Reskilling Labor for Smart Factories & AI

Manufacturers across the U.S. are leaning into artificial intelligence as a pivotal aspect of business growth. It’s not surprising then that 87% of those surveyed in a Deloitte report on AI in manufacturing have adopted the technology or plan to do so in 2025 and 2026. 

However, a key challenge to implementing AI is training a workforce to leverage the technology, especially factory-level employees. A 2023 Boston Consulting Group study found that only 14% of frontline workers say they have received AI upskilling, compared to 44% of leaders.

“While approximately 70% of the current US workforce is concentrated in frontline roles that are seeing an increase in the demand for AI proficiency, AI skilling offerings to date have been almost exclusively geared toward non-frontline populations including roles like data scientists, executives, and engineers,” said Matthew Daniel, senior principal for talent strategy at Guild, a workforce training organization.

As more manufacturers navigate upskilling workers to use AI in everything from R&D to assembly and maintenance needs on the factory floor, here’s how some companies are tackling the workforce training challenge. 

Online programs can offer workers flexible training

Offering training that can help workers upskill to leverage AI in their daily functions is a key way companies can ease anxieties in workers around the technology replacing their jobs, Daniel said. Doing so could be key for companies, as 36% of respondents in BCG’s study believe their job could be eliminated by AI.

“Organizations should proactively create avenues for employees to upskill with AI and reframe the narrative to not fear AI and the unknown but to showcase what's possible — their workforce leading, adapting, and adding unprecedented value.”

Workforce training organization Guild offers bundled AI training programs focused on related topics, such as AI literacy and ethics, workplace applications, technical programming and executing AI-driven strategies. 

The programs are fully online and offer a flexible schedule so frontline workers can participate without disrupting work. Online training options that fit into the workflow of employees can make the process easier for individuals to tackle.

“It's not just about adapting to AI — it's about empowering the frontline workforce to thrive alongside it and giving them the tools and resources to do so,” Daniel said. 

Leveraging digital tools to upskill workers

Upskilling is important for workers that may not be familiar with AI or other digital tools, said Bill Rokos, chief technology officer at Parsec Automation Corp., an organization working with more than 11,000 manufacturing companies to integrate AI into their workflows.

“For many floor workers, powerful tools like the Internet of Things, automation and digitalization are brand-new concepts,” Rokos said.

Augmented reality, virtual reality and other digital resources can offer helpful simulation platforms for workers to practice these new skills. 

“Using augmented reality and virtual reality, manufacturing leaders can provide workers with on-the-job training and enable them to learn new skills in a safe and controlled environment,” Rokos said.

That’s exactly what digital solutions firm UST is doing. The company is using the metaverse as a virtual training environment with gamified learning to teach how to use AI for tasks like data analysis, predictive maintenance, quality control and optimization. 

“We simulate real-world scenarios and problem statements in a virtual world and get workers to solve complex problems with a higher level of retention due to experiential learning,” said Ramya Kannan, vice president and industry head of manufacturing at UST. “The metaverse provides an interactive and immersive learning experience.”

This kind of learning also allows for easy collaboration and real-time communication between multiple workers and trainers.

“We can share feedback, add learnings from mistakes back into the training program and constantly improve the experience,” Kannan said.

Manufacturers are also using “AI-powered predictive maintenance, which analyzes equipment sensor data to forecast maintenance needs to reduce operational downtime, improve equipment reliability, and enhance worker productivity,” Rokos said. 

Many of these training programs, whether online or in-person, focus on safety and control, ensuring workers know how to protect company data as operations become more connected, according to a recent report from the National Association of Manufacturers. 

”The most effective AI models are humancentered, allowing them to learn and unlearn, continuously improving to meet the needs of their human operators,” the report said. 

The global talent trends Mercer researchers have highlighted are the ones that have already made headlines: Inflation’s strain on workers’ wallets, their desire for more pay to keep up with the cost of living and the continued impact of AI. Employers and employees also still spar over new work models. 

But, in a webinar cracking open the report, Mercer’s Global Talent Advisory Leader Kate Bravery noted, “We've certainly got more uncertainty on the horizon. But at the same time, we've also seen greater convergence in views this year across generations and geographies.”

Here are a few key findings from Mercer’s February 2024 report, which polled 12,200 HR professionals, as well as executives, employees and investors.

Artificial intelligence demands different human talent

A lot of the employers polled mentioned looking at AI as a matter of product integration. But generative AI is becoming a part of the fabric of work in general.

Mercer noted 20 priorities for HR leaders in 2024; no. 5 was “Redesigning work to incorporate AI and automation.” This means 40% of HR professionals polled by Mercer have AI workflows on their people agenda. (Also in the top 10 HR pro priorities were enhancing EX, improved health benefits, workforce planning and people analytics.)

In covering the report, Bravery noted the significance of the AI at work conversation. Referencing Mercer’s approach to researching humans in a “machine-augmented world,” Bravery said, “We know that it's humans [who] will effectively unlock AI’s real potential.” 

More than 50% of executives polled by Mercer expressed their belief that their businesses won’t survive past 2030 without “embracing AI at scale.” 

What are gold standard C-suites doing to successfully embrace AI? They prioritize human-centric productivity, foster trust, ensure equitable work practice and lean into a “digitally-infused future,” the report found.

“As risks become more connected and less predictable, [organizations that outpace their competitors] understand that a new level of risk awareness and mitigation is essential to building a ready and resilient workforce,” researchers said in the report.

As new work models emerge, EX should be re-examined

“I don't think you'll be surprised, but HR’s top concerns this year are rising labor costs, and ensuring new work models — flex, gig, short-term work models — are really delivering long-term value,” Bravery said. 

A whopping 98% of employers are planning “work design changes” for 2024. The main goal is to tweak workflow to increase productivity; Mercer identified the concept of fixed roles, flex roles or “agile roles that benefit from skills-based planning and credentialing.”

Hybrid work continued to reign as a key factor in productivity. “While it may seem that employers have finalized return-to-office plans and codified their post-pandemic flexible working policies, in fact 41% are planning further changes this year,” researchers said in the report.

Mercer broke down flexible work into “six dimensions:”

• Where, as in location and infrastructure;
• When, as in hours and scheduling;
• What, as in job content and sharing;
• Who, as in alternative workforce and automation;
• How, as in scaling and technology; and
• Why, as in mission and purpose.

The idea of value was persistent across the webinar. For one, more workers said they were sticking with their employer this year — which is poignant, given that panelists acknowledged the Great Resignation and how it changed the work landscape.

Bravery also highlighted, “More employees shared that their needs are not being met — especially older workers and Gen Z. We've got work to do there.” 

Engagement will be an area that stakeholders “need to watch out for this year,” across the board, Bravery said.

Traditional data science models may work in many industries, but decisions need to be made in real time in manufacturing and supply chain, said Jennifer Peters, director of BI and data analytics at Nestlé Purina, during an Industry Dive event on July 24, 2024. This is where generative artificial intelligence comes in.

“Sometimes we’re even doing things like machine control, so this ad hoc kind of point-in-time analysis doesn't really work,” Peters said. “So, having a really strong machine learning operation strategy, and then the people that have the experiences and skills to industrialize machine learning at scale in our operations is really, really critical to get the value out of AI.”

With information moving fast in a dynamic environment, it can be challenging for an analyst to do a deep dive into the data to figure out what is causing an issue and the right action to take to address it, Peters said. Because of this, generative AI can be valuable not only for the business leaders, but employees working on the shop floor in factories.

"We're really looking at generative AI as being — I don't want to use an industry term, but it is — it's a copilot for our folks to be able to help them with strategic decision making," she added.

The specific type of AI also offers deeper analysis and visibility than a typical manufacturing control tower, said Chris Della Rocca, group chief information officer of tech ops and risk at Johnson & Johnson. 

“With Gen AI layered on top, you have this amazing ability to have a conversation with your analytics layer,” Della Rocca said at the virtual event. “And so not only does it give you the result, but now you have a question. And if not, you can have a series of fixed prompts that are typically asked in these types of situations.”

He added that generative AI also addresses low-level alerts automatically, allowing workers to focus on more high-impact alerts across operations. For example, the tool can help with inventory management and tracing back issues with suppliers more quickly than standard practices, according to Della Rocca.

About 43% of workers across generations are worried that another employee with better skills in generative artificial intelligence could replace them in their role in the next year, according to a Feb. 12, 2024 report from D2L, a learning technology company.

Generation Z workers appear to be most worried about this. While 52% of Gen Z workers said they’re worried about being replaced within the next year, 45% of millennials and 33% of Generation X workers said the same.

“What this new data suggests is that there’s an opportunity for employers to help workers better prepare themselves for the future and to give people the confidence that they can continue to make a meaningful contribution in their roles,” Sasha Thackaberry, vice president of Wave at D2L, said in a statement. “Skills development — whether it’s on using generative AI more efficiently or simply upskilling to stay ahead of change — is crucial for workers to keep up with the rapidly changing landscape of work.”

In a survey of 3,000 full-time and part-time U.S. employees, 60% said they want to use generative AI tools more frequently at work during the next year. About 49% said they’re already using AI tools at least once a week at work, and 52% said they’re using the tools outside of work. At the same time, 37% said they never use AI tools.

In preparation for the future workplace, younger workers were more likely to say they plan to take multiple professional development courses during the next year. About 26% of Gen Z workers and 24% of millennials said they plan to enroll in 6-10 courses in the next 12 months, as compared with 12% of Gen X workers.

Despite ongoing unease about AI in the workplace, worker confidence may be growing compared to previous years, according to a Robert Half report. HR and tech professionals, in particular, believe generative AI tools will create more demand for their skills.

However, mid-career professionals and managers (between ages 25-54) appear to be most at risk for generative AI disruption, according to an Indeed report. Many of these positions are considered “exposed” to disruption, where AI can perform a high percentage of the required skills in a “good” or “excellent” manner.

From an HR perspective, AI tools have the potential for “massive gains,” an HR software expert told HR Dive. AI can help with predictive text and scheduling functions, for instance, which may assist with talent acquisition. AI may also account for human bias and improve diversity and inclusion objectives, she said.

Stellantis has been busy rolling out new artificial intelligence-enabled technologies on factory floors in recent months, one of many manufacturers experimenting with AI as a way to boost production speed and ease workers' physical labor. 

In September 2024, the automaker hosted its annual Factory Booster Day, bringing together technology startups and suppliers with proposals for Stellantis' manufacturing team. The annual event, now in its ninth year, is one of the key ways the company taps new potential technologies to bring into its factories. 

Anna Valeria Anllo, head of innovation for vehicle process engineering at Stellantis, said the company prioritizes technologies that enable them to improve plant efficiency and product quality, as well as cut costs. 

At the 2024 factory day, Anllo said Stellantis was particularly interested in quality control and energy management. 

"How can we help our plants and our factories and associates do better, be better, have better quality, and cut costs?" Anllo said.

Robot guidance tools help boost factory accuracy

In recent months, Stellantis rolled out a robot guidance tool from France-based startup Inbolt that uses 3D-vision systems to help robots adjust their trajectory and operations to avoid potential conflicts or impacts mid-manufacturing process. 

Inbolt's technology has been installed at multiple Stellantis powertrain factories thus far, such as in the automaker's Szentgotthárd, Hungary, factory.

The guiding tech, chosen from the 2021 Factory Booster Day, is being used there to help autonomous mobile robots pick cylinder heads from pallets and load them onto the production line. The Inbolt technology locates each cylinder head, realigns the robot’s trajectory and ensures correct pick-and-place operations onto the production line, according to Inbolt. 

Anllo said Stellantis is hoping to scale Inbolt's technology across 20 or 30 other plants around the globe. The automaker looks for use cases for technologies like Inbolt's in other aspects of its factories, including body shops and paint shops, she added. 

When evaluating a new tech program for factories, Anllo said the company analyzes the cost of integration, its potential cost savings and the time needed to roll out the product. Once finished with that process, research and development teams can move forward with a proof of concept that can be reviewed by plant managers for approval. Stellantis aims for projects to reach their first proof of concept within one to two years. 

Another AI-enabled technology that Stellantis has rolled out are autonomous wheels from Norway-based startup wheel.me, which convert current carts and dollies into AMRs. The tech was first integrated at Stellantis' Sterling Heights, Michigan, plant, after being chosen from the automaker's 2022 Factory Booster Day. 

"We are in the process of looking at different locations where we can also install this," Anllo said.

One of wheel.me's advantages for integration is that the technology didn't require any adaptions to the shopfloor layout, Anllo said. This more seamless integration is a factor in how Stellantis chooses experimental process technology, as it helps lower upfront costs. 

"We take innovation seriously, we are really about transforming, moving forward, making things better for associates, improving quality and being more cost efficient," Anllo said.

Dive Brief:

• The Department of Labor has issued formal principles to guide employers as they introduce artificial intelligence platforms into their workplaces. The guidelines, released Oct. 16, 2024, are an extension of the Biden administration’s 2023 executive order on AI. “Whether AI in the workplace creates harm for workers and deepens inequality or supports workers and unleashes expansive opportunity depends (in large part) on the decisions we make,” Acting Labor Secretary Julie Su wrote in her introduction.
• The principles are designed to encourage support for collective bargaining rights, transparency in the use of AI, and workers’ data privacy, while seeking to provide employer support for those whose jobs are displaced by the technology.
• The Partnership on AI, a coalition of tech companies and nonprofit organizations that includes Google, Microsoft and the American Civil Liberties Union, commended the recommendations. “Together, we are working to ensure that the benefits of AI are broadly shared so we have a future of work that works for all of us,” the partnership’s CEO, Rebecca Finlay, said in the department’s press release.

Dive Insight:

The agency said its document is not meant as an “exhaustive list” but a framework for businesses, and that “employers should review and customize the best practices based on their own context and with input from workers.”

The Labor effort builds on the labor aspects of the broader Biden administration effort to outline AI policy in the current absence of federal legislation. Several states – notably California and Colorado – have enacted laws regulating AI.

The administration’s October 2023 Executive Order said that AI technology “should not be deployed in ways that undermine rights, worsen job quality, encourage undue worker surveillance, lessen market competition, introduce new health and safety risks, or cause harmful labor-force disruptions.”

While AI may revolutionize some dull or repetitive worker tasks, this automation is likely to cause a demand for new skills and training as employees migrate to new and different work roles and for those overseeing AI work. It may also thrust some workers into unemployment.

Further, AI-augmented work, according to the department “poses risks if workers no longer have autonomy and direction over their work or their job quality declines.”

The technology could also “embed” bias and discrimination into decision-making or make “consequential workplace decisions without transparency, human oversight, and review,” the Labor Department said.

A 2023 report from the U.S. Chamber of Commerce’s AI Commission also called for measured federal regulation of the technology. “A failure to regulate AI will harm the economy, potentially diminish individual rights and constrain the development and introduction of beneficial technologies,” the report said.

The Chamber did not immediately respond to a request Monday for comment on the Labor Department’s AI framework.

The eight principles articulated in the document aim to:

• Center worker empowerment
• Develop AI ethically
• Establish AI governance and human oversight
• Ensure transparency in AI use
• Protect labor/employment rights
• Use AI to enable workers
• Support workers impacted by AI
• Ensure responsible use of worker data

“Incorporating worker perspectives is an important part of the AI principles, part of our company approach, and a key component of our partnership with AFL-CIO,” Amy Pannoni, Microsoft’s deputy general counsel, said in the department’s press release.

President Joe Biden first nominated Su for the permanent Labor role in February 2023. Earlier in 2024, Biden renominated Su, a former labor lawyer from Los Angeles.

In a survey in October 2024, 58% of vice presidents and directors in the U.S. and U.K. said they’ve never attended an artificial intelligence training or course, according to a Dec. 10, 2024, report from technology training firm General Assembly.

In addition, only 42% said they’re very or extremely confident they know how to use AI tools without compromising company data, and 27% said they’re not very or not at all confident. When it comes to hiring vendors that use AI, 39% said they don’t have the knowledge to make decisions.

“Company leaders need to upskill for the AI era, too,” Daniele Grassi, CEO of General Assembly, said in a statement.

“Technical and non-technical leaders alike must understand the legal, privacy and ethical implications of AI use,” Grassi said. “They need to know how to evaluate AI vendors, how to protect company data, and how to guide their teams on using AI in their work. Companies who don’t establish AI usage policies and upskill executives on AI face consequences ranging from data and privacy breaches to competitive disadvantage.”

In an October survey of 393 vice presidents and directors in the U.S. and U.K., 46% said their company doesn’t have an AI usage policy.

In addition, 79% said AI could replace some of their employees in the next 10 years, and 26% said AI could replace their jobs as well. A previous report from General Assembly found 62% of Generation Z workers think AI could replace them, compared with just 24% of baby boomers.

Although 54% of leaders said they encourage their teams to use AI, lack of understanding or training could hamper adoption, General Assembly reported. Only 47% said their team uses AI regularly, and 16% said their company regularly offers AI training to employees. 

To prepare for an AI-driven future in the workplace, employers must prepare workers by upskilling them, according to a report from The Adecco Group. Although three-quarters of workers using AI-based tools said they’re more productive, only a quarter of overall workers said they’ve received training about AI use at work.

As part of the AI learning curve, leaders should create opportunities for employees to experiment, an automation executive told CFO Dive. Employers can set aside time for workers to identify opportunities for AI use in the company and test them, even before the technology may be ready for “prime time,” she said. 

Ensuring access to training is also crucial, especially as a divide appears to be growing between those who benefit from AI at work, according to a Cypher Learning survey. For instance, younger workers, men and senior management were more likely to say they use and experiment with AI, while older workers, women and clerical or physical workers were less likely to say so.

Companies across the food and beverage space — from Unilever to Heineken and Mondelēz — have embraced and touted their AI technologies. The technology is being used in manufacturing to help cut costs, market products and craft new items to specific consumer demand. But companies without a clear strategy for its use within their supply chain are not yet seeing results after adoption.

A study released by software developer IFS in August 2024 found the expectations for what AI can accomplish within manufacturing companies are not being met when the technology is actually put into practice. The survey, consisting of responses from over 1,700 C-suite executives at manufacturing companies, found that despite continued optimism associated with the positive aspects of AI, hurdles remain before they can see a tangible benefit with cost reductions and innovations.

According to Kevin Miller, the chief technology officer at IFS, a big component to the rapid adoption of AI is pressure from boards of companies. But he cautioned that companies are not always looking at which AI components can improve their supply chains in a tangible way. 

“Companies are sometimes racing to a solution,” Miller said. “AI is still somewhat in its infancy, and it can be wrong in the results that it gives back to you.”

Over half (55%) of manufacturers surveyed believe a lack of a strategic approach toward the technology within their companies is hampering their abilities to find success with it. A limited set of expertise with the technology was cited as the most common issue companies are running into, with 43% of respondents to the IFS survey listing it as the main factor slowing progress.

Miller added that while artifical intelligence was pitched as a magic box to solve problems, it’s not that simple.

According to Miller, AI can provide a holistic benefit to the food and beverage production process. One IFS client, a snack food manufacturer, noticed a dip in quality in their production, as raw materials were expiring faster than anticipated. The company installed some sensor devices to detect the temperature of the facilities with automated fans. When the temperature rose, the fans kicked on and circulated cool air, which led to enhanced food quality.

“This version of AI they’re using is not really anything a human couldn’t do, it’s just automating it to the point where there are many more data collection points to spot any anomalies much faster than a human can,” Miller said.

“The company needs to be ready for that type of transformation. It’s important to start with the fundamentals, like ‘What is the objective or challenge we’re trying to solve?’”