According to a study by Deloitte and The Manufacturing Institute, 2 million jobs could go unfilled in the sector by 2030. The cost in 2030 alone could potentially total $1 Trillion. Worse yet, the manufacturers surveyed said it is 36% harder to find the right talent than it was in 2018, and 77% of manufacturers expect to have ongoing difficulties attracting and retaining manufacturing employees.

As technology, automation, and artificial intelligence (AI) continues to gain steam, lower skilled jobs are automated, but higher-skilled jobs become critical. The gap is significant. Additionally, as reshoring gains momentum and manufacturing expansion becomes a priority with the rise of geopolitical risk and the rollout of government funded programs such as the CHIPS act, manufacturing will increase, and the skills gap will widen. Finally, by 2030, the youngest of the largest generation in history will be older than 65, further decreasing the workforce.   

Simply hiring a recruiting firm will no longer be sufficient. There simply are not enough manufacturing resources to fulfill the needs. Proactive executives will put an increased emphasis on training and development. For example, an aerospace manufacturer needed far more machine operators than they could find, and so the company set up a training facility and hired trainers to put new hires through a comprehensive training and development program. They went from constantly struggling to creating a pipeline of qualified candidates. Another client sent employees to a technical training center in the region to gain manufacturing skills.

Relying on your planners, buyers, and analysts’ college education and prior work history is no longer sufficient. At least 80% of clients are struggling to hire resources with the appropriate education and training. For example, two power systems and electrical equipment manufacturers serving different industries went live with an upgraded ERP system. Although they brought on significant support, both struggled due to lack of production planning and inventory concept education and training for their resources. Proactive clients are arranging ERP and MRP (material requirements planning) education for their employees. For example, a significant beverage manufacturer has been coordinating with a local supply chain education partner to provide practical education.

Turn traditional thinking on its head. Supplement your employees with consultants to upgrade processes and improve efficiencies (refer to our guide for hiring consultants), hire temporary employees to fill gaps, and partner with specialist resources such as engineering firms to make quicker progress. Appreciate different pools of talent such as veterans and retired workers and reexamine your qualifications. For example, a building products manufacturer eliminated its requirement for a college degree and replaced it with practical experience and/or approved skills training. Not only did they find additional candidates, but the candidates were a better fit for the role.

Leadership and culture will be vital to closing the skills gap. People do not follow companies; people follow leaders. The best employees expect leaders to have high expectations, to address poor performers, to face reality with tough topics, and to appreciate and recognize progress. For example, an industrial equipment manufacturer was able to find and retain employees in a small town with limited resources and a key competitor because employees knew that the leader would expect high levels of performance, push for excellence, and cared.

Attracting and retaining talent will be key to success in the manufacturing industry in the next decade (refer to our article for strategies). Proactive executives are developing creative alternatives to traditional hiring, retention, training, and development strategies. The best remain committed to leadership and culture to retain top talent and attract scarce talent.  

Originally published in Brushware, March – April 2024

If you are interested in reading more on this topic:
Where the Talent Has Gone & Strategies for Success

The post Skills Gap Challenge for Manufacturing Success appeared first on LMA-Consulting Group, a supply chain consulting firm.

Where Has the Talent Gone?

The labor participation rate is still under the pre-pandemic rate. According to the Bureau of Labor Statistics, the rate is still running almost 1% below the pre-pandemic rate. This is no surprise to clients as they simply do not have the talent needed for key positions in Manufacturing, Planning, Purchasing, Customer Service, and more. Read more about the Skills Gap in our article.

We believe there are several key reasons for this continuing trend:

• Baby boomer retirements: 44% of the Baby Boomer generation are at retirement age. By 2030, the youngest of the largest generation in history will be older than 65.
• Pandemic career changes: The pandemic made people realize that they wanted to find what would fulfill them, and several have changed careers. Also, Families changed their view on how to raise children. In some situations, one parent changed and/or reduced focus on his/ her career (unless flexible) while his partner stayed focused on her career.
• Current Leadership: The generation following Baby Boomers (Generation X) is not as large. Across clients, whoever is remaining in a leadership role (typically a Baby Boomer, Generation X or Millennial employee) is completely overwhelmed and running around like a chicken with his head cut off.
• Newer employees: Generally, they are gaining experience, but do not have the knowledge to “figure out complex issues”.
• The advancement of technology: Technology continues to advance as companies realize they must embrace ERP systems, automation and robotics, artificial intelligence, predictive analytics and more. This has reduced the need for low skilled resources, but it has increased the need for high-skilled resources.

Lack of training & mentoring: For many years, companies could hire talent from the competition. Although this is still possible, there are fewer and fewer resources with the practical experience, systems and data knowledge, and process expertise to fill the roles.

Client Examples

We wish it was an exception, but clients are scrambling (and frequently in chaos). This situation is no longer the exception. It has become the norm. As key people leave the organization or critical changes occur, the resources simply do not exist to successfully navigate these situations as smoothly as they did previously. Thus, clients are scrambling on a day-to-day basis.

For example, multiple clients pop to mind with a key planning, supply chain or operations resource who is completely overloaded. This team member is “juggling multiple balls in the air while doing jumping jacks”. In essence, they are running around filling gaps, resolving issues, and bringing up topics proactively. However, internally, the resource is seen as the issue because she is always racing to keep up with Sales changes, rescheduling due to production ramp up challenges, uncovering system issues, and bringing up potential problems. There was a ‘brain drain’ of expertise and this resource continues to absorb additional tasks to try to keep the balls in the air.

The process is dependent on the system, and the system is dependent on the resources (design, setup, training), the data and transaction disciplines. In our examples, there are completely different situations (challenges, leadership styles, geographies, ERP system maturity, etc.). Yet the result is the same. If the process is dependent on a person, the process will not succeed. On the other hand, the process, system and resources need to be upgraded (including training and education) in conjunction with one another. Our consulting role is to partner with the client to assess the situation, design an upgraded path forward, and partner with the client to roll out and achieve sustainable results.

What it used to take to deliver bottom line results for clients absorbs around 20-30% more effort on average than it did pre-pandemic due to this skills gap (even with our greater experience and internal process upgrades). In some cases, it requires 50-100%! If this situation was an outlier, we wouldn’t be concerned, but it is no longer an outlier. Thus, we are pivoting and will be aggressively highlighting the key issues, warning signs and plans of attack earlier in the process. It will be less comfortable for clients to absorb this news earlier (with less time to absorb the facts), but we are experienced in seeing the signs and knowing the best route to “right the ship”, and so we will force these uncomfortable corrections early on. Fasten your seat belts!

Strategies for Success

There are a few key recommendations to start to “right the ship”.

• Leadership & Culture: There are fewer resources to bring on board to jump in, figure out a situation and “right the ship”. People follow people; not companies. Thus, you must have exceptional leaders. The only way you will have exceptional leaders is to have an excellent company culture. Of course, company culture goes back to leadership. There are no magical solutions. It take a LOT of hard work, excellent people, the willingness to take risks and invest when no one else is investing, and establish a performance management process that weeds out the poor performers and recognizes the star performers. Read more about this topic is our article How to Attract People to Your Company.
• Training, education & mentoring: These are NOT the same topic. You can no longer rely on hiring key resources away from the competition. Instead, you must develop them. Provide training (step-by-step processes), education (the why behind what you are doing and how it fits into the big picture), and mentoring (follow me and watch my example as I’ve been there and done that).
• Supplement resources: Clients are supplementing with consultants, contractors, interim temporary resources etc. Although we are jumping in as consultants to assist clients with critical priorities, we are jointly prioritizing bringing them up-to-speed so that they can sustain the process upgrades on their own.
• Appreciate different pools of talent: Retired workers might be exactly what you need to help you over the hump and/or bring folks up-to-speed. There are other groups such as veterans to pursue as well.
• Revisit your job requirements: What do your most successful employees do differently? It might be that they need fundamental skills training but not a college degree. It might be that they need certain characteristics for certain roles but not specific experience. It might be practical ERP knowledge instead of the specific ERP system experience.
• Meaning, Flexibility & Opportunities for Advancement/ Learning: The name of the game to attract, engage and sustain employees is to ensure meaning, flexibility and opportunities for advancement and/or learning.

Talent is such a critical topic that we will keep our eyes and ears out for unique strategies and fresh ideas for success. Please keep us in the loop with your ideas and success stories as well. It will be a key differentiator in the next decade.

If you are interested in reading more on this topic:
Where is Your Supply Chain Talent?

The post Where the Talent Has Gone & Strategies for Success appeared first on LMA-Consulting Group, a supply chain consulting firm.

Without people, no business will thrive. That’s why even the most technical of companies such as Google value people.  In our experience, people are the #1 asset of any organization. Hands down, we can help any organization with good people quicker and to a FAR larger degree than an organization with fewer good people.   

In thinking about what’s ahead for people, there are many transitions and trends to be aware of:

1. Baby boomers  – As baby boomers retire, they will be harder to replace than appears at first glance. No, typically speaking, they aren’t up-to-speed on the latest technology and they might have old fashioned ideas but they know “what works”. Don’t be too quick to hurry the process along. Instead, value their knowledge and find a way to transition it for a win-win.
2. The skills gap – It is hard not to have a skills gap when technologies change daily, jobs are being automated yet new jobs are being created with entirely new skill requirements, the world is becoming more complex and global and customers expect more for less. Are you prioritizing the retention of your top talent? Is your company attractive to top talent?
3. Diversity– We are not believers in mandates and regulations but we have found diversity to propel success. Are you actively attracting people who do NOT think like you? That’s a tough one (after all, don’t we all prefer people who agree with us?), but it is important if you want your team and organization to thrive. 
4. Spark an innovative culture – With the high demands of customers, Board members and the like, solid leadership is no longer enough. Sparking innovation has become a “must” for success. 
5. Go back to the basics with leadership– There is no coincidence that every successful client has a strong leader whereas long-term struggling clients and contacts (as struggling leaders rarely hire consultants) have weak leaders. Being a strong leader is “hard work” and requires courage. What are you doing to build your leadership bench strength?

The core tenets of successful people do not change. The requirements and challenges we face continue to expand yet the route to success is clear. We choose to see this fact with hope as it does not require rocket science to become a good leader, and we’ve seen plenty of examples of mediocre leaders transform into exceptional leaders with mentoring, coaching and experience. 

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CLAREMONT, Calif., December 1, 2018/ExpertClick/ — Culture plays a pivotal role in the growth of successful businesses, according to The Society for the Advancement of Consulting® (SAC). Those organizations that focus on building a strong culture based on core values and beliefs are likely to have better business results.

Culture is Directly Tied to Profitable Growth

“Our most successful clients definitely think profitable growth stems directly from culture,” points out Lisa Anderson, president of Claremont, CA-based LMA Consulting Group, Inc. and a manufacturing expert known for creating supply chain resiliency. “No matter whether they focus on strategy or organizational change, or require help with a technical topic, their success will tie back to how we incorporate the change with their culture.

“These clients realize that although it is important to cover the appropriate technical aspects of the change, the 80/20 of success comes down to how the change is implemented.  Therefore, it is the unique combination of people, processes, systems, and tie-in to strategy that brings it all together.”

Successful High-Growth Businesses Have Common Cultural Traits

According to Praveen Puri, the Strategic Simplicity® expert who helps build innovative organizations, there are three important cultural traits of successful, high-growth businesses.

“First, they welcome input and suggestions from employees, but then make decisive decisions. Second, they concentrate on hiring the right people, and then let them work independently in a low-bureaucratic environment, “ he said. “And lastly, they constantly work on improving their business by iterating small improvements and upgrading technology.”

Harness the Collective Genius of the Organization

Dr. Maynard Brusman, a consulting psychologist, executive coach and emotional intelligence/mindful leadership consultant notes, “The mindful leader who harnesses the collective genius of their organization is going to blow away the competition. Culture refers to how people think, act and get things done in your company. If your people continue to think and act as they do now, can you expect to achieve the results you need? If your answer is no, then changing your organizational culture is an imperative.”

According to Dr. Brusman, “Ineffective leaders show little curiosity about the ways in which cultural beliefs and attitudes affect performance and profitability. Employee accountability and engagement are the driving forces behind achieving great results. Employees become engaged when they can describe their role in outcomes and desired results.”

Dr. Brusman advises his clients, “By harnessing the power of culture, you can grow faster than your competitors, improving your value proposition and outperforming all previous metrics.”

Values are at the Root of Corporate Culture

“Every week there is another major news controversy where corporations have violated their corporate values and crossed the passions of their employees,” notes Jeff Skipper, CEO of Jeff Skipper Consulting and author of the 4C-S Strategy Accelerator. “For example, Google employees recently walked out to protest the handling of harassment incidents. Microsoft, Amazon, and Salesforce.com staffs have all petitioned to oppose the use of their technologies as instruments of controversial government policies.

“Values are the root of corporate culture. Even though they may appear dormant, values ignite strong emotional reactions when triggered by inconsistent actions. Wise organizations like The Salvation Army regularly revisit their value statements, asking tough questions about how well these statements match the changing make-up of their workforce. They use a deep understanding of values to drive decision-making and connect action with purpose and community,” according to Skipper.

“Getting values alignment right makes the difference between encountering resistance and  developing an engaged crowd of fans,” he added.

Culture and Brand are Closely Intertwined

Organizations must ensure their culture and brand values are congruent to be able to sustain long-term growth, according to Linda Popky, president of Redwood Shores, CA-based strategic marketing firm Leverage2Market Associates, and author of the book Marketing Above the Noise: Achieve Strategic Advantage with Marketing That Matters.

“Creating aspirational brand values is important, but if a company’s culture does not reinforce those values, the incongruency will be visible to both customers and employees,” she said. “For example, companies may tout being close to the customer in their marketing and branding, but if the culture reinforces cutting corners  vs. solving customer problems, that will become apparent to everyone very quickly.”

“Brands don’t create cultures—they reflect the culture that already exists. If the existing culture isn’t working, all the marketing in the world won’t fix that,” she added.

Focus on Beliefs to Develop Culture

“Contrary to what many people would like to think, culture is merely that set of beliefs which governs behavior”, said SAC Founder Alan Weiss, PhD. “Thus, if you want to stand out from the crowd, make sure your beliefs include excellence, autonomy, innovation, and service, and walk your talk.” 

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Last weekend, I went to Classic West – an amazing weekend of 6 classic bands at Dodger Stadium including the Doobie Brothers, Eagles, Journey, Fleetwood Mac, Steely Dan and Earth, Wind and Fire.  What a lineup!  Aside from amazing music and fabulous floor seats (which seated us 2 rows back from David Spade), we were able to meet up with family and friends as well.  Although I adore Journey, I have to say the best act of the weekend was The Eagles.  

This was the Eagles first concert since Glenn Frey’s sudden passing in 2016, and they made it a tribute to him.  Don Henley said he wasn’t interested in performing if Glenn’s son didn’t take Glenn’s place, and so he did.  He did an amazing job and sounded just like his father.  This sort of apprenticeship was clearly successful.  The Eagles also brought Vince Gill and Bob Seger to join their session.  

One tip to implement this week: 

Are you thinking about apprenticeships?  It doesn’t have to be as dramatic as an untimely death; there are many reasons you should be thinking many years down-the-line with your apprenticeship programs.  Or perhaps you don’t have an apprenticeship program at all?  As baby boomers retire, who will take over?  Does he/she truly have the breadth of experience you might be taking for granted?  

Often-times we don’t see apprenticeships except with professional trades.  Why?  I can see many opportunities for these types of programs at my clients.  Take a step back and think outside the box.  What type of training, education, mentoring and/or apprenticeship programs would be most effective at your company to ensure a smooth transition from the baby boomer generation to your remaining workforce?  It isn’t an all or nothing proposition.  Which roles are better suited to which programs?  

© Lisa Anderson

July 24, 2017

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The 80/20 of business success stems directly from leadership. The best leaders can make even the worst-performing teams excel and, unfortunately, the weakest leaders can drag down even the best of teams. A few questions to ponder include:

1. Does your culture encourage empowerment? Regardless of what you say, do people believe they will be rewarded for empowering employees?
2. Do your managers jump to answer questions or give their employees a chance to shine?
3. Do you communicate empowerment but would get upset if your employee made an empowered decision that created a month-end shipping crisis?
4. Do your employees understand the guidelines within which they can make an empowered decision?
5. Are you willing to live with and vocally support an empowered decision that doesn’t align with how you would have handled the situation?

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February 25, 2017

Earlier this week, I went on a tour of the Toyota North American Parts Center and had the opportunity to see the Toyota Production System techniques up close. It is always amazing to see that no matter how many millions are spent on technology (which I saw plenty of!), the key to success resides with the PEOPLE! That is one of the tenets of the Toyota Production System.

One tip to implement this week:
There is much that can be achieved rapidly in leveraging Toyota Production System techniques – no matter your industry or role. The idea is to capture the ideas of the people closest to the action – whether those interfacing with the customer, delivering to the customer, or producing quality parts on the line. And to empower them within reasonable guidelines for success. It sounds quite easy yet it rarely is achieved and sustained.

Start by putting together a group of colleagues to discuss improvement ideas. What can you do to make things easier and more successful for your customers? Can you add value without adding cost? What could you do for your colleagues who receive your work product? Are there ways you can be more efficient and safe? Or can you add clarity and visibility into the process? Just brainstorm ideas. Next you’ll pick one and get started.

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There is quite a bit of talk on culture in organizations; however, if you were asked to define your culture, could you? I think this question would give many executives pause to think.

In today’s work environment, all potential employees will discover what your culture is like when evaluating whether to work at your company. Since information is readily available on social media and in the news, there is no doubt if someone wants to understand your culture, he/she will. What will he/she find out? Is it what you’d expect?

I prefer my consulting mentor’s definition of culture — that set of beliefs that governs behavior. Ponder on this definition, and it becomes quite clear. Rah, rah speeches meant to influence culture are pointless. What really matters with this definition are those beliefs that influence what happens.

For example, I worked with a client who wanted to change from a culture focused on dollars to one focused on the customer. That was a tall order because dollars was ingrained in every person’s mindset. The planning group focused on orders of high dollar value. The production group would produce based on projected dollars shipped for the month. Of course, shipping would backorder customers based on getting the higher dollars out the door regardless of due date. Certainly, dollars were behind the beliefs held by all team members.

In order to successfully change to a customer-focused culture, the leader had to change these underlying beliefs. He started by revising the metrics. He no longer held people accountable for dollars. In fact, he didn’t provide dollars on any reports as they were not important; instead, he provided customer due dates. This really stressed out the masses for the first several weeks! However, by changing the focus to due dates, the culture started to shift.

This leader also held his ground with resistance — from employees, peers and with corporate. No one thought he’d be successful in the beginning since much of this culture was dictated by corporate; however, as he stuck to his guns and supported the culture with daily decisions, the culture soon started to turn. He also had to make an example out of people defying this new culture. One example went a long way as people took notice. The customer was #1.

In this case, the interesting result was that although we expected and experienced a slight decline in sales in the first month since we no longer were going to ship based on dollars as the #1 priority, we increased sales for the quarter. We were so concerned about the quarterly impact that we ran around in circles for years (which is NOT uncommon) when it had zero negative impact for the quarter.

Change the set of beliefs that govern behavior and you’ll change the culture!

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After leaving the work force as a VP of Supply Chain and Operations with a successful track record, I knew I could help executives improve business performance; however, I had no idea how to find clients. Thus, I immersed myself in the keys to success of starting a thriving consulting practice. I discovered that referrals were much more important than a “nice-to-have”; they would make or break success. Fast-forward 11 years, and I have built my business on this tenet – it is a relationship business. At least 95% of my business has resulted from repeat business and referrals.

What do referral sources want? Results. If I can help ensure success, they will bring me back – and tell all of their friends. Thus, although process and systems expertise is required, the key to success goes back to people – culture change, change management, and leadership.

Unfortunately, the best strategy or plan becomes useless if not executed effectively. If your team isn’t on board, you will not succeed. Similarly, if your customers and suppliers aren’t on board, it is not likely you’ll succeed. Similarly, if you communicate the plan but don’t involve people in the design, ask them for feedback, and give them the chance to try out new ideas, you won’t have long-term success. If you don’t address poor performers, your stars will lose their motivation.

Earlier today, I saw an amazing piece of technology and a substantial upgrade to warehouse operations. It expands capacity for growth, provides efficiency improvements, speeds up the process (shortens lead times) and provides a host of other benefits; however, it will be similar to hiding a new Maserati convertible in your garage if the people don’t come along for the ride. Remember to focus attention on culture change – and people.

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Since Halloween recently passed, I’ve been thinking of the value of tradition with your people. Yesterday I went to a client that has an amazing people culture, and although the people were committed to the important session we were conducting, they all wanted to go to the Halloween pot luck at lunch. It was a fun and vast tradition – my client said that grazing started right away and lasted all day. Everyone looked forward to it, and it has become one of the few traditions that is meaningful in their culture. I have to say the food looked amazing!

This morning, I went to my hair person, and she told me that they really enjoyed having kids in costumes parade through the salon for Halloween. Next, I went to Ihop to get some multi-grain pancakes with chocolate chips, and everyone there had very cool costumes. They seemed to be really enjoying the Halloween spirit, and the customers seemed to enjoy it as well.

My Dad also got flowers for my Mom every Halloween, and so this Halloween is bittersweet since he just passed away. I liked that idea of tradition, and so the last two years, I ordered her flowers from him as he couldn’t do that anymore due to his Parkinson’s. Nice to receive flowers for over 50 years every Halloween!

These types of traditions can pull people together. We are much more likely to collaborate with those we like and trust than anyone else. Do you have any traditions at your company? Can you create one? How about in your department? Or with your group? Silly and fun traditions can yield great results. For example, one of the groups I belong to had a bowling competition, and even those who are not bowlers enjoyed the competitive spirit. Another group (a women’s professional group) really enjoyed a cooking class and bottles of wine. Who wouldn’t? I got to know several of the women much better that evening. And they found out I attended because I value relationships and like to eat!

Be creative and think of ways to start or build upon tradition. There’s no need to spend money or ask for approvals. Find something that is enjoyable and would pull people together. Ask your colleagues for ideas. You’ll be surprised how a silly Halloween costume could have folks talking for days to come….

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