Foster Manufacturing through Skill, Scale and Sustainability with Deloitte and Workday
In today’s context, European manufacturing faces a crucial moment, dealing with the dual challenge of a shrinking skilled workforce and the need to adopt digital advancements. As major industry players confront these critical issues, a key question arises: How can they strengthen their competitiveness and resilience in this new era?
For decades, European manufacturers have been known for their engineering excellence and industrial strength. However, moving forward again requires adaptability and transformation. Can the industry attract and retain skilled talent while quickly embracing digital innovation? Or does it risk losing its market position by sticking to outdated practices?
This eBook explores these urgent questions, advocating for integrated solutions that combine technological innovation, human resources, workforce development and sustainable practices.
Deloitte and Workday, working in collaboration with European manufacturers, understand the need for urgent digital transformation – and we’ve provided tailored strategies to navigate this critical challenge. These strategies are empowering global manufacturers to not only survive, but to thrive in today’s dynamic markets. From addressing immediate sustainability requirements to fostering flexibility in a changing labour market, our insights illuminate a path where innovation and adaptability come together.
A robust industry facing complex challenges
Understanding the challenges in the manufacturing industry has never been more critical. From geopolitical tensions and the pandemic to the conflict in Ukraine, manufacturers face an increasingly complex world. These events highlight the fragility of global supply chains and the intense pressure on costs and margins, exacerbated by rising inflation – particularly in sectors like energy.
In response to this, the industry must become more efficient and reduce costs. Digitalisation is imperative across sectors like automotive, aerospace, and construction. Manufacturers also face international mandates to go green, reduce emissions and care for the environment. The political landscape also adds uncertainty, making impactful decisions for the long term difficult to take. Consumers expect companies to become more sustainable to maintain their loyalty, driving manufacturing trends. For example, a Deloitte automotive study showed that four in ten French individuals consider a car brand’s commitment to sustainability important. To stay competitive, European manufacturers are adopting technologies like cloud computing, AI, IoT and smart factories. Modernisation must also address human capital: retaining and recruiting skilled talent, shifting to a skills-based workforce and supporting talent with cloud-based solutions.
Key Challenges in Manufacturing
COST PRESSURES
Rising costs, particularly in energy, are squeezing margins.
EFFICIENCY DEMANDS
There’s an urgent need for increased efficiency across all sectors.
SUSTAINABILITY MANDATES
New international mandates require manufacturers to reduce emissions and adopt green practices.
Technological Solutions for Modernisation
CLOUD COMPUTING
Enables flexible, scalable solutions for data management and operations.
AI
Drives innovation through advanced analytics and automation.
INTERNET OF THINGS (IOT)
Connects devices and systems for improved efficiency and monitoring.
SMART FACTORIES
Integrate advanced technologies for optimised production processes.
The shortage of a highly-skilled workforce
A critical challenge is the widespread shortage of skilled labour affecting nearly every manufacturing sector. Structural issues and demographic shifts are at the heart of this labour crisis, with fewer younger workers entering the workforce as the baby boomer generation retires. And with many taking early retirement, combined with a declining interest in vocational training, the situation is becoming even more problematic.
In particular, the new generation of talented workers are prioritising diversity, sustainability and a sense of purpose in their careers. Their approach to work and the employer-employee relationship differs from previous norms, rejecting traditional productivity metrics.
60% of employees are seriously considering quitting for a job that better supports their wellbeing.
Opportunities for human capital revitalisation are particularly evident in large economies like France, Germany and the UK. Germany’s manufacturing sector, driven by automotive, mechanical engineering, chemical and electrical industries, is dominated by SMEs with a strong focus on exports and innovation. France’s manufacturing sector includes aerospace, construction, industrial products and automotive, with a focus on aerospace and energy. Meanwhile, the UK’s manufacturing sector, though smaller as a percentage of GDP, has seen significant contributions from the pharmaceutical and aerospace industries, which have accelerated digital transformation to boost efficiency and resilience.
50% Human performance drives 50% more business success than physical assets.
Despite these varied economies, they all have one thing in common: a skilled and innovative workforce. Companies cannot operate or innovate without talent – and this could hold some countries back. A recent Deloitte study found that France faces the greatest difficulty filling vacant positions, followed by Romania, Italy, Turkey and Germany. Low wages, an ageing workforce and a lack of skilled labour are all fuelling this talent gap. But with the emergence of advanced robotics, automation and AI, manufacturers will need new strategies for digitalisation, innovation and talent competition to remain ahead.
Benefits of a highly skilled workforce: Solutions from Deloitte and Workday
Deloitte and Workday are helping organisations address skilled labour shortages with advanced technological solutions, driving transformative shifts in workforce management. By leveraging technology and AI, we’re enhancing workplace culture, mental health support and productivity to unlock worker potential. Here are just some of the strategies on offer.
Leading the way forward: Blueprint for manufacturing
The manufacturing industry stands at a critical juncture. As detailed in this eBook, the convergence of factors such as digitalisation, sustainability imperatives and a persistent shortage of skilled labour necessitates a bold reimagining of traditional paradigms. It’s within this landscape of change and opportunity that Deloitte and Workday offer a visionary perspective on the future of manufacturing worldwide.
Deloitte, a global consulting firm renowned for its expertise in strategy and transformation, and Workday, a leader in enterprise cloud applications for finance and human resources, have joined forces to illuminate a path forward for manufacturers. Together, we present a holistic vision that integrates cutting-edge technology, strategic insights and innovative practices to empower manufacturers to navigate the complexities of the modern era.
At the heart of this vision lies the recognition of the multifaceted challenges confronting the manufacturing sector. From attracting and retaining top talent amidst shifting workforce dynamics to understanding the need for agility in the face of geopolitical uncertainties, the road ahead demands a comprehensive approach.
Integrated, transformational solutions from Deloitte and Workday will enable manufacturers across the globe to thrive despite these market challenges. By embracing a vision that transcends traditional boundaries, harnesses the power of technology and puts humans at its centre, manufacturers can chart a course towards sustainable growth, resilience and leadership in the global marketplace.
