For decades, manufacturers have relied on skilled labor to ensure processes are monitored, orders are filled, and factories are operating at capacity. This continues today, with demand for goods growing in lockstep with population growth. Unfortunately, with a large number of boomers retiring from our industry, most manufacturers are finding it difficult to find new workers who have the skills and training to fill those positions.
According to the Bureau of Labor Statistics, the United States has 12.85 million manufacturing jobs1, which employs 8.5% of the workforce, and pays 12% more than other jobs. Yet, 89% of manufacturers are leaving jobs unfilled because they can’t find qualified applicants, according to a 2018 Deloitte Institute report2. The skills gap could leave 2.4 million jobs vacant between 2018 and 2028. That could cost the industry $454 billion in 2028.3
From very early on, there has been a widely held perception that Artificial Intelligence (AI) will replace humans and eliminate jobs. While AI and “machines” have eliminated many of the mundane and repetitive tasks in factories, the reality is that AI has created more jobs than it has eliminated.
Manufacturing, once the backbone of the American economy, is now a $40 trillion- a- year global industry. The US trails other countries in growth due to outsourcing and the lower cost of skilled labor found in other regions, North America continues to lead in manufacturing innovation. SMART Manufacturing is a concept that was pioneered here in America, and manufacturing operations worldwide have benefited from this innovation and will continue to do so for decades to come.
Unfortunately, the manufacturing sector is notoriously slow in adopting new technologies. This must change to keep pace with demand and compete with emerging markets. AI is the one technology that can help. If you talk to any CEO of a large manufacturer, they understand this dilemma and are trying hard to overcome it by adopting AI, but it is an uphill battle. All too often, the goals and objectives set by upper management are at odds with the workforce on the shop floor. Companies that are willing to take calculated risks on new technologies will reap the rewards of early adoption, and it can be a strategic advantage over competitors.
One of the catalysts that will require companies to accelerate their pace of change is the fact that an estimated 2.4M manufacturing jobs will go unfilled in the next 10 years. Because skilled labor demand is outpacing workforce supply, manufactures have to begin to think differently. You could argue that in order to remain profitable, manufacturers must aggressively invest in process automation and other advanced technologies, including AI, to help bridge this gap.
Change is good, but getting people to embrace change is difficult. Time to get moving.
3 According to the balance, “Importance of Manufacturing to the US Economy” Oct 22,2019