The manufacturing sector represents a critical element of the Irish economy: according to Enterprise Ireland Technology Centres Program Manager, Kevin Flynn, “The sector has exports of almost €80 billion with direct and indirect employment of around 400,000 people.”
Ireland has managed to carve out a strong reputation for growth clusters of manufacturing centres for food and drink, life sciences and technology, making the sector a standout bloc for investment and growth. Despite these sustained successes, the realities of wider disruptions are still a constant and worrisome factor for organisations within the sector.
As with many sectors, manufacturing organisations across Ireland have had to deal with fundamentally seismic shifts in their day-to-day operations over the past few years with the challenges of the pandemic now giving way to fresher concerns around procurement, operational costs and the ability to hire key talent with the proper skills.
Ultimately, this means that many manufacturing businesses find themselves on the brink of a precipice that will necessitate bold strategic decision-making. In order to gain the operational agility required not only to account for wider global and macro-economic shifts but to also continue to build on recent years of sustained growth, there is a clear need for businesses within manufacturing to lean more heavily on the systems and technology which they rely upon daily.
Manufacturing has always been ahead of the curve when it comes to the adoption of technology- the demands of the modern production cycle necessitate this. However, the next step in achieving excellence for manufacturing organisations, even in the face of wider challenges will be to look beyond these systems as a way to achieve just operational efficiency but how the insights your technology and processes can offer you, can be used to shape truly transformative ongoing strategy.
In this blog, we will examine some of the major challenges facing the manufacturing sector and how your people management systems and technologies are ideally placed to help you enact meaningful transformation.
Skills gaps
Manufacturing organisations across Ireland employee roughly 260,000 people, representing 12% of total employment for the whole country. Manufacturing concerns tend to deal with large headcounts of employees, either permanent or agency workers and with the sector posting sustained growth year after year, the demands for skilled workers are only set to increase.
A reliance on temp or agency staff has sometimes given rise to a false assumption that work within the manufacturing sector is low-skilled. This is a viewpoint that fails to take into account the broad scope of the industry and wholly ignores the requirements for specialised workers such as those with HGV licences or who can operate machinery such as forklifts.
A recent report by the Irish Business and employers confederation (IBEC) found that 62% of manufacturing organisations have cited attracting and retaining a quality workforce as a number one priority. Manufacturing shares many concerns with the construction sector, particularly when it comes to the ability to attract younger members of the working population. As with construction, an inability to bring on board a crop of fresh talent carries the potential for key skills and knowledge held by older workers being lost.
One of the ways manufacturing concerns are looking to buck this trend is by placing an emphasis on digital transformation- The IBEC report found that 53% of businesses were committed to sustained investment in their systems and technology. Younger generations of workers are generally held to be more technologically literate than their predecessors and will want to seek out organisations who reflect their attitudes to the adoption of new systems and processes.
Rising costs
One of the more unavoidable challenges facing organisations regardless of sector, is how wider economic downturn has impacted the cost of doing business. Even in more resilient areas where sustained wins are being celebrated each year, such as with Ireland’s manufacturing sector, soaring costs are posing a serious challenge.
One of the chief areas of concern for manufacturing has been the increase in energy costs in recent times- IBEC's report found it to be a dominant factor for manufacturing leaders, with 77% citing concerns around energy efficiency and the procurement of raw materials.
That soaring energy costs are presenting a challenge for manufacturing organisations should come as no surprise- businesses in this sector routinely deal with multiple, large-scale sites, comprising of masses of equipment, all of which operate across a 24-hour cycle. A major issue for manufacturing leaders is the stark reality of this situation- you can’t afford to simply scale back your operations as that would incur greater losses.
This means that unfortunately, the burden of rising energy costs broadly speaking, has to be taken on the chin by businesses within the sector. How does this impact the people experience within these organisations however? Well, simply put, when business costs in certain areas rise to untenable levels, savings have to come from somewhere.
Now whilst the sustained growth enjoyed by the manufacturing sector does somewhat insulate them from the need to consider redundancies or wider job losses, there will still be a need to compromise. When belt-tightening exercises become a necessity, some of the first areas to be hit are often those which deal with employee rewards and benefits. Pay freezes or the elimination of paid overtime or other bonus incentives are commonplace when organisations look to mitigate the impact of rising costs.
Getting the most out of your people
One of the more fundamental requirements of manufacturing organisations is the need to embed and sustain a high level or productivity and engagement amongst their people. Manufacturing concerns often operate on 24-hour cycles meaning that there is little to no scope for downtime or to ease momentum.
Wider macro-economic challenges also heighten the need for a specific focus on driving productivity and getting the most out of your workforce. A recent CEO survey by PWC found that 82% of CEOs are aware of the need to enact change, largely supplemented by supporting the upskilling and growth of their workforce and the deployment of appropriate technology to support them.
When we talk about productivity, what do we mean? Well at a basic level, the goal is to measure the amount of value created for each hour worked. From a people management perspective, it’s a fairly straightforward metric to measure- assessing the individual output of employees on any given day.
While this seems simple on paper, a common hurdle when assessing productivity often comes from outdated or unsuitable systems and processes. Your people management solutions offer the ideal platform to provide you with an in-depth overview of performance across the scope of your workforce but what if the systems and technology you have in place are being used in a very narrow scope, such as simply just for time tracking? How can you be sure you’re getting the most value out of these solutions?
This is particularly key in manufacturing as the 24 hours nature of operations means there may be a significant portion of the workforce who are present at work when support functions of the business such as HR and other leadership teams aren’t. A key consideration for manufacturing concerns will be whether workers working unsociable hours are at risk of falling by the wayside in terms of engagement discussions.
Security
Manufacturing sites often deal with a huge headcount of workers or ancillary personnel such as agency staff or delivery and logistics workers entering the premises daily. Not Having a clear understanding of who is able to access key areas of a business is vital for organisations when looking to embed a robust security policy.
Lacklustre access control policies can make the flow of personnel through the business an almost insurmountable hurdle to overcome and can open organisations up to the threat of severe security breaches.
Manufacturing organisations are often hosted on multi-disciplinary sites, with production and distribution spaces fetching up against office buildings. Some organisations may have a clear and necessary barrier between areas of their organisations, particularly if certain departments deal with sensitive research and development concerns. In order to ensure high levels of security, it may be necessary to restrict the flow of certain personnel to specific areas of the business which are relevant to their roles.
This granularity in security is a key reason why manufacturing people management projects often lead with time and attendance and access control requirements at the forefront. Where physical security and access control points may be important in other sectors, in manufacturing, these become primary concerns to not only ensure control of the flow of external parties onto premises but also to monitor the movement of staff amongst sensitive areas.
Hopefully, this has been an illuminating exploration of some of the key challenges facing manufacturing organisations across Ireland. Despite the variety and complexity of these challenges, there is a common element which we’ve found reoccurring when examining the priorities of leadership teams within the sector.
A focus on digital upskilling and wider investments in systems and technologies have been identified as a key priority across many manufacturing leadership teams. Transformation of your people management systems, in particular, your time and attendance and HR solutions, offer the potential to offer you the key insights and agility you need to not only overcome challenges but strive for further success.
At Advanced, Our range of people management solutions have been created by experts in the field, designed specifically to allow organisations the ability to overcome common hurdles in their day-to-day operations such as the elimination of manual inputs, Increased automation of processes and the ability to run insightful reporting which offers up the key data metrics you need to guide ongoing strategy.
To discover more about how Advanced can help you overcome the key challenges facing the manufacturing industry, get in touch today.
