Skills Gap is Reality for Adaptive Manufacturing

Aug. 5, 2008
These Over-50 Operators and Engineers Are the Human Computers of Operations and the Only Thing Standing Between Profit and Loss

Read Charlie Gifford's blog... Hitchhiking Through Manufacturing

By Charlie Gifford, 21st Century Manufacturing Solutions LLC

When I was studying engineering and co-oping as an engineer with the U.S. Navy throughout the 1980s, there were many apprentice programs throughout manufacturing. I had many incredible senior engineers and tradesmen mentoring me through my 20s and 30s. I consider myself very lucky. With over 5 million manufacturing jobs now out-sourced overseas for good, bad and ugly business reasons, we find the remaining North American and European manufacturing plants skeletonized to the tune of a quarterly balance sheet and bonuses based on cost reduction.

Most manufacturing companies now have little or no actual production knowledge in-house. The workforces in most of the plants I visit have an average age of 50+, and these companies have no real long-term plans to invest in the next generation. Training programs are the first items cut to meet quarterly goals.

The financial executives now running North American manufacturing keep one eye firmly fixed on Sarbanes Oxley regulations. They build rigid accounting metrics that make financials more accurate, but they should be constructing them based on the operations parameters of each manufacturing environment.

Today’s executive management seems to believe that running a manufacturing company does not require manufacturing know-how. Organized training and mentoring is required, but that costs money, and executives do not understand the cascading cost dimensions of using inexperienced low-cost, revolving resources.

Many factors are in play here. 

  1. Current production numbers are reached only because these over-50 operators and process engineers are the human computers of operations. They know how to respond to most of the “normal” abnormal events and alarm conditions to minimize their damaging, usually cascading effects. They’re the only thing between profitability and loss. Many of these abnormal events escalate into unsafe plant conditions. Some of this exception workflow knowledge can be captured in manufacturing operations systems for quality, maintenance and tracking operations. However, the situational knowledge requires at least three years of training. I predict that in five years, as the current workforce retires, the number of safety-related accidents will go up and production numbers will drop.
  2. Production numbers have already been affected by a random lack of specialized resources during “normal” abnormals because the current workforce has accumulated a high number of annual vacation and sick days. I’ve worked in a number of plants where on nice summer days, up to 20% of the workforce calls in sick or takes vacation. This causes large increases in work-in-process, “normal” abnormal exceptions, unplanned downtime and slower response times of quality, maintenance and engineering. These are real costs that should justify the training and mentoring business investments to the executive. However, when I’ve discussed this with the current executive force, with some exceptions, most don’t even want to spend the $50,000 to $100,000 to identify the waste, its costs and possible solutions. Six Sigma and Lean are just buzzwords for cost cutting to this group.
  3. Global demand requires plants to change from a make-to-stock, low-SKU-count product mix to a partial make-to-order, high-SKU mix. Executives aren’t aware of what’s required to create this adaptive manufacturing environment. They don’t recognize that manufacturing and supply IT systems can’t enable this form of adaptive manufacturing without standardized information models, business processes, and supporting transactions for manufacturing operations management, business-to-machine and business-to-business communication. These standards are hard, if not impossible, to apply in their current state without much assistance from expert contractors. Currently, the only way to get a working knowledge of them is to have a manufacturing operations IT group assigned to working on these standards and actually participating in the discussions to formulate language and content. Active participation is the only way to bring a working knowledge back to a company’s system architecture. The skills gap standing in the way of developing the services-oriented architectures required for adaptive manufacturing is large. No vendor, systems integrator, consultant or contract employee or manufacturer can provide companies with all the systems, people and support programs necessary for 21st-Century adaptive manufacturing.

The current core of manufacturing executives lacks the ability to understand adaptive business models beyond the statistical models on their paper ledger sheets, which are one step up from the abacus. They were trained in paper-based, 20th-Century, make-to-stock plants that operated a linear continental supply chain. Their computer literacy is based only on software for phone, fax and word processing (glorified typewriter) devices.

Computer literacy for 21st-Century manufacturing means an understanding of business or production workflow applications, whose complexity requires highly skilled people, an organized knowledge base, and strong governance policies and programs. Most of the manufacturing executives I’ve worked directly with over the last 10 years view their ERP applications as nothing more than electronic paper ledgers, and think that optimizing business process or manufacturing operations should be just a couple of mouse clicks away—a classic mistake.

Adaptive manufacturing requires the current core of executives to retire. It’s time for the the current generation of 20-, 30- and 40-year-old engineers and business analysts to be the leaders.

They grew up using computers to enable their lives’ through basic communication, personal knowledge bases and workflow controls. When they bring their computer competency and techniques to manufacturing operations best practices, North American manufacturing will recover, and the lost manufacturing knowledge of the 20th Century will be reinvented the hard way, and applied in new adaptive forms.

Read Charlie Gifford's blog... Hitchhiking Through Manufacturing