Rays of hope for workforce problems, boosted by the cloud and enterprise resource planning

Here we chat with Andrew Robling, principal product manager with Epicor, for insights on how emerging technology—particularly cloud computing and enterprise resource planning—can remedy workforces challenges and the importance of proper training on that emerging tech.

Smart Industry: What is the state of labor in the manufacturing space? What factors contribute to the current state?

Andrew: Despite the hype surrounding the next technology-driven Industrial Revolution, a global skills and labor shortage is hampering progress. This shortage has particularly impacted manufacturing, where an existing skills gap was exacerbated by the pandemic. In fact, according to Deloitte, US manufacturing alone is expected to have 2.1 million unfilled jobs by 2030.

Many industries struggled to make the switch to hybrid or fully remote work as a result of the pandemic, but the manufacturing sector as a whole wasn’t in a prime position to make this shift on a dime, due to the hands-on nature of the work as well as the state of cloud adoption, which in turn created a high employee turnover rate. Those who were in the midst of cloud transformation ahead of the pandemic were in the best positions, and the percentage of those who were not were kicked into high gear to accommodate the new demands of the workforce.

Furthermore, as the industry began its post-pandemic operations, the great resignation disproportionately affected manufacturing businesses—there was a 58% increase in quit levels in late 2021 compared to before the pandemic. The increased turnover is likely the result of several factors, including a steady wave of retirement from senior workers, health concerns of on-site employees and increased schedules for those still employed, leading to a reduced work-life balance, and an overall decrease in young adults enrolling in secondary education of any kind, including trade schools.

Since then, businesses have turned to technology to help alleviate the lack of employees, but the industry quickly realized there was a skills gap with current manufacturing workers. When the technology was first introduced to shop floors across the country, it became clear businesses and staff needed retraining to make the best use of the new technology.

However, there is a beacon of hope. Technology—specifically enterprise software such as enterprise resource planning (ERP)—has evolved to the point where it can provide relief for manufacturing businesses that are struggling to recruit, train and retain their workforce, while also meeting ambitious growth goals.

Smart Industry: What are misconceptions about how technology can address workforce challenges?

Andrew: Implementing software like ERP to automate business operations will eliminate and replace workers in the long term. Many times employers ask, “If I automate these tasks, can I eliminate these three positions on the shop floor?” The truth is that automation technology affords workers the skills and tools they need to be more efficient and productive at their jobs, as well as data and analytics to make more informed business decisions. The reality is that with solutions embedded with automation capabilities, workers can be retrained and utilized for more skilled work that contributes to the broader growth goals of the business.

Automation doesn’t replace jobs; automation helps improve efficiency and eliminate repetitive tasks that are more prone to mistakes. For example, if businesses are relying on people to manually input data into a system, there is a greater chance for inaccuracies. Automation helps to remove those errors and ensure greater accuracy in the data, which is invaluable to everyday decision-making. It also eliminates the time needed for workers to manually correct mistakes.

Smart Industry: What is an example of a solution that is cheaper / easier than robotics on the manufacturing floor? 

Andrew: Cloud enterprise software such as ERP can be a cheaper and easier-to-implement technology solution compared to the investment in robotics and machines.

Industry-specific cloud ERP solutions can help manage and optimize both shop floor and top floor operations, expanding efficiencies across the business. Especially as budgets are in flux in 2023, the question manufacturing leaders ask themselves is, “Should I use my dollars towards this machine that can make parts autonomously, or should I buy this software that can help optimize my business?”

Today’s industry challenges such as inflation and labor shortages all point to the fact that now is the time to strategically allocate a budget to build up the backbone of your business, and other hardware investments should become secondary. With increased visibility into critical data, businesses can more easily pivot due to the unexpected, better meet their overarching goals and drive revenue that eventually can be applied to robotic technology. Industrial robot costs are dependent upon not just the robot itself, but also the controller, software and other factors, all of which can become superfluous if a manufacturer must pivot.

Smart Industry: Why is training with automation software so important? 

Andrew: Training with automation software is extremely important because with the ongoing skills gap and the growing use of technology in manufacturing, the incoming generation of manufacturing workers must know how to use the technology and software in order to most efficiently perform their jobs. It also ensures a business is receiving the utmost return from investment in this technology. This is both the responsibility of businesses, educators and the software vendors themselves.

While manufacturing businesses should be investing in retraining and upskilling their workforce, from a software vendor perspective, it’s integral for us to provide our partners and customers with training materials that are intuitive and digestible for the end-users, namely, businesses and their employees. We at Epicor pride ourselves in making our training content available on demand and integrated within the product itself, which contributes to our partner-first mentality. We strongly believe that the enterprise-software industry can play a part in alleviating the skills gap by developing training that eliminates learning curves so staff can perform to their full potential.

Smart Industry: What excites you about the near future of industrial labor? 

Andrew: There is a lot to be excited about when it comes to the future of industrial labor. For one, automation within ERP and other enterprise software is going to continue to grow. As business leaders continue to face different challenges—not just a labor shortage—they will see the positive impact of automation on their businesses, such as the ability to pivot, and will continue to leverage it as a tool. In addition, with the growth of automation comes the upskilling of the labor workforce. It will be exciting to see the snowball effects and results of what a more tech-forward manufacturing workforce will be able to innovate and create.

Additionally, we’ve already seen the popularity of low-code/no-code platforms gaining traction in the industry because of their accessibility and ease of use for the end-user. Low-code platforms enable manufacturers to adopt some of the latest technologies quickly and cost-effectively, with little to no IT resources. This technology helps manufacturers to do more tasks with the resources they have, which will prove to be especially beneficial to small-to-midsize businesses.

Lastly, with increased adoption of artificial intelligence and machine learning, we’ll likely see how the role of IT in manufacturing will shift over the next few years. As IT teams and departments leverage AI-technology tools to optimize businesses use of ERP, AI and ML will help businesses make significant strides towards more efficient and streamlined processes.