Closing the skills gap: is automation the answer for electronics manufacturers?

By Mascha Tamarinof, Global Vertical Lead B2B at Valtech

Manufacturing businesses continue to highlight a skills gap in their workforce. With fewer young people taking apprenticeships and other forms of vocational training after school, the industry has been left struggling to fill jobs and maintain productivity. And the data is proving it.

Thirty-eight percent of manufacturing leaders have agreed that one of the main external threats to business is a skills shortage, from finding skilled people to training them (Valtech’s The Voice of Digital Leaders in Manufacturing survey). Over a third of manufacturing leaders are missing personnel or skills according to a Gartner Peer Insights and Valtech study on manufacturers’ digital transformation. 

What these findings tell us is that there’s work to be done in getting the manufacturing workforce up-to-speed with the right capabilities to remain competitive. Faced with rapid digitalisation and a technology boom in a post pandemic world, speed is of the essence, especially in the electronics manufacturing industry. 

If they cannot match this pace, manufacturers not only limit their ability to retain expertise, but also their ability to pave the way for innovation in terms of what they deliver back to customers, from both a product and customer experience perspective. Finding time and funds to support internal training schemes is a clear problem. So, what can they do to make their workforce better enabled?

Is automation the answer? 

Automation and AI often have negative connotations in the manufacturing space. Understandably so, the initial wave of automation that hit the manufacturing industry threatened jobs, with the UK’s Office for National Statistics reporting that up to 60% of metalworking machine operatives were at risk in 2019. So, assumed to be replacing humans in the workplace and taking away jobs, employees now regard the adoption of new technology of this kind tentatively.

However, when automation and digitalisation is viewed not as a replacement for human input but as a support, these technologies could transform the industry. One key aspect of electronics manufacturing which could benefit from AI and digitisation is supply chain support. Recent statistics from Gartner have found that 95% of manufacturing companies will have failed to implement ‘end-to-end resilience’ in the supply chains by 2026.

Currently, most supply chains use a ‘person to goods’ element, relying on employees to carry out repetitive tasks to ensure the supply chain runs smoothly. Implementing an AI and digital element to the supply chain will remove much of the uncertainty associated with these processes and provide predicted variability, driving productivity across the workplace. For example, an AI solution – such as intelligent document processing – can help streamline document processing, turning unstructured information into data in real time. The common paperwork bottleneck experienced across manufacturing companies can be eliminated, freeing up employees from tenuous tasks so they have more time to upskill.

Companies are also seeing an opportunity to streamline and automate processes in the sales and transaction phase, giving more self-service options to clients. Customer portals are often the environment that brings together all these elements including self-service, ecommerce and digital services. Using these, businesses have been able to eliminate cumbersome and repetitive tasks for salespeople, significantly decreasing the margin for error and freeing up employee time which can be put towards more valuable tasks such as consultative selling around larger purchases. 

The use of automated technology, alongside digital tools, could in fact be the key to the skills shortage. By passing over jobs, which do not require human intervention, to new technology through digitisation, skilled workers become more available to concentrate on activities which add real value, ones which can’t be replaced by technology. 

Upskilling and internal training

So, how can automation be reframed as a solution to the skills gap? Recent research has revealed the extent to which the new generation of employees in manufacturing actually value training and progression. According to a study carried out by The Manufacturing Institute’s Centre for Manufacturing Research and the American Psychological Association, 69% of employees in the industry younger than 25 said they would stay at their current employer because of upskilling and development schemes. So, to retain talent, employers need to invest in internal training.

Many large manufacturers are also dealing with a significant outflow of skills and knowledgeable employees who are reaching pension age. Therefore, in order to pass on these crucial skills to the younger workforce, businesses need to act quickly to fill the widening skills gap.

The good news is that industry leaders are working on this. Despite weakening business confidence in the economy in recent months, data suggests that internal training is still a valued investment. A recent MakeUK survey found that 44% of manufacturing companies have increased their internal training budget for the coming year. 

According to PwC forecasts, many companies are also investing in delivering training through AI and the metaverse. By delivering this training in an engaging learning environment, they can expect productivity and efficiency to improve, resulting in reduced waste materials and resources.

In the middle of a skills shortage, companies need to evaluate which employees have the time to access such training. Automation can free up time by cutting out manual tasks. This also gives employees more headspace to dedicate to their development. 

What the future holds…

As one of the digital leaders from the upcoming 2023 Valtech report “The Voice of Digital Leaders in Manufacturing” mentions: “Digital allows us to increase productivity without adding headcount.” Overcoming the skills gap isn’t about treating humans like a lost cause. Quite the contrary; it’s about expanding the role they have in the business to foster innovation. But most importantly, it’s about investing in employees to drive better business outcomes. 

There is little doubt that companies of all kinds must invest in their digital capabilities. Getting all department leaders to say goodbye to outdated systems and replace them with new, future-proof technologies is the first step in becoming a truly digital enterprise. This internal alignment is paramount. Then, when implemented correctly with leadership’s buy-in, these new systems and ways of working can improve workflows, training processes, and even the energy consumption of factories. With automation largely acknowledged as a worthwhile investment, it could be a justifiable solution to closing the skills gap. 

With a new generation of highly skilled employees across the electronics manufacturing industry, innovation becomes the real winner. They can innovate new product lines, prospect engagement strategies, and much more. In turn, this benefits the customer. With a better experience at their fingertips, they’ll feed loyalty and revenue back into the business. So, don’t isolate training as an employee issue; it impacts the customer too.