Tag Archive: shortage

1. Questions for 2022 Pt. 4: Automation

   March 16, 2022 11:00 am Leave a Comment

   Today we offer the final post in a series focusing on questions for 2022. You can read the previous posts on data literacy, price increases, and expense control here, here, and here.

   This week, we further explore the opportunity to evaluate (or reevaluate) business cases for increased automation in light of the current business environment, and the likely continued knock-on effects of the pandemic.

   What we already know:

   As in previous weeks, let’s take what we know about 2022, and then apply it to the question.

   The current US labor market is unlike any previously experienced in recent memory:

   • A greater than expected death rate has reduced the like-for-like labor pool
   • Greater than average retirement rates have also reduced the like-for-like labor pool
   • A shortage of affordable childcare has also negatively impacted the labor market

   These and other pandemic driven factors have given rise to unprecedented labor shortages, pressure to increase wages, greater than average labor turnover (“The Great Resignation”), and HR nightmares all around.

   Great, but so what?

   The bottom line is that many businesses cannot find qualified candidates to fill open positions. Even when they are offering above market rates, putting revenue, profit, growth, and even long-term business viability at stake, there remains a shortage of viable candidates.

   This is where the question of automation comes in.

   In our experience as consultants, we’ve often seen clients consider the investment and business case for increased automation. This is across many industries and business functions, looking at everything from the standard evaluation of more efficient heavy machinery to consideration of exotic solutions involving robots and artificial intelligence, through to more mundane decisions on IT. Many times, even when the return on investment is clear and the business benefits obvious, they hesitate to make these investments due to perceived risks, the availability of labor, and the fact that their businesses could still operate satisfactorily without increasing automation.

   In most cases this was probably the right decision at the time. But the question now is, “Can businesses really afford not to consider and implement increased automation solutions?”

   If labor is a sizable part of your business expenses, and your labor costs are increasing, now is the time to look at labor saving and automation solutions no matter what the industry or function.

   In the past, automation investment cases may have hinged on reducing existing headcount. Now, they might revolve around the mission critical reality that people cannot be found to do the work that needs to be done for the business to operate.

   Equally, maximizing productivity and job satisfaction of existing employees in the tight labor market may also provide a compelling case for investment.

   Essentially, investment cases for automation may now be about more than just simple margin improvement, or cost takeout opportunities that previously you could afford to ignore or not do. They could relate and be the answer to existential threats to ongoing business sustainability.

   Conclusions

   If, for whatever reason, you have previously considered automation but decided not to move forward, it may make sense to revisit these potential opportunities.

   Now might be the right time to identify and evaluate automation opportunities. It might also be time to implement anything that is either a quick-win or that could be transformational, be that from an operational or financial perspective.

   Core Catalysts regularly helps clients identify opportunities for increased automation and build business cases to support investment decisions. We also aid in vendor selection through to project management and implementation of automation initiatives, across all sizes, types, and durations of project. If you believe we could help your organization, why not reach out to us to schedule a call?

   We hope you have enjoyed this series of thought-starters for 2022. Thank you once again for reading and please share any thought or comments you have.

   – Mark Jacobs, Client Service & Delivery

2. Thought Starting Questions for 2022

   February 2, 2022 11:00 am Leave a Comment

   It’s that time of year again. Businesses are going about making confident predictions on what the next twelve months will hold for them. And yet, even at the best of times the accuracy of these predictions will be questionable by December. Given all that, perhaps the point of these predictions is less about being right, and more about creating engagement for the marketing folks?

   But as we all know, we are not living in normal times right now. No one can really see into the future, and it is not possible to be completely sure what the next year holds. Just as well, your time is valuable, so why waste it reading another set of bold predictions for 2022 that have questionable value just to boost someone’s marketing metrics?

   To this end, we humbly offer you a brief series of thought-starting questions that might actually be helpful and worth pondering if you are considering the year ahead. This will be the first of many blog posts to follow in the coming weeks, all of which will explore these questions a little more thoroughly.

   2022: What can we be confident about?

   There are three things we can be relatively sure of:

   • The Covid 19 pandemic, and its effects on business, are not over yet.
   • Specifically, supply chain issues and labor shortages are going to continue to be concerns for most of us for at least the next twelve months.
   • Higher inflation is definitely going to be an economic factor for the next twelve months, and possibly longer.

   How do these factors influence what I should be thinking about for this year?

   If you agree with the three driving points identified above, four key questions for 2022 stand out. These questions are linear and feed into each other. They are:

   #1 Does my organization have the right level of Data Literacy, and is it in the right areas and functions?

   There are some real-life “nuts and bolts” things that most businesses need to be thinking about and working on in this area.

   #2 Do we need to be considering Price Increases?

   And if they are needed, how do we actually implement them effectively, as opposed to just talking about them but not doing anything, or trying to implement them and just ending up upsetting our customers and / or not achieving any financial benefit.

   #3 Have we adequately reviewed business cost structures and all major business expenses in light of how business has changed?

   And what’s more, will it ever go back to how it was pre-pandemic?

   #4 Should we revisit (or visit for the first time) business investment cases for enhanced and increased automation?

   Historically, whether or not to invest in automation has been a decision based purely on ROI and ease of implementation. If wage inflation and labor shortages continue, increased automation may cease to be a choice and become a necessity to ensure operational viability, continuity, and long-term business sustainability. In other words, can you afford to not automate more?

   Exploring Question One

   This week, let’s dive a little deeper in thinking about the question, “Does my organization have the right level of Data Literacy, and is it in the right areas and functions?”

   What we already know:

   Once again, let’s take what we know about 2022, and then apply it to the question:

   • It’s generally accepted that inflation in the United States is currently running around 7%, and no one knows whether this is a short-term aberration, or if it will be a longer-term reality.
   • Based on current lifespans, average retirement age, and the law of averages, at least 80% of the current working population have no experience living or managing a business in a prolonged (or even relatively short) period of such high levels of inflation.
   • Likewise, most people working today are used to Just-in-time (JIT), Kaizen, and other lean manufacturing and supply chain practices (implemented across the eighties, nineties, and aughts, creating significant cost savings in a time when economies struggled) and either have not experienced or barely remember a time when things worked differently.

   Great, but so what?

   Well, the challenges of 2022 mean that having people who can work with current IT systems, pull data, and then report on and take standardized or rote actions just isn’t enough anymore.

   What businesses now need are people who can interpret the stories behind the data. People that can develop insights and actions that consider imperfect supply chains and labor availability are in high demand. These are people that can see the many complex dependencies and interdependencies, both internally and externally, that are either hidden or are not things that businesses previously had to worry about (pre-pandemic).

   Recognition of a deficit in required data literacy in many organizations is the reason why it is so hard to hire demand planners, business analysts, and supply chain specialists right now. This deficit isn’t just a supply chain and manufacturing issue. It spans across all functions, including administrative functions like HR (such as labor planning, scheduling, etc.) and finance (such as maintaining margins during times of extreme changes in expenses/revenue).

   The question, then, is as follows: Do you have the right people with the right skills to interpret and manage through a time of great variability and ambiguity? We’re in business territory that most people have never experienced, and businesses need skills and experience that perhaps they once had, but that have also likely atrophied after an extended period of disuse.

   Conclusion

   Your answers to this question will probably lead nicely to the next post on price increases. A subset of data literacy is the ability to pull together all the information needed to identify whether or not price increases are needed, how much they should be increased by, and the data that is needed to justify increases to customers. Even if you have this capability, when is the last time you asked for a price increase, and how well did it go?

   Here at Core Catalysts, we’ve helped multiple clients analyze their data literacy. In doing so, we’ve also helped clients identify issues and opportunities with meaningful impact to their top and bottom lines, and then helped them fill important gaps in organizational capabilities. This allowed them to take action to capitalize on available opportunities, spanning everything from IT system evaluation and implementation through identifying and hiring new employees. If you believe we could help your organization with this, why not reach out to us and schedule a call?

   In the meantime, we hope reading this article and thinking about these questions has been worth your time. We welcome comments and additional thoughts, and please reach out if you’d like to talk more about your current organizational data literacy and tackling some of these challenges!

   – Mark Jacobs, Client Service & Delivery