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Nick Castellina

Innovation

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Technology maximizes human potential. It does not replace it.

Published: Thursday, August 1, 2019 - 12:03

Manufacturers often have a love-hate relationship with technology, particularly artificial intelligence (AI) and other solutions that have the potential to affect jobs. On one side, companies need every tool available to help bolster efficiency and cost-effectiveness. On the other, the workforce fears loss of jobs. Predictions for lights-out factories, run by robots, may even make jobs in manufacturing seem destined for obsolescence, scaring away new recruits.

A more logical view, though, sees advanced technologies as a workforce power tool equipping the enterprise with enhanced insights and speed. Freed from manual, tedious tasks, humans can focus on their unique abilities: innovating, problem-solving, and relating to customers.

Why it matters

The stakes are high, and the timing is key. As with most disruptive technologies, the early adopters stand to make substantial gains in market share and competitive differentiation, while those watching from the sidelines fall further behind, lacking the insights needed to keep pace with the new standards. A recent study from McKinsey predicts that leaders in AI adoption are likely to benefit disproportionately over those who delay. By 2030, the front runners could potentially double their cash flow, while nonadopters could experience a 20-percent decline in their cash flow. The ability to anticipate the needs of customers and respond proactively is the driving factor, the study projects.

In addition to the profits at stake, manufacturers also must be on top of the AI trends to adjust their workforce and compete for the limited number of job applicants with necessary skills. The demand for physical and manual skills has been declining for the last 20 years, and this decline will continue with even further automation. Between 2016 and 2030, demand for manual skills will fall by 11 percent in the United States and by 16 percent in Europe, says another McKinsey study. It also projects that the demand for higher cognitive skills, such as creativity, critical thinking, decision making, and complex information processing, will grow through 2030, by 19 percent in the United States and by 14 percent in Europe.

Already, there is a shortage of skilled workers. Manufacturers have been struggling with the skills gap issue for nearly a decade as retiring baby boomers left vacancies that have been difficult to fill. Deloitte and the Manufacturing Institute say that during the next decade, nearly 3.5 million manufacturing jobs will likely be needed, and two million are expected to go unfilled due to the lack of qualified individuals—and fewer graduates interested in manufacturing jobs. Although grass roots efforts, like Manufacturing Day, which can be held anytime during October (observed on the first Friday of October in the United States), attempt to educate the public about manufacturing careers, most experts agree that more needs to be done to promote science, technology, engineering and math (STEM) skills in schools.

Recruiting tech workers from underrepresented demographics, such as women and minorities, would also help manufacturers stabilize their workforce. Organizations, like #YesWeCode—a job training and scholarship program with the goal of reaching 100,000 underrepresented youth—are emerging to help overcome gender and race biases as well as encourage more participation in tech careers among a broad spectrum of young people.

The demand for skilled workers will only escalate as more manufacturers realize the value of AI technologies and want to deploy advanced analytics and IoT initiatives across their enterprises. Upskilling existing employees, shifting them from the manual jobs that are eroding, is one of the possibilities manufacturers must consider. This takes time, though, and manufacturers must begin assessing the types of soft skills, like team-building and communication, as well as what specific tech skills they will need.

Overcoming misconceptions and fears

Everyone is familiar with the science fiction depictions of dystopian universes overrun with self-aware robots plotting world domination and eradicating pesky humans who get in the way. Notable scientists and thought leaders, from Stephen Hawking to Elon Musk, have even voiced their concerns about the potential threat that sentient machines may pose to humanity. While such themes make good movie plots and clickbait, IT professionals agree that we are a long way from Skynet-style doom.

Industry visionaries are fuzzy on the way the future might play out. A report released in early March 2019, from the Organization for Economic Cooperation and Development (OECD) found that AI and robots may not take as many jobs as some people once projected. New estimates indicate about 14 percent of current jobs are “highly automatable.” This is far less than was projected in the infamous Oxford University report in 2013, which warned that 47 percent of jobs in the United States were at risk of automation.

Automation is the new norm

There is no doubt that automation is helping to reimagine manufacturing. Machinery, equipped with robotic arms, laser eyes, condition sensors, and flexible footprints, can transform raw resources into finished goods with remarkable speed and precision. Quality control is often enhanced through automation, as machines bring steadfast consistency to the production run, no matter the time, day, or duration of the run.

In many cases, the basics of automation and streamlining processes have already been made—out of necessity. During and after the financial crisis of 2008, manufacturers were forced to make cutbacks, bringing head counts down as far as possible to avoid closing doors. Operating on skeleton crews, plant managers had to combine jobs, eliminate unnecessary steps, and automate. A 2011 survey by McKinsey indicated that 44 percent of firms that reduced their headcount since the financial crisis of 2008 did so by means of automation. The National Association of Manufacturers (NAM) says output per hour for all workers in the manufacturing sector is 2.5 times greater than in 1987. Technology gets the credit.

AI enhances rather than replaces

Some skills cannot be replaced by robotics or AI. The lights-out or zero-labor factory does not seem to be just around the corner, as some futurists once thought. There are some extreme examples of highly automated factories, like a plant in Oshino, Japan, where industrial robots produce industrial robots, supervised by a staff of only four workers per shift. More often, personnel make the strategic decisions and day-to-day operational plans. They set the pace, the priorities, and determine when and how orders will be fulfilled. Technology also generates new types of jobs. Robotics need service; networks need programmers; data require analysis and interpretation; and machines need to be designed by engineers who understand sophisticated IT systems and know how to harness that potential, turning it into products consumers need or want.

Manufacturing still is somewhat of an art form, especially as trends move toward highly configured products made to order. Innovation and problem-solving skills are essential. Even entrepreneur and Tesla founder Elon Musk, a highly vocal proponent of factory automation, admitted in a Tweet earlier this year, “Yes, excessive automation at Tesla was a mistake,” he wrote. “To be precise, my mistake. Humans are underrated.”

This may be why most manufacturers envision environments where personnel work alongside robotics and smart machinery to perform their jobs better and faster. AI is a tool to help personnel. In many cases, the average user may not even realize AI technology is driving the solutions he is using to perform daily tasks, like forecasting sales or projecting resources needed. Some advanced enterprise resource planning solutions include AI-powered analytics as part of their operating systems.

AI-driven personal assistants, like Amazon’s Alexa and Apple’s Siri, which are becoming mainstream consumer tools, will soon be just as widespread in business environments. Such platforms integrate with the enterprise resource planning system, answer questions, perform tasks, and provide guidance. Being able to access critical data hands-free, without even needing to touch a keyboard or move a mouse, offers many benefits, especially for workers not in offices. Warehouses have benefited from the safety advantages of voice-activated systems for quite a while, as have some field service organizations. Expanding use cases to include HR, financials, customer management, and the executive level will bring even more agility and efficiency to organizations—exactly what manufacturers need to stay competitive.

Today, as the applications of AI have started moving from theoretical visions to proven use cases, a more realistic view of the potential is coming into focus. Media pundits now frequently describe scenarios where humans and AI-powered machinery work together to create symbiotic relationships and super-achievers. Automation, robotics, machine learning, IoT, and AI platforms with personal assistants will play important roles during the next generation of manufacturing. But human insight, inspired innovation, and creative thinking will still be essential. People still power manufacturing.

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About The Author

Nick Castellina’s picture

Nick Castellina

Nick Castellina is the Director of Industry & Solution Strategy, Infor Manufacturing.