM education (science, technology, engineering, math) are preparing the next generation of engineers; and smart industrial companies are reaching out to their communities to educate students, and even parents, that today’s manufacturing industry is not your grandfather’s.
“If you’re not working with your communities to identify and recruit the best and brightest, I highly recommend you start doing it,” Murray said. “Manufacturing is not a natural field for young people to see as exciting. Most of them, and their parents, still see manufacturing as dirty work. It’s up to us to show them that this is a dynamic, high-tech field where they can be fulfilled and enjoy a good standard of living.”
But the main challenge, Murray said, is helping companies adopt the cultural change that needs to occur to align business goals and strategies, help existing workers adapt to new skill requirements, and create welcoming and fulfilling work environments for new workers. To that end Rockwell Automation offers its expertise to help companies assess their workforce needs and chart the way forward. The company also can refer consultants who are specialists in culture change.