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Digital transformation requires upskilling and reskilling

Manufacturers undergoing digital transformation must address workers' skills gaps, but new technology shouldn't be imposed from above without early input and buy-in from workers.

As more industrial companies undergo digital transformation efforts, the need for upskilling and reskilling workers becomes more critical.

For digital transformation efforts to be successful, organizations need to help employees transition to a new way of doing things, said Vanessa Akhtar, principal at Kotter International, a firm in Cambridge, Mass., that helps companies deal with change management.

Upskilling is defined as helping workers adapt their more traditional skills and capabilities to modern technologies that underpin digital transformation efforts, while reskilling provides the employees with new skills, according to Akhtar.

Vanessa AkhtarVanessa Akhtar

Part of the effort in upskilling and reskilling a workforce is to provide employees not only with technical knowledge but with skills that will help them deal with continuous change brought on by digital transformation such as adaptability and collaboration.

"We know the world's going to look different in the years ahead, so [organizations] will be best served if they can build in training and capability-building around change," Akhtar said. "That's a skill that people will always need."

The issue of a skills gap caused by the introduction of more automation and AI in the workforce has been apparent for several years. A 2017 report from the McKinsey Global Institute found that by 2030, 14% of the global workforce -- as many as 375 million workers -- will need to change their jobs or acquire new skills due to automation and AI. In a recent McKinsey Global Survey, 87% of respondents who identified as executives said they are currently experiencing or are expecting workforce skills gaps in the next few years. However, fewer than half said that they have a clear idea for dealing with the issue.

Some forward-thinking companies, including Stanley Black & Decker Inc. and Schneider Electric, have been implementing upskilling and reskilling programs to address skills gaps that have come along with digital transformation efforts.

Performance-based upskilling

The tool manufacturer Stanley Black & Decker is undergoing a digital transformation that's resulting in major changes in how it operates its manufacturing facilities. Stanley Black & Decker, headquartered in New Britain, Conn., has more than 100 facilities worldwide all at various stages of digital maturity, said Sudhi Bangalore, global vice president of Industry 4.0 at Stanley Black & Decker. Some are legacy plants with very little automation while others are advanced facilities with cutting-edge technology.

Sudhi BangaloreSudhi Bangalore

Beginning in 2016, the company has been working to create a connected enterprise that uses industrial IoT (IIoT) technology and software systems to connect industrial assets, workers and processes, along with an automation system for the industrial assets, Bangalore said. The connected enterprise system is built on a Rockwell Automation platform and technology from PTC, and the automation systems are primarily driven by Rockwell Automation and Panek Precision.  

"We consider ourselves to be legacy industrial, but we want to be among the top-performing innovation companies, which includes the way we innovate our products and serve our customers," he said. "But equally important is how we build our products and support the people that build our products."

Critical for the success of the digital transformation is an upskilling and reskilling program that will eventually involve all of Stanley Black & Decker's 61,000 employees. The program involves advanced technology such as augmented reality based on-the-job training. But technology is only a part of the process, Bangalore explained.

"We want to see and show what performance is possible from a human perspective, and then enable new career paths by training them with the right type of technology," he said. "For example, how do you interpret data and be data-driven, but it's also about collaboration. Everything in the world revolves around how you can better collaborate with people sitting next to you, which now is probably remote."

Implementing the technology that connects systems and assets is important, but more important is enabling the workers in legacy plants to understand the possibilities that the technology allows, Bangalore said. It's about putting people in the right places to embrace the technology, rather than putting the technology in place first and having workers adapt to it, and the company relies on enthusiast and early adopters to guide the way.

"We want to ensure that we have the right people -- we call them plant champions -- working with the larger factory workforce," he said. "We identify who those people are that can help be the propagators of change with people in technology, and then enable all of these aspects of automation, connected factory, apps and analytics on top of that."

Legacy factory to smart factory

Schneider Electric is helping companies in a variety of industries undergo digital transformation with its EcoStruxure platform and services. EcoStruxure is an IIoT-enabled platform that allows industrial facilities to automate processes and operate more remotely, according to Luke Durcan, Schneider Electric's director of EcoStruxure.

Luke DurcanLuke Durcan

In 2019, Schneider Electric, headquartered in Rueil-Malmaison, France, launched a smart factory in Lexington, Ky., to demonstrate how companies can improve efficiency and reduce operational costs. The facility is an old factory that was modernized with EcoStruxure.

Companies are trying to increase capacity from their facilities while improving resiliency, with a lighter workforce that now has to work more remotely because of the COVID-19 pandemic, Durcan said.

"They're trying to manage facilities with less interaction, fewer people going in, but also upping the resiliency because if you pop a breaker off or blow a transformer, you're losing two months of capacity which you really can't afford to lose," he said.

One of the key elements to ensuring that industrial digital transformation is to upskill and reskill workers who need to negotiate their way through new processes and new technology.

"In the Lexington [smart factory], we've seen a definite shift in the mix of skills required in these factories and smart facilities," Durcan said.

Companies need to get modern tools into the hands of key experienced workers and give them the support and the flexibility to adapt the tools to their specific needs and requirements, Durcan explained.

"When we talk about digital transformation, we talk about C-suite support and having a good strategic plan -- and that's all important," he said. "But it's also important to make sure that you've got ground-level people who are empowered and excited about using the technology, and you have to give them some latitude to be able to develop those solutions to make them work."

Put people first

Stanley Black & Decker and Schneider Electric's approach is a good recipe for successful upskilling and programs, Akhtar said.

The digital transformation message is often presented as necessary only for the organization to keep up with competitors rather than the benefits it brings for the workers and the organization as a whole, she said.

"Organizations should always start with why they're doing digital transformation, and then that should inform the tools they use," Akhtar said. "They should bring employees along so that they can understand what this is going to enable, how they can work differently, what the different outcomes are that they're going to get, what it means for their job and how they need to work differently. They need to be hypertransparent about that."

Workers should also be involved in the digital transformation process as early as possible to get the most successful buy-in, she continued. Too often, digital transformation decisions are made by a small group of people, usually technology experts, and imposed on workers.

"It feels to them like change is being done to them rather than with them, but it's better if you can bring them along from the beginning and ask them, what are the things that make their job easier, what feels like a waste of time?" Akhtar said. "By getting that input early on, they're already bought into the new solution and you can focus more on getting them up to speed on how to use a new tool, rather than facing resistance from them knowing that something's going to be different."

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