November 27, 2020
November 27, 2020
Contributor: Rama Ramaswami
Managing people emerges as the new imperative for factory managers once focused on maximizing capacity utilization for physical assets.
COVID-19 has prompted smart manufacturers to rethink their long-term factory designs and refocus on people. This means giving more attention to the skills and knowledge employees need, required workplace safety measures and options for leveraging new workforce models to utilize, for example, contingent and remote workers.
"Just as physical assets depreciate,so do workforce skills and knowledge,” says Simon Jacobson, VP Analyst, Gartner. “Labor is the new constraint and needs attention. Manufacturers that continue to rely on tacit know-how and do not invest in knowledge management and transference will struggle with capacity utilization."
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Supply chain leaders responsible for the strategy and performance of manufacturing operations need new labor-management strategies that account for three imperatives in particular.
From assembly lines to break rooms, the effects of social distancing are already apparent in many factories. Requirements for new staffing, frequent line balancing and changing work layouts have disrupted long-term investments in designs for productivity at line or unit levels.
Complying with social distancing requirements calls for changes that are neither cheap nor fast — and don’t discount the impact those changes will have on employees. Some can be a big adjustment for workers, such as having to adapt to new physical barriers without compromising productivity.
The key is to focus on the collaboration and communication components of your social distancing strategy. Start by filling communications gaps between team members with simple visual cues such as signs, charts or status-alert systems like andons.
Most important, don’t attempt a total overhaul right away. Instead:
Although hourly workers are needed on-site for specialist tasks and essential services, Gartner predicts that by 2024, 50% of factory work will be done remotely. Virtual teams will be a reality.
As manufacturers move to more virtual environments, supply chain leaders will need to ensure the right mix of on- and off-site labor. Successful organizations will be those that can eliminate the “If you’re not on-site, you’re not adding value” ethos from their culture.
Several manufacturers have already begun to reap the benefits of virtualization. For example, one consumer products company is remotely executing final acceptances for the testing and commissioning of new equipment. A multinational telecommunications company used virtual reality (VR) to train associates on different continents and bring a new smart factory online.
Be strategic and deliberate when creating a more virtual environment:
A flexible workforce is key to a manufacturer’s ability to remain resilient. COVID-19 laid the challenges bare as supply chain leaders worked to juggle permanent and contingent workforces and stagger shifts to keep factories up and running.
“That’s just the tip of the proverbial iceberg,” says Jacobson. “Balancing labor supply and demand for an expanding and contracting workforce affects the ways in which roles and skills are configured. It’s a profound change to how manufacturers manage factory-level talent.”
Staffing plans will now need to accommodate new skills requirements and take into account variable staffing levels of internal employees and contingent workers. As a result, talent searches for higher-salaried jobs, such as data scientists, might be deprioritized, while searches for gig workers with needed operational knowledge are accelerated.
You don’t have to go it alone. Partner closely with HR to understand and implement new ways of managing talent:
Leverage your relationships with long-term partners such as labor unions, universities, technical training centers and industry organizations for access to talent with operational know-how — and to lower the cost of onboarding new factory workers.
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Recommended resources for Gartner clients*:
Optimizing Production Post-COVID-19 Swings the Pendulum From Managing Things to People
*Note that some documents may not be available to all Gartner clients.