2023 Expectations And Implementations
Klaus M. Blache | March 1, 2023
By Dr. Klaus M. Blache, Univ. of Tennessee Reliability and Maintainability Center (RMC)
“It’s tough to make predictions, especially about the future.” (Yogi Berra).
“I never think about the future. It comes soon enough.” (Albert Einstein)
Here we are, well into another year with old and new challenges and opportunities. Rising product costs, inflation, interest rates, shrinkflation (same price, less product), are all with us for a while. The global pandemic has improved, but new strains continue to make the virus a factor. Digitizing everything, global unrest, people’s changed views about work, and energy uncertainties all add to the inherent risks. The supply chain is still not dependable. This is all exacerbated with many companies still struggling to meet workforce needs (both number of employees and proper skills). Many employees have already left their jobs and many are still evaluating options and not sufficiently engaged (quiet quitting).
A January 2022 National Association for Business Economics (NABE), Washington (nabe.com), survey reflects increased labor shortages. “Only 24% of respondents reported no shortages (overall) at their firms as compared to 35% of respondents in the October 2021 survey. The most pressing shortage is labor. More than half of respondents in the January survey, 57%, report skilled-labor shortages, up from 47% in October. Unskilled-labor shortages are reported by 24% of respondents in the January survey, compared to 11% in October, reflecting the largest increase among all the shortages surveyed,” January 2022 Business Conditions Survey Summary.
Automation and robotics implementation continues to increase. This will take away jobs and affect salaries. Taxing robots has been suggested. Arnaud Costinot, an MIT economist stated, “Although robots have an effect on income inequality … they still lead to optimal taxes that are modest. Specifically, the study finds that a tax on robots should range from 1% to 3.7% of their value.” MIT economist Daron Acemoglu and Boston Univ. economist Pascual Restrepo found that, in the U.S. from 1990 to 2007, adding one robot per 1,000 workers reduced the employment-to-population ratio by about 0.2%; each robot added in manufacturing replaced about 3.3 workers, while the increase in workplace robots lowered wages about 0.4%,” MIT News | IndustryWeek.
Digital implementation will increase, with faster systems to support applications. Technologies, such as augmented and virtual reality, artificial intelligence, edge and cloud computing, and all the other IOT components, will be more integrated to leverage synergistic benefits. However, the rate of successful implementation will be as much dependent on the organization’s understanding of human-centric implementation to enable a mutually beneficial work environment. Industry 5.0 is a step toward this holistic “people-plant-planet” business thinking.
Some items I feel need to be addressed for organizations to be successful in the current state of the work environment include agility as the new Lean. That doesn’t mean agile should replace Lean. If Lean is properly implemented and you have a culture of plant-floor initiated small-team continuous improvement, you have agility and resilience. Unfortunately, more than 70% of facilities don’t have that level of plant-floor accountability. Most haven’t even properly implemented 5S and Standardized Work Practices, which are rooted at the foundation of the needed culture of discipline/accountability.
Stability is the new just-in-time. Hopefully all businesses have done a VSM (Value Stream Mapping) and risk analysis of their supply chain. The pandemic revealed many of the weaknesses in supply chains, processes, and how good your plan B was, if you had one.
Understand your business/workforce readiness for digital transformation. Workforce digital capabilities versus business needs need to be assessed. There is already a large gap. Find out what you can upskill and who is willing to be upskilled versus what needs to be hired.
Upskilling your workforce is a must. Finding the right people will only become more difficult. Because everything in most businesses is becoming more digital, everyone is looking for the same skill sets. For more information see my November 2022 Efficient Plant article, “Is Industry 5.0 Anything New?”
Attention needs to be given to Organizational Health (Culture) and Operational Performance. Companies that focus equally on both typically do at least 25% better on the bottom line.
Human factors will enhance the successful implementation of Industry 4.0/5.0. Beyond the familiar ergonomic basics of reach and lifting, there are numerous other areas of human performance that come into play with increased use of digitalization and related technologies. Examples are design of information systems and controls, physiological factors (muscle fatigue, respiratory rate), psychosocial factors (machine pacing, role ambiguity), and cognitive factors (sensory and perception, human-machine interface).
Find the correct balance of hybrid/remote/in-office work models that can meet workforce expectations and business needs. It’s been labeled as “the great reshuffle” and it’s not going away. This is especially challenging for many businesses that must have people at the workplace. If a win-win solution is not found, it will become increasingly difficult to convince younger workers to commute to an office every day.
Customer expectations are higher because they are linked to everything with easy access to information. Whether it’s for car purchases, services, hotels, restaurants, and feedback on use by others (all connected by internet groups), people want data and immersion to make decisions. It’s not surprising that there are now job titles such as User Experience Designer and Chief Experience Officer.
Business models that reflect the needs of the future must be resilient to unexpected challenges. Doing nothing is also a decision and maybe not a good one. This is not just a digital-focused add-on to the current model. Many business models need a rewrite to properly encompass the above and many other complexities of running a successful operation/business today. With so much going on today that’s changing, I’d rather be making things happen on those things that I can positively influence. EP
Based in Knoxville, Dr. Klaus M. Blache is director of the Reliability & Maintainability Center at the Univ. of Tennessee, and a research professor in the College of Engineering. Contact him at firstname.lastname@example.org.