On-Time Edge wishes it could wave a magic wand and offer an easy path for manufacturers of all sizes to find and keep qualified workers. We recognize this talent problem is a particularly tough challenge for small and mid-sized manufacturing firms. Human Resource disciplines are outside of our core expertise but we can outline some criteria and observations that may provide helpful guidance to defining and recognizing highly qualified labor. Like any resource, the lack of good people in your company and in the marketplace can be a serious constraint to growth.
This discussion focuses on direct labor, that is, those employees whose work can be allocated to certain products or services (production), whereas indirect labor is employee work that can’t be traced back or billed to services or goods produced (overhead).
Measuring Sticks for Qualified Labor
Let’s start with some measuring sticks for direct labor in manufacturing because without clear criteria you will struggle to keep or find the best qualified people.
Experience has taught us and our clients that the men and women who are measurably the smartest and most conscientious are most likely to develop successful careers and make many contributions to the company in the long term.
Okay, these two attributes (smart and conscientious) are obvious and a bit apple pie. But look deeper: these “economic contributors,” as we call them (a la mode, if you will), make the right things happen in the right order and in the right way. They demonstrate:
A track record of verifiable results accomplished at your company or at prior companies
An ability to build or integrate into productive teams
The skill to maximize the efficiency the key people under them or with whom they interact
Most importantly, an understanding of the bigger picture by executing the strategic business priorities of the company
These are the qualities that you should be looking for, elevating, and rewarding. Evaluate your people or the people you are screening as career candidates who have these qualities; can speak ably about them; and can prove them with examples from their own work.
Sadly, these “economic contributors” began to slip away when, through no fault of their own, manufacturing jobs started shifting to low labor cost countries during the ‘80s and ‘90s. The pendulum has begun to swing back after 10 to 15 years of good and bad experiences with manufacturing in other countries. (The present recession, due to the pandemic slowdown, may dent these re-shoring efforts for some companies or increase domestic production for others.)
Every manufacturer can tell a firsthand horror story about a long-distance quality production problem and the pain of setting things right. Companies are realizing that manufacturing done domestically or at least on the North American continent, will reduce:
The incidence of production snags and the recovery time due to them
The long lead-lag times (by eliminating weeks to months shipping delays)
The barriers (language and others) to resolving quality issues.
What Can Help?
Of course, hiring qualified labor domestically is a key determinant of success as a manufacturing company. These “economic contributors” are a precious resource and are a constraint when you don’t have them or not enough of them in your shop. This situation is textbook Theory of Constraints (TOC) where you have to exploit your most critical resources--or constraint--better than your competition. So, whether it’s in a job shop (e.g., specialized welding), or high skilled assembly labor (e.g., electronic components), the trick is to create a plan or a schedule that maximizes the efficiency of these constrained resources. Identify the key resources in the facility around them so you can manage capacity based on the toughest labor skills to acquire.
Who to Focus On
One of the most underrated and most important labor skills in the org chart is the planning and shop floor execution department. Shop floor supervisors, operations managers, production managers, directors of operations, and COOs of course, are going to have the biggest impact on the bottom line of a company. That's where the smartest and most conscientious people in the company should be.
Arm Your “Economic Contributors” with the Best Tools
Provide your best performers with the right technology and an outside partner that will keep them up with the latest technology—whether it's an advanced planning and scheduling system (APS) or a manufacturing execution system (MES)-—to help them do their jobs effectively, at peak efficiency. Easy-to-use systems and believable, hard-as-nut data on which to base decisions increases their job satisfaction which helps you retain them. Otherwise, the attitude of “why can’t we get anything done around here—or do things right” begins to erode job satisfaction.
Further up the org chart, the C-suite needs quality data from these systems so they can make data driven decisions to run and grow the business. If the data quantity is there, then that information becomes an accurate depiction of reality and a guidepost for directing the company.
Data quality should be viewed at the same level as parts quality or production quality. In fact, data quality should be a quality control function. It should be tracked, measured, audited, and remedied. The lack of data or reliance on poor data should be considered as serious as a part breakdown or a machine breakdown. If the data is maintained properly, you can rely on the system and the validity and reliability of the data upon which you base your operational and strategic decisions.
Digital Transformation in Manufacturing Is Here
I have to speak frankly–the commitment to systems and data quality isn't a mentality that we see in a lot of medium sized manufacturing companies. If you are a CEO of a medium-sized manufacturing company you need to think hard about systems, software, and data quality. Companies that are charging ahead now are embracing technology advancements that are both mainstream and out on the edges: AI, IoT (Internet of Things), Machine Learning, Big Data, eCommerce, and more.
Note this. Within the next 48 months, more than 42 billion IoT devices will connect people and organizations across industries, channels, and value chains (Source: IDC Market Intelligence). The impact on business strategy and execution is both real and immediate.
Start Where You are but Jump In.
We can help you put in the systems and planning tools that can deliver the control and visibility you need into production processes for improved efficiency and financial performance.