Headlines are full of stories about the declining share of manufacturing jobs in the most competitive economies around the world. The reputation of the industry has often been marred by low wages and less than desirable working conditions. Many observers point to the the growing “skills gap” and the lack of skilled training as the biggest driver that hinders productivity in the manufacturing industry.
A quick look at some of the key trends in manufacturing raises a number of important questions for the long term:
1. The skills gap is widening as output is increasing. Over the past 30 years, investments in automation have changed the structure of the manufacturing workforce: manufacturers have hired fewer but more skilled workers to run their plants. At the same time, manufacturing output per hour worked climbed 189 percent vs. only 85 percent in the whole U.S. economy. This highly qualified workforce is highly sought after. In a survey from the Manufacturing Institute, 80 percent of American manufacturers reported a moderate or severe shortage of high-skilled workers — approximating 600,000 high-skilled manufacturing jobs unfilled.
2. Training employees is very costly. Training costs per new hires areabout $3,000 per new hires and $1,500 per employee per year. With turnover rates reaching 20-to-30% in certain sub-sectors of manufacturing, expenses associated with recruiting and training new employees when so many walk out the door are substantial to most manufacturers’ bottom line. High worker turnover is also a bigger problem than it might seem because it injects variability and unpredictability into production schedules, increase downtimes, cycle times and employee over time.
3. Demographics is working against us. Today, the average age of a highly skilled U.S. manufacturing worker is 56. The retirement of aging workers, as well as heightened demand for workers, could cause serious shortages of skilled workers. A 2013 study from the Boston Consulting Group estimates that by 2020, the U.S. could face a shortfall of around 875,000 machinists, welders, industrial-machinery operators, and other highly skilled manufacturing professionals.
Enter Poka, a mobile-first collaborative platform that focuses towards efficient training, knowledge retention and real-time information tailored to the manufacturing world. Once implemented, Poka both decreases training costs and increases training ROI by breaking down traditional silos that have divided the workforce, management and factories for decades.
Their early product’s engagement metrics have demonstrated a strong impact on employee empowerment that are able to receive better training and increase their confidence on the job. The result is a hyper-efficient way to increase factory productivity, decrease downtimes and internal failure costs while lowering employee turnover. And it is already being used or tested by some of the largest manufacturers in the world.
Poka was founded by Alex Leclerc and Antoine Bisson. Alex recently was in charge of Continuous Improvement at Leclerc Foods USA — a division owned by his family business Groupe Biscuits Leclerc where he worked 7 years. Alex has literally grown-up on factory floors and has gained extensive experience in lean management while also developing a strong ability to break down manufacturing processes and identify throughput related problems. Antoine is a Software Engineering undergrad from University of Waterloo — one of the most prestigious software engineering school in the world. He’s worked at Ubisoft and later joined Microsoft prior deciding to quit his job and leave behind his 6-figure salary to start the company with his friend from childhood. Alex and Antoine have the right combination of drive, skill-set and attitude that are critical to building a successful technology company.
iNovia is thrilled to announce that it has led a $2.5M investment in Poka alongside SoftTech VC. iNovia has been increasingly focused on opportunities in vertical SaaS categories that were once considered too small markets for technology companies but are now on the verge of being “consummerized” by the adoption of mobile connectivity in the workplace. This is a fascinating company with an innovative mobile solution to a critical problem in a complex industry. We are excited to support Alexandre and Antoine on their journey to start a social industrial revolution!