Workforce technology and training, industrial reshoring and preparing for Industry 5.0 will become hallmarks of manufacturing in 2021.
If we learned anything from 2020, it was to expect the unexpected—and it was a learning year for businesses across the board. Those that survived came out the other end looking much different than before—with new processes, procedures, and priorities in place. As we look to 2021, and eventually to a post-pandemic world, agility has become even more critical to a business’ survival. Current research from McKinsey suggests that “the reskilling challenge will be particularly acute in operationally intensive sectors, such as manufacturing, transportation, and retail, and operations-aligned occupations, such as maintenance, claim processing, and warehouse order picking.”
As one of the largest employers of essential workers, manufacturers need to ensure they prioritize the needs of their workforce in order to retain and develop talent and remain competitive. Being able to accommodate these needs in an agile manner through technology and training today will ultimately make organizations more resilient to the rapid change that will continue well into the future. At a high level, I’ve outlined three key areas for manufacturers to focus on in 2021.
#1: Manufacturing Workforce Training: More Pressure on the Talent Pool
Industry 4.0 technologies, such as digital twins and artificial intelligence, have the power to revolutionize the factory floor – but the workforce must continue to transform alongside production. The race to Industry 4.0 has accelerated exponentially during the pandemic, so going into 2021 workers need to upgrade their skills relative to STEM: automation processes, repair systems, artificial intelligence, robotics, data analytics, digital security, additive manufacturing and more. Now more than ever, manufacturers investing in digital transformation need to streamline the management of their workforce. It is essential that manufacturers gain access to real-time data to ensure operational efficiency and remain agile to meet the needs of both their future workforce and their business. The difference in manufacturing between a mechanic and an engineer is quickly becoming critical in acquiring and retaining talent for this new era of accelerated automation in a post-Covid world.
#2: Bring Manufacturing Operations Back Home
Although challenges in the manufacturing supply chain were being felt pre-pandemic, the effects of COVID-19 highlighted those issues. Driven by both self-preservation as well as complicated geo-political factors, many manufacturers are looking to move production back to the U.S. We need quick and easy access to the essential goods we’ve become dependent on due to the coronavirus (i.e. PPE, vaccines, which require eggs, pharmaceuticals, etc.), so the US will begin working toward building factories locally to ensure a steady and controlled supply. In June 2020 the U.S. International Development Finance Corporation and the Defense Department signed a joint memorandum of agreement “to spend $100 million of the department’s Coronavirus Aid, Relief and Economic Security Act money to subsidize federal loans to create, maintain, protect, expand and restore domestic industrial-based capabilities to support the national COVID-19 response.” Ultimately, reshoring has a positive effect on the economy by creating well-paying manufacturing jobs and providing people in lower-paying service and retail jobs an opportunity to become part of a more advanced, skilled workforce. I believe the momentum around reshoring will continue well into 2021.
#3: Preparing for the Advent of Industry 5.0
Industry 4.0 focuses on the interconnectedness of machines and systems in order to achieve optimum performance to improve efficiencies and productivity. Industry 5.0 is touted as taking it a step further and refining the interaction between humans and machines (source). From a staffing, training and reskilling standpoint manufacturers will need to be mindful of and continue to prepare for the rapidly-changing nature of how humans and technology interact. The fifth industrial revolution is being driven by continued progress in technologies that drive AI, machine learning, robotics, data and analytics. AI in particular, which enables one to mine for and then act upon data insights, could become a significant benefit for recruiters in terms of getting the right talent pool. Digitizing knowledge from AR/VR simulations, when it really takes off, will eventually find its place in the manufacturing environment and will become especially important in a future work from home scenario. While some organizations continue working toward achieving Industry 4.0, we need to prepare for the advent of Industry 5.0, too.
Over the course of 2020, the future of work that once waited for us on a distant horizon arrived almost without warning. Best practices and technology that could have taken years to implement were put in place within months, and there are many examples in manufacturing to point to.
Reflecting on the incredible changes and unforeseen challenges faced by the sector this past year, it’s evident that businesses relying on outdated approaches to workforce management will not survive. Businesses that fail to embrace modern, intelligent technology will become irrelevant. The manufacturing sector’s fundamental ability to recruit, hire, and retain top talent depends on its ability to modernize quickly and with purpose.
Employment growth and workforce development will continue to be a top agenda item for manufacturers in 2021. Organizations that arm their employees with the right technologies, learning, and reskilling opportunities will be better equipped to weather accelerating through the pandemic and beyond.
About the Author
Adam Aguzzi is VP Manufacturing, Value Advisory at global human capital management software company Ceridian. Adam helps leaders transform their operations and strategies to make better decisions that drive business value. He has spent the last 15 years directing programs in manufacturing, aviation, maintenance, and mining. He holds a CPA and an MBA from the University of Toronto.
About Ceridian HCM Holding Inc.
Ceridian. Makes Work Life Better™.
Ceridian is a global human capital management software company. Dayforce, our flagship cloud HCM platform, provides human resources, payroll, benefits, workforce management, and talent management functionality. Our platform is used to optimize the management of the entire employee lifecycle, including attracting, engaging, paying, deploying, and developing people. Ceridian has solutions for organizations of all sizes.
Source: Ceridian HCM Holding Inc.