In this post, we define and analyze several core problems factories face in managing talent, from training to career development.
Your people are your greatest asset. It might be a cliche, but it’s true. Without a good team firing on all cylinders, you’ll never be as efficient, competitive, or profitable as you could be.
But factories typically run into recurring problems with managing a large group of people. Because for all the strengths your processes might have, there are always ways they can fall short in making the best of your talent.
In this post, learn:
Recurring problems factories face with their personnel
The skills gap
The European industrial workforce is aging. The percentage of people over the age of 55 in continued employment has been increasing for some time.
And as each colleague retires and leaves the line, decades of experience is leaving with them.
Sure, you can train new staff to fill their positions, but what they also take with them is something called ‘tribal knowledge’.
In their long careers, these experienced employees develop unique firsthand knowledge of machines and processes that goes undocumented in your official training guides and work standards. They’ve uncovered hidden workarounds and best practices, and an overall ‘feel’ for the work it takes many years to replicate.
And because this is undocumented, the benefits of this knowledge are usually unaccounted for, meaning it may take you a while to see similar results with a different operator.
Meanwhile the factory itself is becoming more complex and multilayered. New digital tools and automations are bedding in, requiring staff with an Industry 4.0 skillset.
So you have a twin problem. You’re losing dependable, experienced hands, and you need a new kind of worker to step up. And these skills are hard to come by on the job market.
The net result is a labor shortage and a drain on skill across the line.
Ineffective training
Typically workers are trained on their stations by shadowing colleagues. They see how this veteran does the job, picks it up, and applies it.
For some jobs this is sufficient. But in a lean factory, this can create inconsistencies and inefficiencies that are hard to trace and root out.
A worker shadowing a more experienced colleague will adopt bad as well as best practice, depending on who they learn from. And there’s a risk they’ll learn habits or shortcuts that could be fateful down the road.
Even if you could guarantee that there was no safety risk to this method of training, two colleagues trained on the same machine will produce different results in terms of quality and speed. That makes it much harder to predict performance. And it can take time to isolate the issue and address it through further training.
Leave this system in place for too long and across too many production lines and it becomes difficult to guarantee any kind of consistency.
Absence and high operational downtime
In an ideal world you would have multiple people trained on the same machine or process ready to fill in when someone is absent from work. However, one of the biggest skill management headaches comes from this very problem.
Because when an unexpected absence strikes, it can be a disaster.
And existing methods for overseeing and managing employee competencies aren’t up to the task.
Searching for an available replacement to free up the bottleneck takes up valuable time, producing unplanned stoppages and lost productivity you can scarcely afford. While a manager is scrabbling around to find a replacement, they often can’t depend on the information available to them.
Because in an analog system of cataloging employee capabilities, there’s no assurance that everything is up to date.
Aside from the economic cost of downtime through absence (which can run to the 100,000s), there’s the human aspect too. Managers are put under a great deal of pressure to solve the emergency, while workers are often placed on a station they aren’t 100% comfortable with.
This reactive response to absence can create a feeling of uncertainty on the shop floor, and reduce confidence across the line.
And it can link to our next point, too.
Under-engaged employees and high turnover
If you lack proper skill management, workers can feel left behind. Their skills go unrecognized; their talents unfulfilled.
Nobody likes to feel they’re trapped in a role with no prospects of development or advancement. But an outdated skill management system will leave many workers in this state, not through any intention on the part of management, but because the system itself fails to surface relevant data.
You need a structured system for skills development and a standardized training regime. Without those, workers lack the clarity and framework for advancement. And you also fail to make repeatable assessments that accurately categorise skills and set work standards.
Workers need to be able to check their current skills and competencies versus the requirements for a different, or higher position. They need to understand what good looks like on the line. This gives them the motivation to learn and to gain additional skills.
Plus, with an ad hoc training system based on shadowing colleagues, the opportunity to develop transferable skills at the start of their employment is lost. Instead, they learn how to perform simply those tasks they shadow.
The cost of poor skill management
We’ve hinted at a few areas where poor skill management can cost your factory. Lost revenue from stoppages and downtime are often the most immediate fallout from mismanagement of skills.
However, there are several others you need to watch out for. Let’s take a look.
Cost of poor quality
Inconsistent training and the lopsided capabilities that result can affect quality.
On the shop floor your scrap and rework rates are at risk. Then, when your product is shipped out, there’s the additional worry of higher warranty claims and returns if an unnoticed quality problem manifests later.
Of course you can never completely eliminate this risk. It’s natural that some waste will affect your line from time to time. However, having a skills imbalance increases the chance of this becoming a feature of your production line.
Without dependable quality, all your other calculations and projections are also under question.
High employee turnover
It will come as no surprise that workers look for other options when their skills are undervalued or underused.
If you have a poor training regime and an undisciplined skills management system your people will turnover in greater numbers. And newcomers will be subject to the same processes that helped cause the problem in the first place.
It can cost a lot to hire new people. Once you’ve factored in the expense of advertising, recruiting, administration, and training, it will be a while before your new colleague will be up to speed and delivering on the investment.
Statistics from the US show that lost productivity from high turnover amounts to a $1.8 trillion loss annually.
On an individual basis, this can mean an expense of up to 150% of a worker’s salary, according to the same report.
This is unsustainable during a global squeeze on available labor, not least because your outlay on finding someone new may need to be increased.
Overall Equipment Effectiveness (OEE)
For many manufacturers, this is the most important KPI of them all. And poor skill management threatens harm to your OEE through 3 essential areas:
- Availability: Slow staff deployment after a stoppage will mean longer downtimes, as we’ve pointed out. This is the first dent to your OEE.
- Performance: Inconsistent, poorly trained or unmotivated operators run machines inefficiently, causing minor stops and reduced productivity.
- Quality: The resulting number of defects and reworks needed mean your % of good parts produced in the scheduled time will be reduced.
If you’re part of a factory group or corporate network, a sluggish or declining OEE could spell intervention from above, something you’ll want to avoid.
Proper skill management, embedded into your productive processes and a consistent part of your employees’ development, will help you stabilize and improve your score.
The first step towards effective skill management
The mlean Production System (mPS) gives you all you need to modernize and optimize your skill management system.
Beyond digitizing your analog processes, it encourages you to take a lean approach to employee skill development and deployment. It eliminates guesswork by putting data at the center of your staff rotations.
And with tools specifically designed to help you standardize workflows and training, you’ll be able to ensure much greater consistency in how work is performed across the line.
To find out more, book a quick discovery call with our team, who will talk you through how the mPS could help your factory, or factory group, improve skill management for improved efficiency and profitability.
