Why does it seem like manufacturing is still using 1990 technology? You guessed it; they are.

I’ve spent the last several months talking with key leaders in the manufacturing, maintenance and reliability industries about key issues we are all facing. I’ve had the opportunity to speak to more than 100 people, and this week, I’ve been wrapping up this project and pulling together our 2023 State of Community Report. When I step back now, I realize that a common theme is that many industrial businesses are struggling with change.

The pace in our industry seems so incredibly slow. In fact, the most common struggle I hear from new UpKeep customers is they are still just trying to get off paper and pen, and they are still operating in a primarily reactive mode. In fact, I talked with one company this week who said they invested in equipment 30 years ago and operations won’t touch it, improve it, optimize it, or even look at it because they’re afraid of any unintended consequences, despite knowing things aren’t running smoothly. Change means a disruption–and it comes with unknown consequences. This has been all too common from my conversations.?

The problem is that without change, our industry and our country will fall behind those who are willing to take the risk, innovate, and move exponentially forward.?The Wall Street Journal?reported this week about?how U.S. ports can’t get automated?due to the high cost of robotic technology and opposition from organized labor. Supply chain experts are already concerned about how the U.S. will compete with the highly automated ports already operating in Europe and Asia.

Why is change so hard? I thought it would be beneficial to explore that question this week.

Human nature doesn’t like change

It’s clear that all of us as human beings simply don’t like change. The entire industry of corporate change management has grown up around that simple fact. For decades,?implementing change in business has been difficult?as people like to know what to expect day-to-day and get set in their routines both at home and in the workplace.

With the?average age of skilled manufacturing workers sitting at 56, that’s even more of an issue in our industry. The vast majority of the workforce have built careers doing what they do for decades. The problem is that as these experienced employees leave, they take significant tribal knowledge with them. If they were being replaced by a younger, technology-savvy generation, that would be one thing, but we’re fighting a war on talent to even attract individuals to the industry at all, leaving an enormous skills gap AND maintenance backlog.

Rule-intensive, physical environment creates change barriers

Manufacturing and maintenance is a strictly physical, real-world industry that revolves around complex assets and processes. All manufacturing industries face strict?OSHA regulations, and many have additional government regulations and compliance requirements. The vast majority probably add company-specific operating procedures to the mix.?

All of those things, especially in combination, create barriers to change, acceptance of innovation, and challenges in the implementation of new technology.

Unions often fight change in the name of protecting jobs

Last week?I explored the decrease in unionization within the manufacturing industry, and one main argument against unions revolved around the stifling of change and innovation. I also recently spoke with a business executive who said it was impossible to add technology and innovation at his company because the union opposed it. The union fought against technology because it would eliminate some jobs even though that technology could introduce new, higher-paying positions.

The skills gap makes it hard to attract and retain employees to implement innovation

Over the past few months, I’ve oscillated back and forth about the solution to the labor shortage. On the one hand, I think it’s impossible to simply fill the millions of openings we will be facing over the next several years and believe we need to?lean into innovation and robotics. On the other hand, the knowledge required to implement, manage, and maintain all of this technology is complicated, and?we simply can’t train and upskill fast enough.

Affecting both sides of the coin is the fact that even if we successfully hired and trained, the turnover rate is so high –?sitting at a whopping 39 percent in 2022?– that it’s nearly impossible to recoup our investment in recruiting and retention efforts.

So, what’s the best way to accelerate change?

I think the answer to that question is a really difficult one. The U.S. government is making an attempt with the?CHIPS Act, designed to lower costs of innovative manufacturing, create jobs, and strengthen supply chains. The majority of that stimulus money, about $39 billion, is earmarked for the construction of new and expanded manufacturing facilities. However, we celebrated the first anniversary of the CHIPS Act this week with?none of the money released yet.?

It will be interesting to see if the money will be used to build new facilities and invested in automation and robotics, or it will be used to retrofit and expand older ones using manufacturing techniques of the past.

My hope is that we, as an industry, can invest in brand new technologies. All of us here at UpKeep are pushing for manufacturing applications using AI, innovation, robotics and automation. Given the skills and labor gap, I think leapfrogging forward is the best course of action. If we continue investing in 30-year-old manufacturing techniques, we will only exacerbate the existing issues.