Welcome back to Manufacturing Tomorrow's Workforce, the podcast that discusses today's workforce challenges in the U.S. manufacturing industry. Kicking off season three, the manufacturing industry is coming out of what could be argued as one of the most challenging years we've seen in quite a while.
In this episode, host Amanda Del Buono is joined by Deanna Nord, Principal of Nord Strategy Group, to discuss how the industry was impacted by 2020, and what 2021 has in store.
Transcript
Amanda: So, I kind of want to start out simply, everybody was challenged by 2020. And you're in touch with a large number of manufacturers. What were some of the challenges you heard manufacturers facing last year—March, April, May—and how did they overcome them?
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Deanna: Well, first, I think we're all familiar with some of the challenges, but many mentioned lack of raw materials, disrupted supply chain, so lack of supplies. Therefore their rising costs of materials and supplies. Or just, I guess, still not having some shutdowns, layoffs, and then just a constrained workforce with getting used to masks and all the procedures that were required for temperatures taken, more breaks, staggered work attendance, staggered lunch breaks, the workstations were definitely more spread out than before times. And in some cases, manufacturers moved to a different location to save money, save on taxes. And as far as talent, there were also restrictions where they wanted talent from outside the U.S. and could not bring them in.
So, there's many ways that they overcame those, just trying to find different supply chains, you know, they brought people back. A lot of the manufacturers I've talked to have slowly brought everyone back. So, they're finally back to at least a pretty full workforce. And they're just sort of in the routine now of all the procedures taken. There's still of course restrictions on talent from outside the U.S., but they are managing their costs in every area, and managing the precautions they need to take.
Amanda: So, now we're into 2021, based on what you're hearing what marks or maybe permanent changes has the pandemic, or the past year or so, left on the industry?
Deanna: Well, there's still a lack of materials and supplies. You've probably heard, in fact, President Biden talked about the need for more computer chips. I have a contact in the automotive industry, he is a supplier to the automotive industry. He can't supply what they need from him because of lack of raw materials, metal to be exact, and there is a dearth of computer chips that is expected to continue, and they are expected to be more expensive. That alone just the computer chips, for example, in the automotive industry has taken it has removed 3.4 million cars out of the first quarter built. So, just simple supply chain disruptions can have quite an impact.
There's still time delays and deliveries of supplies because, you know, customers want products in a normal timeframe, and the constraints on labor are still there. Since we're early in the vaccine rollout, the measures are still in place, and they try to perfect them even more. Just still maintaining social distancing, good hygiene, making sure all employees are fit and healthy, and also working with remote collaboration with the plant floor or with the central office as much as possible. And, you know, I'll get more into that later on.
Amanda: Clearly, there were some verticals that saw growth during this pandemic. I'm thinking pulp and paper and chemical processing, but others didn't. And supply chains were also stressed quite a bit. What trends are you predicting for the next year as we hopefully start coming out of this pandemic?
Deanna: Well, I would say that some of those verticals that saw growth will continue to. Plastics is another one particularly for consumer products, home products, of course the health industry experienced a lot of growth. And I would say manufacturing 4.0 is having its moment. So, that I feel was a big area. A good note is that this pandemic and the challenges have accelerated investment in digital technology, and I think this will help to use a word we've been throwing around a lot, immunize manufacturing against future pandemics or health issues of any kind, weather issues across the world. A survey from Hitachi Vantara said that 48 of manufacturers already use robotics and automation, and that helped them overcome the challenges of the COVID. And 41% plan to increase those investments.
And what I've been hearing across the board is that automation is, and we've seen it before, improving worker safety, job satisfaction, labor productivity and reduces their cost as well. And that remote collaboration we'll just continue with that. There's also a recent McKinsey survey report on manufacturing 4.0, which I would recommend, and they surveyed manufacturing and supply chain professionals at 93 plan to focus on resilience of their supply chain and 90% plan to invest in talent for digitization. And since I've talked to a lot of small and medium-sized enterprises, I will say that what I've observed and know is that there's a lot of inexpensive retrofit automations that can be done for digital work instructions, augmented reality-based operator assistance, digital performance management, digital maintenance, regardless of what kind of infrastructure they have for automation right now.
I've seen it in practice on a very old piece of equipment where you simply add a digital sensor, and make sure that data is collected, and seen real time on a dashboard somewhere. So, there's a lot even in this financially challenging time for small to medium-sized companies, there's changes they can make like that. And then, of course, companies that already have IT or OT manufacturing, execution systems, data lakes, they will just accelerate those even more. They can really increase their supply chain planning, operational issues, delivery challenges. A lot of planning for all parts of manufacturing have been really siloed. So, when people start automating more, and bringing in these digital solutions, they can really improve that transparency and end-to-end visibility.
And what I also think is encouraging is that some of the new forecasting will go beyond some of the previous ways of using algorithms that maybe only use internal data to use AI and machine learning so they can take advantage of external data from suppliers and customers use weather, demographic and economic indicators in a greater way, incorporate it day-to-day. And two, I'm very fond of wearable technology, as we all are, and that has of course started to be a big boon with manufacturers. There's a company I'm thinking of in particular that has sensors that really improves workers' safety on the shelf on the plant floor. There's machine vision technology, contact and location tracing. Yeah, there's a lot of fixes as well as more long-term, bigger investments that can be made.
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