Digital Technology Helps Manufacturing Work Better in All Environments

Modern IT Addresses the Talent Gap and Drives Efficiency, Engagement and Financial Results

Fortunes can change quickly in business. And manufacturing is no exception.

Just last year industry analysts and media proclaimed that manufacturing was alive and well – very well, in fact. The Brookings Institution wrote that "manufacturing is enjoying a resurgence in the United States." And Deloitte, in its "2019 Industrial Manufacturing Industry Outlook," said the sector "is firing on all cylinders," with output humming, capacity utilization up, and many manufacturers delivering solid performance and shareholder returns.

But, as Deloitte notes in its "2020 Manufacturing Industry Outlook," the sector is now slowing due to the growing risk of a downturn in global manufacturing. In August the U.S. global purchasing manager's index (PMI) dropped to 49.1 – its first below-50 reading in more than three years. As a result, Deloitte adjusted its growth forecast downward.

Despite this change, recent reports indicate the skills gap is an even bigger and more immediate problem for manufacturing. The National Association of Manufacturers said there were a record 522,000 jobs open in the sector as of September. The tight labor market and difficulty in attracting young workers make talent both a near- and long-term challenge for manufacturing.

Digital technology – Brookings, Deloitte and others agree – can help manufacturers address the talent challenge. Such technology also can lead to higher-quality solutions, lessen human error, improve processes, increase productivity and contribute to greater growth. That’s true on the production line, in maintenance, research and development, and office service and support.

Using Outdated Technology Is a Business Killer

Meanwhile, relying on outdated technology can really gum up the works. It can adversely affect manufacturing employees' experience, productivity and safety. Plus, it can limit manufacturers' efficiency and ability to hire and retain the most qualified employees.

Research indicates 44% of workers at technology laggards are frustrated with their employers because of technology. Those workers also are more than 500% more likely to be frustrated. Actively disengaged employees cost the U.S. $483-$605 billion annually in lost productivity.

Some workers become so frustrated with their technology-laggard employers that they quit. Our research with Loudhouse indicates that employees who work with outdated technology are 600% more likely to consider quitting. Another survey suggests that 10% of workers have left a job over technology frustrations.

Employee turnover can be costly for manufacturers. Every time a business replaces a salaried employee, it costs six to nine months' salary on average. And finding suitable replacements can be challenging with today's low employment.