The Aging Workforce Challenge: How Remote Service Can Help Product Manufacturers

Manufacturers are faced with an unavoidable predicament today: Rapidly aging workforces, approaching retirement age -- with not enough younger, skilled workers to replace them.

Data from the Bureau of Labor Statistics speaks volumes on the major challenge:

Skilled professionals from the baby boomer generation (born 1946 to 1964) have already approached, or are nearing retirement age. Of the 76 million boomers in the workforce today, 19 million will be ready for retirement by 2011.
The following generations are not filling the skills gap fast enough. Given the retirement rates, and the smaller size of Generation X (41 million born between 1965 and 1983), it is estimated that there will be a deficit of 7 million skilled workers by 2010.

These soon-to-be retirees hold the deep knowledge of processes and technologies that are vital to the successful operation of the business. Once these employees are gone, their knowledge is lost forever.

The problem of retiring workers leaving with key knowledge is not new. In the book Lost Knowledge: Confronting the Threat of and Aging Workforce by David W. DeLong, he cites how the knowledge of building the Saturn 5 rocket that put man on the moon has been lost. It has come to the point where NASA confesses that, to go to the moon again, they will be starting from scratch -- all because of retirements and downsizing.

Granted most product manufacturers don't require rocket scientists to function, the skilled labor -- and the knowledge they carry -- is critical to maintaining performance for service equipment in the field, some of which are as old or older than the Saturn 5 rocket.

And as today's bleak economic forecast triggers concerns over reductions in new product sales, serving older products will become even more key for manufacturers to maintain sufficient revenue dollars. Service cannot be comprised, and needs to remain consistent -- if not, even more polished. This makes retaining the intelligence of yesterday even more critical.

Technology's Role in Instant Knowledge Transfer

In a research paper from Manufacturing Insights, an IDC company, titled "The Aging Workforce - Impact and Opportunity" (April 2008), this gap between retiring workers and younger workers is characterized as a knowledge deficit, and specifically recommends technologies that can help bridge the divide, and initiate seamless workforce transition. This is important information for industries, such as aerospace and defense, in which 25% of the workforce is eligible for retirement.

One of the technologies suggested is machine-to-machine (M2M) technology to provide remote service of equipment. Using this technology, a secure two-way connection is made between the manufacturing service provider and equipment installed at customer locations, enabling capabilities such as:

Proactive monitoring to prevent equipment downtime
Remote repair for problems that can be solved through configuration and software updates
Remote diagnosis to ensure that if field service need to be dispatched, they have the right parts and skills.

With a remote service solution in place, equipment up-time is increased, resulting in fewer field service visits to customers. This reduces personnel needs, and the need to hire new workers as older workers retire. Additional ways it addresses the challenges of aging workforces include:

Centralization of workforce skills. Expertise from the field is brought into central call centers where knowledge can be shared faster than amongst a distributed field organization.
Knowledge capture. Remote service software encapsulates historical expertise on diagnosis and repair of problems.
Workforce optimization. Less field service calls are required saving man-hours and fuel, part inventories are reduced by more accurate diagnosis.

Gerber Scientific, Inc., a provider of automated manufacturing systems for sign making, specialty graphics, and packaging, apparel and flexible materials and ophthalmic lens processing industries recently started a remote service initiative with the aforementioned benefits in mind. Mark Hessinger, the company's executive director of worldwide customer service, calculated a telling figure on the number of man-years of knowledge within the field service organization, and how it is decreasing with the increasing rate of retirement: New personnel can be hired but they will take one year to become effective in the job. Without a change in course, a rapid decline in workforce knowledge will occur within seven years.

With a remote service program in place, Gerber avoids the knowledge deficit with a seamless knowledge transfer, for both new and existing employees. The company optimizes the deployment of its field workforce, and captures expertise to streamline diagnosis and repair procedures.

As the years go on, and even more employees head into retirement, the challenge of transferring yesterday's intelligence to today's workforce will become even more difficult. Companies will need to be proactive in meeting this challenge, head-on. This means setting in place specific strategies and leveraging technology to prevent the major knowledge gaps that can cause direct sacrifices in the way business is conducted.

Brian Anderson is vice president, marketing for Axeda Corp. which provides the remote service monitoring and management capabilities for medical, industrial and high-tech manufacturers. Its software allows professional service teams to proactively detect performance issues in devices in the field, resolve them remotely, or gain detailed diagnostics to ensure a first-time fix when a dispatch is required. http://www.axeda.com/