SuiteWorld 2019: The shifting landscape of the manufacturing industry

The truth about automation’s impact

The increased need for data is hardly a surprise in the manufacturing sector as machines become more “intelligent”, collecting and acting on data. But this increased intelligence can also put some roles at risk.

Manufacturing has been flagged as one of the industries affected by automation, and – in many cases – machines have replaced people altogether.

Grey says there’s a “level of truth” in the idea that some jobs are under threat as a result of automation and artificial intelligence (AI), but for OSL Cutting Technologies, it has only meant a shift in the type of people it hires.

“What you’re actually doing is changing the skillset requirement of your business,” says Grey. “Instead of someone picking something up and moving it from A to B, you now need a person who can programme robots, or an employee who can see where the automation needs to be in your business. There’s just a skillset shift.”

According to Grey, OSL Cutting Technologies’ fast pace of growth, plus the changing skills needs of the market, means the firm is taking on more employees, but the type of roles they are recruiting for are “very different”.

“We’ve built a team now that’s just made up of coders to control all of the data systems and implementations. That team didn’t exist two years ago,” he says.

But there will still be a loss of certain types of roles, and Grey admits the type of people who are more likely to be automated out of the workplace are those in increasingly “less skilled jobs”.

However, this doesn’t necessarily mean getting rid of everyone, says Grey, who believes businesses need to “balance the humanistic alongside the commercial demands of the landscape”.

While businesses need to look at the best ways to make more cash, they also need to consider the people working for them. “Where you can, making decision that don’t hurt your employees too much while protecting people is an informed part of business,” says Grey.

Wherever possible, Grey advocates retraining existing employees, or redeploying them to different parts of the business.

Grey, using a hypothetical employee called John, gives an example of how OSL is a business that will “do as much as possible to preserve long-standing employees”.

“Wherever we can, we want to keep people, and people already have a lot of knowledge inside their head that we want to leverage,” he says. “John’s worked for ages, and if we get rid of [an old machine], we’ll have to get rid of John too, and we don’t want to get rid of John.”

For example, if John’s machine produces 30,000 units, and a new automated machine will produce 120,000 units, as long as the firm’s sales team can sell the full capacity, there is no need to eliminate John’s job. But John must also be willing to put the effort in.

“The reality is, if John doesn’t want to learn something new, John’s in trouble. That’s just the world – if you’re not willing to evolve with it, then you’re going to struggle. You can only do so much to support people, but where we can’t, unfortunately, people lose jobs and move on.”

Moving from hypothetical to reality, Grey says the business keeps a “skills matrix” of all of its employees, and knows who is likely to be at risk in the future.

“Our business model is not to look at it and think, ‘Where can we kill cost and get rid of people?’. It’s looking at where can we build competencies and capacity to be able to service the market better, and then transitioning people accordingly,” he adds.

The best plan for Brexit

Planning for the increased need for digital skills has been a concern for many industries. This is especially true in the wake of Brexit, with experts saying that an increased focus on home-grown talent will be the best way to avoid growing skill gaps.

While OSL Cutting Technologies is well prepared for adapting to the skills it will need in the wake of automation, it believes the best plan for preparing for Brexit is flexibility.

Grey says those who have a “massive Brexit strategy” are “wasting their time and talking rubbish”.

How do you prep for [Brexit] ambiguity? You might as well just be reactive and responsive

“How do you prep for ambiguity? You might as well just be reactive and responsive,” he says. “So when something happens, we will be the fastest to move. That’s our game plan.”

OSL Cutting Technologies has the preparations in place to react quickly once solid decisions have been announced, including a warehouse in the Netherlands, a flexible supply chain and tweaked stock models.

Those who can’t be flexible will be left behind, which is true of both reacting to changes such as the UK leaving the European Union, and the shifting skills needs of the nation.

Adopting NetSuite has been part of OSL’s shift towards a more reactive business model, according to Grey.

“NetSuite have allowed us to do things in our business we would not have been able to do. I’ve never had something that’s kind of an external thing be so core to our business model,” he says.

“Most core things are like our people, our culture, but these guys are absolutely fundamental to what we’re doing going forward, so it is a huge thing. Anyone who’s not looking at the business that way are dinosaurs and they’re going to be in trouble.”