What is The Perfect Plant?

Part Three – Countering The Brain Drain

By Sam Sliman
President, Optimal Solutions Integration, Inc.

According to a recent Deloitte report, the average age of workers in the North American manufacturing industry is over 50, and the pool of available young talent is dangerously low. With baby boomers retiring, global competition heating up, and Generation Y showing little interest in careers in manufacturing IT, a perfect storm is brewing for North American manufacturers struggling to attract and retain the technology talent needed for driving Perfect Plant performance.

To understand what goes in to achieving Perfect Plant status, it helps to have a solid understanding of manufacturing plant history or, more specifically, an understanding of how ERP systems have transformed manufacturing plant operations over the past few decades.

ERP cut its teeth in manufacturing, beginning as material management systems in the 60s and maturing during the 70s and 80s into client-server platforms that supported myriad manufacturing business processes such as engineering, finance, human resources, project management and procurement, among others. ERP hit its stride in manufacturing in the 90s, sparked by Y2K and a desire to replace aging legacy systems but essentially driven by the need for a single, accurate, centralized view of what, for most manufacturers, had become globally disperse operations.

Baby boomers (and a dash of Generation Xers) were both witnesses to and shepherds of the ERP-fueled transformation of manufacturing plant operations. But now they’re retiring in droves, taking with them a wealth of manufacturing business experience and knowledge that is not easily replaced.

What does this mean for North American manufacturers? The short answer is an acute brain drain with the potential of setting back, or at the very least stalling, advances in plant efficiency and productivity gained over the past few decades. The longer, perhaps more pessimistic answer is a thorough trouncing by global competition and a prolonged contraction of an industry once considered a major engine for North American economic growth.

To be sure, these gloom-and-doom scenarios need not come to pass. In fact, many North American manufacturing companies foresaw the current exodus of talent, and have for some time now been actively implementing innovative, creative and aggressive IT recruitment and retention programs.

In addition, many manufacturers are offering senior IT staff nearing retirement part-time advisory roles and attractive compensation packages to stay on to facilitate knowledge transfer and help groom the next generation of plant IT.

Topping the list of Perfect Plant goals for manufacturers is increased productivity and efficiency, sharpened competitiveness, and improved customer service. To this end, vital strategies weaving throughout SAP Perfect Plant initiatives focus on delivering accurate, real-time, end-to-end visibility and meaningful, immediate plant-level responsiveness -- all of which are enabled today by a single instance of SAP ERP connecting all facets of a manufacturer’s global operations.

Much gain remains to be had from SAP ERP in manufacturing, particularly given advances in SAP’s enterprise service-oriented architecture (SOA) enabled by the NetWeaver business process platform. This latest evolution in SAP technology has made it easier, faster and less costly to streamline, integrate and automate critical, cross-functional business processes such as design-to-manufacture, order-to-cash, order entry, accounting, purchasing, asset management, research and development, procurement, and much, much more.

ERP transformations of the past have attuned today’s corporate manufacturing leaders to the operational and competitive value of strategic IT investment. It is generally understood and accepted that to continue reaping the benefits of ERP, such as integrated data, streamlined processes and managed inventory, continued investment in IT is needed -- in terms of both budget and bodies.

Given the current internal brain drain and tight external market for SAP talent, North American manufactures are hard pressed to attract and keep the internal IT resources needed to realize maximum value from their SAP ERP systems. As a result, manufacturers, perhaps more than ever before, are turning to SAP business process experts to guide disciplined approaches for gaining sustainable ERP value.