Cisco Manufacturing Leaders

Tackling the skills gap with strategy (Part 1)

August 21, 2019 Cisco Manufacturing Leaders Season 1 Episode 1
Cisco Manufacturing Leaders
Tackling the skills gap with strategy (Part 1)
Chapters
Cisco Manufacturing Leaders
Tackling the skills gap with strategy (Part 1)
Aug 21, 2019 Season 1 Episode 1
Cisco Manufacturing Leaders

The skills gap isn’t coming. It’s already here. The good news is, every manufacturer has the opportunity to not only overcome this unprecedented shortage of skilled labor; but also take advantage of the opportunities that come with it to build a competitive edge. How is this massive shortage of unfilled manufacturing jobs impacting your profitability and company culture? In this episode, we’ll learn

  • What is the “skills gap”? And how has it evolved into a massive hurdle for the entire industry?
  • Why does tribal knowledge matter?
  • Leadership is an action, not a position
  • What does successful IT OT convergence really look like?
  • Nothing matters without security
  • Why is it so difficult to calculate ROI for investments that solve this challenge?
  • Can wireless help?
Show Notes Transcript

The skills gap isn’t coming. It’s already here. The good news is, every manufacturer has the opportunity to not only overcome this unprecedented shortage of skilled labor; but also take advantage of the opportunities that come with it to build a competitive edge. How is this massive shortage of unfilled manufacturing jobs impacting your profitability and company culture? In this episode, we’ll learn

  • What is the “skills gap”? And how has it evolved into a massive hurdle for the entire industry?
  • Why does tribal knowledge matter?
  • Leadership is an action, not a position
  • What does successful IT OT convergence really look like?
  • Nothing matters without security
  • Why is it so difficult to calculate ROI for investments that solve this challenge?
  • Can wireless help?
Speaker 1:

Hey everyone. Thank you for tuning in today to manufacturing leaders. This podcast is presented by Cisco and I'm your host Caroline Hila . I've created the show to help those involved in the manufacturing industry make better decisions for their business. My goal is to bring you the best industry knowledge and expertise that's available to help you understand the latest trends, best practices and more. Most importantly, I want to help you solve your unique problems and find new ways to gain a competitive edge. Welcome to manufacturing leaders

Speaker 2:

[inaudible] .

Speaker 3:

Today's episode kicks off part one of the two part series tackling the skills gap with strategy. So today I really want to focus on understanding what this problem really is, where the predictions are for the future, and also really help you understand who in your organization plays a critical role in overcoming this challenge. And don't forget guys, each episode has an associated blog posts that I will post on our manufacturing page and that link is in the bio for this podcast on. Be sure to leave a comment, ask questions, give us feedback, let us know what you like, and also let us know if there's any future episode ideas that you'd like us to cover. So what is the skills gap? And I want to mention too , it's referred to as many different things, skills, gap, aging, workforce, talent shortage, whatever you really want to call it. This is a massive shortage of unfilled manufacturing jobs and it's resulting in what we're now calling the skills gap. So this gap, what I find really interesting is it's really only widening now and manufacturers are now faced with a brutal shortage of skilled labor. And when I refer to brutal shortage of skilled labor, I want to give you some numbers to really understand what I'm talking about. So right now I'm referencing the Deloitte in manufacturing institute study from 2019 by the way, all of these sources are attached in the associated blog posts for this. So if you want to check out and read through the report yourself, feel free to. So, according to this report in the next 10 years, manufacturers will need to add 4.6 million jobs. What's crazy is it also reports that 2.4 million of those 4.6 million jobs are expected to go unfilled. Not only that, but today in the u s 500,000 manufacturing jobs remain vacant is , I mean this is an insane shortage. Um , how, how did we get here and why is it getting worse? But what we're really understanding is that, you know, we know manufacturing is a high tech industry with robotics, specialized software, AI, you name it, but young people don't view industrial manufacturing as a desirable career path. And that's just a fact . So what's really important to consider here as we interview our two experts is that this is ultimately a perception gap just as much as it is a skills gap. The last report that I want to share with you is the 2019 national manufacturing outlook in insights from lea global. More than 350 manufacturing executives participated in this study and they were all asked what their greatest expected barrier for growth in 2019 is and all of the answers really fell into these three main categories. 25% of the respondents said that profitability was their greatest expected barrier for growth in 2019 34% said competition in the largest percentage. 52% said labored talent shortage, so in other words, over half of the manufacturing executives that were surveyed are reporting that this labor talent shortage is their greatest barrier for growth in 2019 now I'd like to welcome our two guests to the show, Dan Melisko and Steve Ganson. Dan is the director of operations at Melisko engineering. He's a manufacturing automation professional with over 15 years of experience providing plant floor automation systems integration services and industrial iot and industrial iot consulting. Dan has a background as a control systems engineer who specializes in automation system architecture and industrial it . We also have Steve Ganson here today, senior business manager at Cisco responsible for building and leading the go to market strategies for the manufacturing industry. Steve Brings over 28 years of experience helping organizations rethink the way they do business with a focus on globalization and business transformation. So thanks again, guys for coming on the show today and let's go ahead and get started. So Dan, can you tell me how you've experienced this problem and why it is so important to solve right now?

Speaker 4:

Yeah, really good question. Um, so in our experience, we'll , I'm a , I'm a systems integrators , so , uh , we get to see all kinds of different clients , uh, in , in various industry verticals. And so what, what I've seen kind of over the years , um, has been everybody's trying to do more with less. Um, and in my career I've, I've seen engineering departments completely downsize . I've seen everybody moved to very lean operations teams , uh, tightening budgets on operating budgets, capital budgets. Um, so really the kind of that theme of everybody's doing more with less. Now you have a workforce , uh, who is getting ready to retire. Uh , they still remember how things were in the heyday. They still remember when there are plenty of resources. There was plenty of money to throw at capital projects and you know, improvements, continuous improvement projects. Not to say that those don't exist still today. Um, but certainly there were around in a time when , uh, maybe the teams were , um, a lot more complete. Um, and today you have new people coming into the workforce who maybe don't have as big as teams to work with. So again, everybody's being asked to do a lot more with less. So I think the problem is, is we're losing a tremendous amount of tribal knowledge , um , and it's not just tribal knowledge on the technical, it's the cultural why were things done the way that they were done. Um, you know, and the, and the technical , um, in terms of, you know, how are they done? So I think we as a , a systems integrator, we need to figure out how can we leverage technology to help solve these problems.

Speaker 5:

Definitely. And something that really stuck out to me there is, when you mentioned tribal knowledge, can you explain a little bit what you mean by that?

Speaker 4:

You Bet. Yeah. So when I'm typically, when people think about tribal knowledge in my industry, we're talking a lot about the manufacturing processes themselves. So , um , you have a lot of operators, maintenance technicians , uh , people who, you know, like I said, back in the Hay day when we were maybe just starting to automate these processes , um, a lot of those people had to know the process manually and they had to be , uh, have deep, deep domain expertise in how their actual machine works . Uh , now as these systems became more and more automated , um, you know , maybe people start to take that for granted. Um, you have a brand new workforce that comes in and they're used to , uh , using technology in their daily lives. And maybe there are a lot more elements of the systems that are automated. Um, it's that tribal knowledge I'm talking about. So how can I , uh, fix the problem if I don't even know , uh, remotely close to what the root cause could be? And so I think some of the exiting workforce has a lot of that experience. So that's the more of the technical and kind of that cultural, tribal knowledge is more like why were decisions made , uh, to do things a certain way. Um, and just understanding that and that just helps people make better decisions.

Speaker 5:

Absolutely. Yeah. That's a , that's a really good point. And I'm curious to understand, to Steve, something you mentioned is that we have this entire new generation coming into the workforce, but it's really made up of multiple different generations that we've never had before. Can you talk a little bit about that?

Speaker 6:

Yeah, so it's really interesting, Caroline. You know, we, we tend to find ourselves in a discussion that says, you know, the, you know, the, the workforce that's retiring, that silent generation or the baby boomers, and then we say, and there's this new generation coming in when in fact it's multiple generations coming in. You know, like I said , from a , you know, from the millennials to Gen z to the Gen excers. Um, you know, it's really interesting because you know, to back up a little bit when we were talking about, you know, the, the sense of urgency on why we need it . You know, when you, when you think about two fifths of manufacturing companies say that they have a 20% annual turnover. That's because of what Dan was mentioning a minute ago. The , the , the tribal knowledge of people that fix the machines with instinct and just knowledge of, oh, that motor is running hot. I know what I need to do next. What's, what's amazing is these millennials and Gen Z is , if we can harness their , their , um, their techniques , they're mean. They're a technology savvy generation that grew up with cell phones in their hands. They're creative and they're not afraid of doing things differently. It's that, it's that disruptive thinking leads to technology disruption and it's so important to do now. We have to do it right now. We have to start moving in that direction. What , you know, before we find ourselves in a situation where it's a little bit too late with the , with the retiring happening faster than we thought.

Speaker 5:

Definitely. So Dan, do you see then a clash between the new generation coming in who's not afraid to push boundaries in combination with the current workforce that's phasing out that's, you know, really set in stone with doing things, how they used to be done because they have so much tribal knowledge. How, how do you see that playing out on a day to day basis?

Speaker 4:

Okay . Yeah. So this actually happened fairly early in my career when, when we were starting to move and my first job out of college I was working as a production supervisor , um, and they were moving to more automated systems and the operators and maintenance technicians , uh, were expected to have a higher level of knowledge , um, and being able to troubleshoot just using of computers in general , um, that was starting to become more and more of a skill , uh , versus just standing at a line and pressing a button. Um, but you have a younger generation who comes in and they are already savvy with a lot of that technology. Um, and maybe you have the , uh, the workforce that's used to doing things the old way. Um, yeah, there , there can become a rift where, you know, there's a thought of, well, you know, the more automation that comes in, the more technology that comes in. It's just replacing jobs. Um, you know , whereas you have a , a , a newer generation who's coming in and they want to embrace technology. They want to use the more information at their fingertips to make better decisions, so on and so forth. So you can have a little bit of conflict , uh, when you have those two generations coming together. But on the flip side, you can also have them work together. And I think a lot of that , uh , has to do with setting the tone at the top. And that's where the companies that we see who are successful, they typically have a strategy around some of this stuff.

Speaker 6:

If we think about, you know, where we need to get manufacturing, so we need to get decisions made more automatically, we need to bring data to the edge. We need to make decisions quicker. It's almost like, I mean if you think of the application of ways, I mean that was, there was a group of people that decided to take disparate pieces of technology and solutions that already exist. A plant floor is no different than machines already exists. The process exists. You know the supply chain exists, but with ways, what did they do? They didn't invent the Internet. They didn't invent location based services. They didn't invent, I don't know, maybe Google maps, whoever they use, what they did invent is a methodology to make real time decisions based on real time data. If I'm going down the highway, driving from Detroit to Chicago, something happens in front of me. I now an informed become informed of that action and I can make a reaction based on NSA. Okay. Ways of suggesting I go around or I do something different. Manufacturing is no different than that. It's that it's the tribal knowledge of the workers that have been there for decades that know they know the destination. The destination is, for example, Chicago, but some of these more tech savvy engineers, the younger generations coming up can show us a lot more efficient ways to get there. That's kind of the analogy, Caroline, that's always on my head, if that makes sense.

Speaker 5:

Yeah, no, that makes a lot of sense. I think that's a really good analogy. I honestly, I use ways almost every single day to get to work because sometimes there's a road that's closed and I have no idea about it and it'll save me 20 minutes just to get to the office. So that's a really, really great point. And I'm really curious to understand too . Um , Dan, from your perspective, when we're talking about the convergence of it and OT, how much of that is really a physical convergence in terms of the network and also just a cultural convergence in terms of how the organization operates?

Speaker 4:

That's a really interesting question. Um, in terms of the, the physical convergence , um, I think that it , OT , it's kind of always been , um, an issue where the OT people have their own stuff, the it people have their own stuff. Um, and I've heard many, many times in my career that, you know, it departments, they don't like to concern themselves with the stuff on the other side of the firewall because they don't understand it. Um , and on the flip side, you have those t people , uh, who they don't want its hands in their systems because they're afraid that somehow they're going to roll out some patch update that's going to take your system down. Um, so that's pretty inherent in most places that we go into. But again, the successful ones , um, again, tone is set at the top. You may have a digital strategy on how am I going to start leveraging all these technologies on the plant floor , uh , and get more machine data out of my assets, make better decisions. Um, the ones who have and can articulate , uh , what their digital strategy is. It really helps it and OT start to converge. Uh , culturally just not, not just system wise, not just taking the it people are going to be more involved on helping manage the OT systems. I mean, I think that is something that , uh, we're seeing more and more and I think is actually really beneficial to the OT departments when it can help start managing. But it is that, that cultural side to understand from the top. Um, this is our strategy and this is how the it departments , um , we're not there to screw up your process. They're not there to cause you more issues on the floor. Uh , they're there to actually help. They're there to actually enable you with a lot of these enterprise technologies that have been around for a long, long time. And we're going to start to bring them to the plant floor. Um, and I think what you end up with is yes, the technological convergence but also a cultural convergence.

Speaker 6:

And , and on top of that, I think what's, you know, cause it, it wasn't that long ago and in some customers it is still the Cold War, you know, I between it and OT, but, but you know, the thing that is really been an accelerant to bring them together is security. Now let's talk about that for a second. Um, you know, it when there's a, when there is a breach on the plant floor, it is very different than when there's a breach in it, I should say OT versus it or whatever, whatever you want to call it. Um, but , but, but the, but I t absolutely owns that. You know, so when we started , the one thing that has really helped us bring everybody together in the same room and even at the same table is to start that conversation around security because we can do nothing on the plane floor. We can automate nothing. We can, we can, we can , uh, um, when we want to give IP addresses for things on the plan for that are going to shoot up to a database, we can do none of that with a security blanket wrapped around this thing. And that's what, to me, that's what I've seen bring a lot of these organizations together.

Speaker 5:

That's a good point. And I'm curious to hear too, Dan, from your perspective, how different is the viewpoint on security if an it person is looking at it versus an OTM? I'm kind of assuming that they have very different perspectives on it. Um, can you maybe describe, do you have an example of that or any thoughts on that?

Speaker 4:

Yeah, so I mean, security , um , it's inherent in every project that we do. Uh , on the OT side , uh, when we're put either upgrading a system or putting in a new system, but historically , uh, the security on control systems automation systems, it's actually fairly open. Um, because you needed the operators, the maintenance technicians, the people who needed to do what they needed to do to get into the systems and fix them or get into the systems to , uh, you know, get to the next phase of a particular batch. They need to be able to do it quickly. And so these systems out of the box, we're pretty wide open or you might even have , uh, the, the old operator one is the username and operator one is the password. Um, and that's rampant throughout our industry. Uh, you could probably go out into any plant , uh , and figure out at least a couple of , uh , terminals where it's his default username and password just to get in. Now from the IP perspective , uh, a lot of times they're not even aware that that's an issue. Um, but the moment that you do make them aware, they're like, wow, we need to try to fix that. Um, the good news is is that , uh, they can help influence , uh, what technologies get rolled out to start to pull some of those , um, those systems, those islands , um, into the IPO , but the overarching security strategy. So , um, it's one thing that we always like to bring up. Um, part of the IPO t issue is that it just isn't aware of what's down on the plant floor. One of the things that we try to do is we try to help the IT departments understand a little bit more about operational technology and demystify everything that's out there. Um, and normally we do find that they , they see in us an ally that can kind of speak both languages. Um, and that, and that kind of helps bridge that gap.

Speaker 5:

Definitely. So do you think that Dan, that OT is really brought to the table enough when it comes to making these decisions?

Speaker 4:

You know, and that that is an area that I think needs improve and kind of going back to this loss of tribal knowledge. Um , if we're trying to improve our processes and we're trying to do more with less, it is those people that are out there that have been out there for years and years and have seen the processes, the , uh, evolved over the years. They're probably the ones who can have some of the biggest impact on some of the digitization strategies because they understand the why. Um, they've kind of been around for the cultural changes. Um, and, and I think that if there's one thing that I could see happen better is that a lot of times these, most of the time these digital strategies, they start on the it side or they start with the CIO. Um, if they were to start to look at involving more of the operations people and try and understand how, how do you do your job, what tools might you need to do your job better? Um, I think that they would find that the it departments could be providing better service to those users. Um, but again, it's just an awareness thing and the OT people maybe aren't even aware of the types of things that the it departments are doing. So it really could be a , an enabler to bring more of the operations people to the table when talking about , uh, itse convergence.

Speaker 5:

Definitely. That's a, that's a really good point. And Steve, I'm really curious to hear to your perspective on this entire journey overall. You know, from what I'm hearing from Dan and from you as well, like this is not really a one week problem solved plan. It's , it's really a journey more than anything. So where would you say it's most important to start, Steve?

Speaker 6:

Well, you know what? It feels to me like we really need to start with leadership. You know, we mentioned earlier that leadership is an action, not a position, right? They have to, you know, the, the, the it and OT and the corporation itself, you know, I mean at , at the board of director level, you know, they need to make a decision maybe on where they want to be in five years, 10 years, 15 years. Not necessarily from a technology standpoint, but technology will be the driver to get them there. W I mean, without a question, they , they have to start with a plan. They have to execute on that plan. But, but they also have to realize that, that that plan is going to shift both in speed and direction. I mean, they have to be nimble enough to say, okay , well the industry is now going left and we need to go. Right. You know, or I'm sorry, no, we need to go left. So they're wrong. But they, they need to stay with it. They need to be, you know, data-driven businesses. They need to be nimble technology companies. Um, so that's , that's where they have to start with that vision and that plan. And they have to just stick to it. There was, there was a company I was working with not that long ago. They started their journey 10 years before it actually started to pay off and now it's paying off in dividends, but they stuck with it at the board level. They said, we can't quit. We know that that, for example, if we put a thousand in a either net switches on the plant floor, the ROI for that is zero is zero. We're going to spend millions of dollars enabling the plan floor. And then in the next we start to bring that to the edge. We start to bring that to the cloud. We start, we start making decisions on that data. But , but if you looked at every project and said, what's the ROI? Oh, I'm sorry. It's not good enough. We quit. Then you're just too shortsighted . You have to, like you said earlier, it's a journey and it's a marathon. So it takes commitment.

Speaker 4:

And I, and I think too , uh , yes, the vision, it starts with leadership. Um, but I kind of go back to your ways . Example, a really interesting app. But if you think about , uh , I type in a destination, well how does it know how to get to that destination without knowing where you currently are? So you need to know where you are right now in order to map out how the heck you're going to get to that destination. So , uh , that's where I think kind of back to what we were talking about before with getting the operations teams involved. Um, that's a lot of where we work. So when we're out on the plant floor and work, we're actually looking at, okay, how are we going to align , uh, the technology, the various solutions that are out on the plant floor? Uh , how are we gonna make sure that aligns with the longterm vision? And then a lot of times that starts out with just very basic assessments, looking at basic things like network hygiene and basic network security , um, you know, and, and then things that, again, once you make it aware of them, they're actually there to help. So I , I think a big part of the where to start is just starting with the basics. Just understand what it is you have. What is, what is the current state of my plant or my manufacturing facility?

Speaker 5:

Definitely. And where do you see wireless playing a role in to this? Um , you know, Steve, you had mentioned you can install all of these, you know, ethernet switches, but then at the same time the ROI from there, it's, it's much further down the line and how it's really integrated in how you use the data. So I can, I'll start with Steve to answer this one and then I want to hear to Dan your perspective. Where do you see wireless playing a role in all of this?

Speaker 6:

Well, here , first of all, wireless is the future for manufacturing. In my opinion. The, the, the apps and the technology that are being driven , um , by the plant floor are going to require it. You know, when you start talking about machine health and motor health and remote experts , uh , wireless is absolutely key to that. It needs to be robust enough because, for example, you know, let's , let's talk about remote expert. You're a manufacturer and you have a , a new machine you bought from Italy or worse , more accurately, an old machine you bought from Italy. Uh, the tribal knowledge perhaps has left your plant. They've retired and that machine goes down and it's a critical machine. It's a filler or a bottler or whatever. It is very critical to your, in fact , it took the line.

Speaker 4:

Okay ,

Speaker 6:

so what's next on your list of phone calls is the machine builder in Italy to say we need help. We are down at, you know, $50,000 an hour or whatever that costs and they have a couple of scenarios they can play out. They can, they can put someone on a plane and parachute them in the day after tomorrow or they can get online with a remote expert and you put your, your , you're a Gen z person out there at the machine with Google glasses, a computer on their belt. They're the hand and the headset. They're the eyes and the ears and the hands of that machine builder in Italy in your backup and running in two hours. Right there is where the rubber just met the road and all of a sudden the game changed for that manufacturer. That's where that, that investment in the wireless technology just paid off times 10. Yeah, that's a, that's a great example. And Dan, do you have any thoughts on that as well in terms of where you see manufacturing or sorry, not manufacturing, where you see wireless playing a role in all of this?

Speaker 4:

Yeah, absolutely. I mean, one of the, where we see wireless a lot right now, one of the typical use cases out on the plant floor , uh, operators, maintenance technicians, production supervisors, they want to be able to take their, what has always been their fixed HMI human machine interface, their operator terminal, and they want to be mobile with it. They want to be able to walk around the plan. And Steve's point, I want to stand in front of a motor and I want to be able to troubleshoot it and have the view into the , uh, the automation system , uh , right there in front of me. Uh, the newer workforce, the younger generations that are coming in who are very, very tech savvy. Um, part of the reason is just because they enjoy working with their technology. Um, and like the ways that, that when I'm, when I'm out there , uh, driving , uh , on ways I become a sensor, I'm inputting things into the system , uh, that are benefiting other people. Uh , I could see that also happening within the plant and there are actually are applications that are built to help people in plants , uh , collaborate better where you are constantly speeding input into the system, but you have to make it fun. You have to make it enjoyable and it is wireless that's going to be able to enable all of that. Is this something that we really haven't touched on much here? Um, but I see a big theme , uh , in order to solve some of these problems is this consumerization of the enterprise making the, making production, making the plant floor, making manufacturing feel more like the apps on your phone. You actually enjoy working with them and it , it is the wireless infrastructure that allows you to do all that .

Speaker 1:

This concludes part one of the two part series clapping the skills gap of strategy. Part two we're going to explore understanding where to start, what are the steps on your journey, and what kind of questions you need to ask yourself to get there. Thank you guys again for listening and if you'd like to learn more, visit us on our website at www.cisco.com/go/manufacturing where you can see our podcast series on the home page and feel free to use our blog page to also leave feedback and ask questions. Thanks again for listening today and be sure to check out our next episode on manufacturing leaders.