Why digitalization is not the answer to the manufacturing value chain
This article has excerpts from a virtual chat with Mr. Jagmeet Singh, CEO, Axestrack. Axestrack is an Indian logistics business with over 110,000 commercial vehicles and a presence in more than 100 cities. Jagmeet is an automobile engineer, a Stanford business graduate, a global leader, and a tech-enthusiast. He was a partner of Cognizant’s digital business consulting, R&D engineer with Reva-India’s first electric car, and a growth leader with Infosys Consulting.
COVID-19 HAS REVEALED THE VALUE OF HUMANS IN MANUFACTURING
For years, companies have been increasing the adoption of automation to reduce dependency on the workforce and realize the benefits of cost, speed, accuracy, agility, and safety. However, time and again it has been proven that humans will continue to remain important in the manufacturing sectors in different degrees for years ahead. Workforce unavailability at the sites because of the precautionary measure of stay at home during COVID-19 has brought material handling, material movement, and manufacturing to stop or to slow down. While most of the companies might be mulling over new digitalization initiatives, the criticality of humans in the manufacturing value chain cannot be undermined. COVID-19 has revealed this truth.
According to Marketplace.org, roughly 6.6 million of the workforce in the USA has lost jobs. Walmart has hired 100,000 workers who have been displaced from their regular work and needed income to survive. The situation on the other side of geography is no different. In India, highly skilled migrant workers have been moving back to their native towns and villages after exhausting their savings and sources of income. More than 30,000 drivers in over 350,000 stranded trucks on the road have abandoned the trucks with the goods in it.
A part of the workforce may return to their jobs. Another may deliberate whether they should switch over to a different livelihood like getting into the essential services sector which provides job security amid a disaster like this. The gap created by a non-returning workforce could impede the return to normal for manufacturing companies.
According to Jagmeet Singh, digitalization is not the complete answer. While it helps achieve operational efficiency, it makes us forget the value of the human element in the supply chain.
Singh highlighted the scenarios where the absence of workers has halted material handling and movement, shop-floor operations, and so on. When asked about his views specifically on the road-transport that is about to open up, he mentioned:
“As per research by Nomura, road transport constitutes around 30-40% in the USA and China and around 50-65% in the developing countries. One has to think about opening the entire ecosystem including the gas stations, repair shops, food joints, rest areas, etc. along with opening up the highways. Employers need to educate the drivers on the safety norms and should be given assurances that they would be taken care of if stranded”.
GOING BEYOND CORPORATE SOCIAL RESPONSIBILITY TO CORPORATE SOCIAL OWNERSHIP?
Thousands of workers battling for basic support reflect the limited outreach of the CSR initiatives. Manufacturing companies need to take ownership of the workforce beyond the workplace. There are four key steps for companies to achieve this.
· Basic financial support: It is essential to arrange for financial aid or soft loans to help employees fulfill their basic obligations. Companies can carve out funds by reprioritizing the spending in other non-critical areas. Companies can collaborate with the government to provide insurance cover to the workforce.
· Restructure operations: Operations must be restructured in manufacturing sites, in line with the COVID-19 guidelines. The safety of the workers must be prioritized by providing protective gear, sanitizers and education on safety norms. Workstations and sites must be redesigned to reduce the density of the workforce at the worksite. Companies must also arrange for the transportation of the migrant workers back to the manufacturing sites as manufacturing resumes.
· Vocational training: Self-learning technical videos in various languages that workers can watch on their smartphones to get acquainted with new work skills, eventually opening new opportunities for them to return to work.
· Encouraging employees to support each other: Companies must urge their white-collar employees to guide blue-collar employees in their respective departments and participate in activities that can support them in their crisis. If required, companies can provide for special leaves for this cause. Blue-collar workers tend to have a longer term at the company than white-collar employees. Companies have now have realized the importance of these employees and must put in efforts beyond regular CSR to strengthen the commitment of the blue-collar workers towards the company.
In essence, companies must realize that humans are an essential link to the manufacturing value chain and take ownership. Manufacturing organizations have the complex task of protecting their employees against such disasters in the future and digitalization may not be the immediate and right answer.
About
Joy Prakash Somani has more than two decades of experience on the shop floor and across various functions of the supply chain.
https://www.linkedin.com/in/joy-prakash-somani-6464a42/
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