There’s no question about it: Today’s manufacturers are being hit particularly hard with workforce challenges, many of which stem from an ongoing manufacturing labor shortage.

As a wave of experienced experts are retiring, a new workforce is entering the scene — one that is more tech-savvy (and prone to stay at jobs for a shorter period of time).

Meanwhile, the way people work is changing. As digital transformation initiatives and an increasingly hybrid work environment become the norm, organizations must be agile and willing to adapt in order to remain competitive.

Workplace expectations have changed, and manufacturers need to change, as well.

The Current State of the Global Manufacturing Labor Shortage — and Ongoing Workforce Challenges

The manufacturing industry faces a variety of hiring challenges today, the most pressing of which is the competition for talent. According to the U.S. Bureau of Labor Statistics, the manufacturing unemployment rate hit a historic low of 1.8% in December 2022. These conditions have introduced a shift in power: Workers have the upper hand as manufacturers have to compete with each other (and in some cases, other industries) to attract and retain the top talent.

2. Digital Architectures Will Be Built on Open Ecosystems

The shift towards open, interoperable digital architectures marks a significant departure from the era of proprietary, closed systems that once dominated the manufacturing industry. The move to open ecosystems is driven by the need for flexibility, scalability, and the ability to integrate best-in-class solutions from various vendors.

The foundation of these ecosystems are open protocols like REST and MQTT, whose ubiquity ensures interoperability and significantly streamlines the process of integrating new components into your solution. This also decreases the risk of vendor lock-in, since existing components can be readily replaced with any alternative that supports the open protocols.

Infographic showing the architecture of an open ecosystem, with a variety of machines, equipment, and enterprise systems all connecting to a frontline operations platform through open protocols.

3. Generative AI Will Empower Workers to Do Their Jobs Better

In the context of your manufacturing operations, the choice of whether to go with an open or closed platform fundamentally shapes what your digital transformation journey will look like. The architecture on which you choose to build your tech stack fundamentally affects how agile, resilient, and future-proof your operations can be.

Addressing the requirements for digital transformation

Skilled workers who know the ins and outs of the industry are retiring — leaving knowledge and process gaps. At the same time, high turnover rates and shorter job tenures are becoming the norm. According to the U.S. Bureau of Labor Statistics, “the median tenure of workers ages 55 to 64 (9.8 years) was more than three times that of workers ages 25 to 34 years (2.8 years)” in 2022.

These conditions introduce a cycle in which manufacturers constantly have to recruit and train new talent. By leveraging digital augmentation, organizations can begin to break this cycle.

The Need to Shift From a Process-Centric to Human-Centric Approach

In light of the ongoing manufacturing labor shortage and increasingly competitive talent landscape, driving and maintaining worker engagement is critical to your long-term success. By shifting from a process-centric to human-centric approach to manufacturing, you can leverage digital tools to augment workers’ capabilities, empower informed decision-making, and continuously improve the worker experience.

Start by considering the types of conditions and opportunities different workers within your organization seek. For instance, you may want to evaluate the needs of salaried workers versus hourly workers.

Salaried workers often want to be able to take things to the next level. They want to be able to innovate and drive creative solutions to potential issues, implement changes quickly, and embrace digital tools to scale up across factories.

Meanwhile, hourly workers often want to be able to provide business value. They want to know the expectations for the job they are assigned, understand how success is defined, and have reward structures that highlight the value of their work. These workers may also want to be able to rotate through jobs via a flex workforce approach.

Process engineer building a Tulip app in the app editor.

Securing and managing open systems

Once you understand the type of environment your team seeks, you can begin to identify opportunities to improve worker engagement. Start by evaluating your shop floor operations as they stand today. Consider the following questions when it comes to targets, feedback loops, and recognition:

  • If you go out to speak to a worker on the shop floor, do you think they’ll know their goals for the day?

  • When was the last time a worker’s feedback was implemented? How long did it take to implement?

  • Do you have a way to recognize employees who make process improvements?

By answering these questions, you’ll be able to identify ways in which you can leverage modern tools and technologies to adapt processes so that workers feel informed and engaged on a day-to-day basis. Ultimately, this type of environment will have a positive impact on both your employee retention rate and your bottom line.

Turning Your Workforce into Your Competitive Advantage

Read our ebook for insights on how a shift from a process-centric to a human-centric mindset can help you solve your most pressing operational challenges.

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