How Workforce Proficiency Drives Organizational Agility

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Industrial businesses are remarkably agile. Each day, they compete to deliver innovative new products and services to market… as efficiently and cost-effectively as possible. To pull this off, they run extremely complex operations with thousands of moving people, processes, and parts. They must also navigate many potential sources of friction in their operation, such as supply shortages, quality issues, aging equipment, changing regulations or pandemics (to name a few). These sources of friction can be a drag on agility, aka the ability to respond to change.

Based on thousands of conversations with industrial businesses, we know that one major source of friction is the proficiency of the workforce (or lack thereof). What does it mean to have a proficient workforce? It means that your team has the right mix of skills to complete the required workload on time / to quality / to safety. Workforce proficiency is critical to workforce productivity and labor optimization.

There’s a lot to unpack here, so let’s dive in. Imagine one of those two-sided balance scales. On one side, you have the workload. On the other side, you have the workforce. To maximize workforce productivity, the goal is to balance the scale — meaning you have the right mix of skills to complete the required workload. In any given period, the scale is hard to balance because both sides are constantly changing...

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How does the workload change? Several examples:

• Business growth, contraction and reorganization
• Changing product mix (e.g., new launches, mass personalization, etc.)
• Defects, escapes and recalls
• Difficulty forecasting demand
• New equipment / automation
• Supplier challenges

How does the workforce change? Several examples:

• Business growth leads to hiring
• Business contraction or M&A leads to reductions in force (RIF), freezes and/or consolidations
• Cost-cutting initiatives (i.e., do more with less)
• Automation is changing required skillsets
• Retiring baby-boomers
• Undersupply and/or under-qualification of new hires
• More contract / temporary labor
• Turnover
• Absenteeism
• Increasing regulations to prove qualifications
• Worker specialization and limitations on cross-training
• The list goes on…

How does an organization dynamically balance workload and workforce?

As many manufacturers are discovering, maintaining a proficient workforce based on the workload is getting harder. But in order to rebalance and respond to change, they must:

• Know what works need to be done
• Know who can (and cannot) do that work
• Determine skill gaps
• Swiftly fill those skills gaps by training and/or cross-training

This sounds straightforward, but it is difficult in practice because MOST organizations are still using spreadsheet-based skill matrices. However, most business and frontline leaders do NOT rely on these matrices because the data is stale and hard to access. This makes it nearly impossible to:

• Know who can (and cannot) do what work
• Determine skills gaps

Also, many organizations rely on manual/offline training and evaluation processes. This means: 1) processes can be inconsistent or subjective 2) there is limited real-time visibility into progress 3) it’s difficult to manage timelines 4) qualifications do not incorporate work experience. This makes it nearly impossible to:

• Swiftly fill skill gaps by training or cross-training

Needless to say, offline/manual solutions leave a lot left to be desired. Fortunately, industrial businesses are problem solvers, and they’re increasingly investing in new digital solutions to be more agile.

What are the essential functions of a viable digital solution?

For swiftly filling skill gaps by training or cross-training:

• Digitize end-to-end on-the-floor qualification processes (from assignment to skills matrix update)
• Configure qualification-specific processes, which may include OJT hour tracking, embedded evaluations, gated multi-level sign-offs, parent/child relationships, and more
• Associate qualifications with specific machines, parts, model years, etc.
• Prompt action with automatic escalating notifications
• Track expirations and configure unique requalification processes

For knowing who can (and cannot) do what work and determining skills gaps:

• Associate qualifications with jobs / operations / work orders
• Auto-update skills matrices, which can be auto-scoped for and accessed by business & frontline leaders
• Auto-update training plans that compare current and required capacity
• Review the work log to see the last time a worker completed a specific job, aka performance-based proficiency (note: requires data pull from work order management system)
• Enable qualification-based gating for work order buy-offs, aka process control (note: requires data push to work order management system)
• Auto-generate audit trails

Takeaways

Industrial businesses are remarkably agile, but many are struggling to maintain proficient workforces. Unfortunately, it’s impacting their ability to maintain production levels, to grow, and to pursue new market opportunities (1). Fortunately, organizations will do what they do best in order to be competitive — solve problems. In this case, we’re seeing increased investment in digital solutions that can help drive workforce productivity and rebalance the scale.

1. https://www2.deloitte.com/us/en/insights/industry/manufacturing/manufacturing-industry-diversity.html/#endnote