The 4Cs: Strategies for managing employee shortages in manufacturing and transportation
This post was sponsored by AT&T Business, but the opinions are my own and don’t necessarily represent positions or strategies of AT&T Business.
I packed in 46,000 steps in 3 days at the recent Hannover Messe USA and International Manufacturing Technology Show. That’s 23 miles walking in the shoes of smart manufacturers, many of whom are facing a common problem: managing employee shortages.
Then, at the AT&T Business exhibition booth, AT&T Business Channel Manager Allicen Lottes handed me a pair of virtual reality glasses. Suddenly, I saw the future.
While streams from the 90,000 attendees passed me by, their voices filling every bit of air space, I tracked inventory without bending over or lifting a thing. I “picked up” heavy boxes and set them down. For small to large industrial companies that have traditionally relied on physical dexterity, wearable tech changes everything.
Imagine: kitting would be effortless. Operators could see step-by-step instructions while their hands were busy wiring, soldering or assembling something, or even if their hands didn’t work at all. Wearable tech is but one of many innovations paring down production time, operations costs, downtime, error rates, and labor requirements.
Solving the labor shortage in manufacturing and transportation
The smart factory is much more than the evolution of industry. Digital transformation provides strategies for managing employee shortages which, according to Deloitte and The Manufacturing Institute, the workforce development and education arm of the National Association of Manufacturers (NAM), is in a perilous state: 2.1 million manufacturing jobs will go unfilled by 20301. The skills gap, according to NAM, is costly: $1 trillion.
We’ve talked about labor shortages for decades. When shop classes were replaced by computer courses in high schools across the country during the 1960s, the “college-first” button was pressed. What was the path for trades? How would young people know manufacturing provided good-paying jobs?
The encouraging news on this front is that manufacturing is in the news almost daily. The U.S. Department of Labor found there were nearly 3,000 new apprenticeship programs in 2021 and a nearly 64% growth in new apprentices since 20122.
But products alone do not tell the whole story. They must get from the manufacturer and into the hands of their users. This means that the supply chain, from end-to-end, and the workers, drivers, and teams that make it possible have to be considered as well. Transportation management is an inherent part of supply chain. Currently, there are approximately 78,000 unfiled driver jobs3. Technology can be a gamechanger in achieving more efficiency to better manage this shortage, and having visibility into where your products are, the condition of cargo, and when it has reached its destination.
Real growth happens at the crossroad of humanity and technology. What comes first? Humanity. Here are the 4Cs to managing the labor shortage and achieving greater success in your operations.
4 Cs to managing labor shortage
Creating a culture of learning, innovation, and collaboration gives people reasons to stay. According to Statista, millennials comprise 21.75% of the population. Gallup calls them the “job-hopping” generation. This is true of workers in manufacturing, transportation, and industries across the board. Culture matters to this group. At companies where managers show sincere interest in millennials as people, the organizations see an 8x improvement in agility, and a 7x increase in innovation. When millennials believe their company has a high-trust culture, they are 22x more likely to stay for a longer time.
Part of the culture is gratitude, which might be expressed in terms of salary, flexible scheduling, and perks and benefits like mental health and behavioral health benefits. This is more than Jerry Maguire’s “show me the money.”
Culture begins long before a new hire walks in the door. Focus on improving the recruiting process and onboarding process. In my opinion, giving candidates a smart manufacturer tour or a field day working on the factory floor would create a culture of collaboration and appreciation. Fleet managers for transportation and logistics companies are using technology to recruit and retain drivers by making their job easier. Tools like IoT improve driver safety, improve communications and minimizes paperwork.
Of course, it all starts at the top. CEO walkthroughs throughout the plant, all-hands meetings, employee community, newsletters, and special events, and prioritizing both employee and driver safety connect people with a company’s mission, vision, and values.
In manufacturing, digital acceleration is a vital part of the new world of work. There is, however, a psychological impact. The fear of losing jobs and making big leap changes are concerns. As humans, we resist change and look for safety in what we know. Show the benefits of technology and how it will free people up to focus on what they do best with tasks that require more human interactions. Crystalize and communicate your vision while upskilling the workforce to drive longer-term success.
It’s important to solicit employee feedback through pulse surveys, lunch-and-learns, business communication tools, and one-on-one meetings so the voice of your team is part of your communication efforts. Why does this matter? One, it’s the right thing to do. Second, 75% of the workforce will be millennials by 2025 while 12% of the workforce is currently Generation Z – and growing at jet speed. These digital natives don’t know anything low-tech. We need to change our assumptions about work and manufacturing and the best way to do that is by understanding the people we want to attract.
Lastly, talk to team members. Get to know them as a person. Emails are fast, but nothing replaces face-to-face relationship building.
Capacity hits at the heart of labor shortages. Technology enables people to do more with less. For example, prescheduled maintenance is a common practice among manufacturers. In the smart factory, artificial intelligence (AI) can provide maintenance alerts to operators, creating more uptime and even improving the health and safety of workers.
I had a chance to speak with AT&T VP of Manufacturing, Andy Hazard, at IMTS. She’s responsible for a $3 billion profit-and-loss sector. I asked her what she was most excited about in manufacturing. She talked about labor shortages and how automation and autonomous factories are helping to create greater efficiency, plus security, which, in her words, is how IT and OT convergence will succeed.
When we talk about capacity in manufacturing, we talk about being creative with a robust reskilling program, splitting roles into two jobs, and blue-collar shifting to smart collar as people learn about technology. Capacity in the transportation industry often is measured in time. Here, data from IoT devices helps to shorten delivery times to customers and right size your fleet to help do more with less.
The final C stands for connectivity (although convergence would be a good second best!). This is where we optimize operation time (OT) so people on the factory floor see things in real time. AT&T is providing enterprise-grade 5G technology, which uses millimeter wave spectrum to create unprecedented speed, low latency, and bandwidth capacity. That enables manufacturers to do more with the mega expansion of the Internet of Things (IoT), as well as collect more data, and compute more information faster so that leaders can make better business decisions near real-time. IoT can also help transportation companies to better monitor cargo to prevent damage and spoilage, monitor and teach driver safety, and imrpvoe routing efficiency.
AT&T collaborates with Lockheed Martin and other manufacturers. These relationships are good examples of how 5G impacts the smart factory. I spoke with AT&T AVP Jason Inskeep on my CXO Spice show4. He shared that 5G is a transformative, faster speed, low latency inband network which Lockheed Martin used to download data from a helicopter into multi-access edge computing (MEC), a hybrid cellular solution. This same flat, horizontal topology works from Delivery on Demand (DOD) to factory or from DOD to warehouse. He also talked about the 6-way match process, which provides a practical decision process for manufacturers who want to optimize spectrum more affordably. To his point, if you have 50 sites, 5G connectivity provides applicability to as many use cases as possible. As he said, it’s not just what’s here today, but what direction we are going so people can do more.
The big role connectivity plays in the transportation industry also includes helping to monitor remote assets like fleet vehicles or other assets assigned to different job sites whether they’re stationary or on the move. In addition, connectivity is essential to meet regulatory standards that not only improve safety but helps the company reduce fines from non-compliance.
No matter then industry, convergence allows seamless systems to work together in the best way possible to maximize capacity, maximize control and maximize the time horizon from a network perspective.
It all comes back to people
I consider the factory floor before I put on the augmented reality (AR) glasses. Previously, you needed people with the physical strength to move boxes and the acute eyesight to look at a manual or laptop while threading thin wires. With technology, more people can do this type of repeatable work, safely. What does this mean for people with disabilities? How might this change people’s live? What impact will this have on manufacturing productivity and reshoring efforts?
Long after I gave my glasses back to Allicen, I realized we now have a new calling for reimagining the manufacturing workforce.
In the next 10-20 years, vast amounts of data and the power of analytics will transform manufacturing. Manufacturers will be smarter and more sustainable; connected and more autonomous. They will manage proactively and in real-time, producing more with the same resources and adjusting faster to market demands and conditions.
That’s why the four key strategies for managing employee shortages – capacity, culture, communication, and connectivity –help manufacturers meet production and scale. They help transportation companies operate more efficiently, improve safety, and protect loads. Shared knowledge becomes shared power.
I walked away from Hannover Messe with positivity, encouragement and excitement for manufacturing. New ways to solve the labor shortage problem and scaling at speed are right front of us. No rose-colored glasses here. Rather, we have a new lens by which to radically reframe people, planet, purpose and prosperity.
1 2.1 Million Manufacturing Jobs Could Go Unfilled by 2030. National Association of Manufacturers (May 2021): https://www.nam.org/2-1-million-manufacturing-jobs-could-go-unfilled-by-2030-13743/?stream=workforce
2 FY 2021 Data and Statistics, Apprenticeship Continues to Demonstrate Strong Growth. U.S. Department of Labor (2021): https://www.dol.gov/agencies/eta/apprenticeship/about/statistics/2021#:~:text=FY%202021%20Registered%20Apprenticeship%20Sponsors,established%20nationwide%20in%20FY%202021
3 Colin Campbell, Driver Shortage Eases Slightly in 2022 but Relief Likely Temporary, ATA Reports, Transport Dive, October 25, 2022, https://www.transportdive.com/news/truck-driver-shortage-eases-slightly-in-2022-chief-economist-Bob-Costello-ATA-MCE-2022/634854/#:~:text=The%20number%20of%20unfilled%20driver,are%20both%20projected%20to%20grow
4Helen Yu, CXO Spice_Connected Manufacturing [Episode 25], Sept 30, 2022, https://www.youtube.com/watch?v=mfDYu7Zewdo&t=2s.