Why manufacturers must take their existing workforce with them as they advance to Industry 4.0

11 September 2018

As manufacturers digitise their value chains from supplier to customer – a transformation widely termed “Industry 4.0 – they’re undertaking fundamental shifts in how and where they operate and transforming what it is they offer their customers in the process. These changes are driven partly by technology and partly by shifts in customer demand. But there’s no question that most attention is currently on the adoption and implementation of the technologies that are enabling Industry 4.0: the Internet of Things (IoT), artificial intelligence (AI), 3D printing, robotic process automation (RPA), and more.

Embracing Industry 4.0 is vital to the future of UK manufacturing. But it’s equally important for companies to recognise that these enabling technologies only answer the “how?” of Industry 4.0 – leaving many other questions unsolved.

What questions? Well, implementing digital operations brings diverse and profound impacts for any manufacturing business. Some of these are tangible and easily measurable, like the effects on costs and supply chain. But others are less immediately obvious, such as the wider impacts on people, skills and organisational culture. Only by bringing together business understanding with technology innovation and human insight – “Intelligent Digital” – can manufacturers reap the full benefits from their investments.

It can be too easy to overlook the human insights piece of the equation. I’m seeing manufacturers press ahead with automation, eagerly targeting benefits such as higher efficiency and more competitive pricing. But have they considered whether their employees will find these changes unsettling and threatening?

Technology is sometimes the easy bit: you can go out and buy a robot tomorrow. But in bringing this shiny new technology into the business, you have to think more widely to reap the full benefits it has to offer. There’s no point having a robot that drives efficiency in one area if its  presence makes long-standing employees in other areas fear for their future relevance and jobs resulting in a loss of productivity in other areas which is greater than the gain made through the investment.

This means manufacturers adopting Industry 4.0 technologies also need to consider what additional investments are needed in transforming the wider organisation to get the most from automation. And I’m talking here about the existing workforce of loyal employees who may have been with the firm for decades.

Sometimes businesses take the view that doing new things requires them to recruit a new generation of workers with new (mainly digital) skills. But this approach risks demotivating the current workforce – something any company does at its peril. While a combination of new technology and infusion of “digital native” employees might make processes faster and cheaper, a company that achieves this at the expense of alienating and disenfranchising its existing employees could lose all the productivity gains it was seeking.

So, what to do? The answer lies in taking your workforce with you on your journey to digitisation and automation. Which means demonstrating to loyal teams the opportunity it brings them to develop and grow with the organisation by learning new skills, and then providing them with the means to seize that opportunity.

At root, it’s about showing people across the organisation the vision for where the business is heading, and the role they can play in turning that vision into reality. True, filling that role will mean learning new things. But it will keep their skills relevant and valuable, and probably make their jobs more interesting.

Faced with an influx of new technologies, a worker might assume they only have a couple of years to go to retirement. But retraining can extend that two additional years to ten – a decade in which they may  be more productive than at any previous point in their career. What’s more, they’ll be more likely than others to stay the course rather than jump ship elsewhere.

The benefits from realising the untapped potential of older workers apply not just for individual companies, but across the economy. A recent PwC research study – “The Golden Age Index” found that if the UK could increase the participation of over-55s in its workforce to the level achieved by New Zealand, this could add £180bn to UK GDP. The report also highlighted how AI can support longer working lives, producing social as well as economic benefits.

For manufacturers, the message is clear. Investing in innovative technologies is vital – but to get the full benefits, this must be accompanied by considering what other organisational changes are needed whether it be culture or investments in skills, including retraining. Only this combination will ensure that productivity gains – which the Engineering Employers Federation says are cited by 84% of UK manufacturers as the top priority for the UK’s industrial strategy – are not undermined by damage to workforce engagement and morale.

To close, here are a couple of questions to ponder. Have the 50-something employees in your business applied for retraining in digital automation? If not, could it be because nobody’s offered it? Ask them – and you may well find you’re pushing against an open door.

Cara Haffey  |  UK Manufacturing and Automotive Lead
Email  |  +44) (0) 7809 551 517  

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