By Peter Scott
Yes, the latest figures show U.S. unemployment remains stuck in the 10 percent range, but let's not kid ourselves. Discrete manufacturing is heading full speed into an entirely different kind of personnel crisis: a shortage of qualified knowledge workers.
A number of factors contribute to demand exceeding supply. Consolidation and downsizing are commonplace in a struggling economy, and many of those affected are being forced onto new career paths. At the same time, the first Baby Boomers are retiring. Today's trickle will become a torrent in the next three to five years as more members of that generation reach retirement age. And as everyone understands, replacing individuals with years of institutional knowledge and industry experience simply isn't easy.
What's happening in the aerospace and defense (A&D) segment typifies the challenge we face. According to a recent study completed by the Aerospace Industries Association, nearly 60 percent of the current workforce is at least 45 years old — more than halfway through their careers — while only 16 percent fall in the 25-34 year-old range. More tellingly, a survey conducted by Aviation Week magazine found that 13 percent of the workforce is eligible to retire today, and by 2013 that number will approach 20 percent for critical knowledge jobs like supplier management, operations and program management.
Unfortunately for A&D and many other manufacturing-based industries, there aren't enough incoming workers to replace those who are poised to depart. Why? For starters, in an Aerospace Commission survey of 500 U.S. workers, 80 percent said they wouldn't recommend their children pursue careers in the industry due to workplace instability. This attitude is not limited to aerospace, as parents encourage their offspring to consider higher growth, more stable industries. In addition, today's college graduates want to work in environments that embrace and integrate the latest productivity tools, from mobile devices to social networking services like Twitter (used by 37 percent of people aged 18-24 in 2009, up from 19 percent in 2008). Because of its highly regulated, long lifecycle, risk-averse nature, A&D tends to lag in adoption of next-generation capabilities, making it a less attractive destination to the "connected" group entering the workforce.
So what do we need to do to avert the crisis? We must institutionalize the tribal knowledge of those exiting and simultaneously attract the top young talent to take over the reins. Modern information technology is a key element to empowering people to do more with less.
Currently, supply chain management personnel rely on their years of experience to execute daily tasks. They know who to call, what to do, and what works and what doesn't. This highly manual, individual-based model does not scale or transfer effectively as these wise men and women depart, especially when there may not be enough replacement workers waiting in the wings. Moving to a systems-based approach is part of the answer, because systems can enforce standard business practices, create visibility and transparency, and operate with greater speed and efficiency.
Technology — in particular, knowledge management solutions — lets us capture and standardize organizational expertise before it walks out the door, so we are able to convert knowledge and business context into processes that can be streamlined and automated. With consistent execution and the availability of reliable information that spans these processes, we can monitor end-to-end performance in real-time and deploy our limited resources to manage by exception, where and when they are needed most.
By leveraging technology, we can increase efficiency, reduce costs and scale to effectively operate in tomorrow's complex, multi-enterprise supply chain environments. Just as significantly, we can address the cultural tools expectations of younger workers to improve the hiring success rate.
The real numbers don't lie — we need to do more with less, capture institutional knowledge and attract new blood. Strategic investment in supply chain and other management technology is critically important to achieving these objectives — slamming the door on information loss by providing a "brain trust" that mitigates the forthcoming "brain drain." ¦
About the Author: Peter Scott is vice president of supply chain solutions at Exostar, a provider of secure collaboration solutions and business process integration throughout the extended value chain. More information at www.exostar.com.