Know or be nowhere. Knowledge retention will be essential for survival during the next five years and beyond, according to several speakers at the Emerson Global Users Exchange held October 3 through 7 in Orlando, Fla.
“You must be a ‘know man’ to be a leader,” says Scott Pendegrass, a keynote speaker and control systems engineer at Lyondell Chemical Co. Know your equipment, tools, practical knowledge, your process, how to learn, the people around you, a good idea when you hear one, your business, and your competition.
By 2010, 65% of the existing plant technical workforce won’t be out there, according to Dave Woll, vice president of consulting, ARC Advisory Group. Many engineers and plant experts will retire and there will be a short supply of young, new engineers to take their places.
“I believe most process plants don’t know where they are in terms of meeting their business objectives,” Woll says. “Most process plants don’t have real-time information available in terms of capacity and design parameters.”
How to better use the technology gathered during the past four decades is the challenge ahead. A deeper understanding of how a plant is operating as well as automating everything that can be automated is necessary to endure, says Woll, a featured speaker at a management roundtable during the event.
“We are a knowledge-based economy,” says Tom Wallace, global manager, PlantWeb, Emerson Process Management. “It is more interdisciplinary than it has ever been, integrating into multiple areas. Your knowledge needs to be deeper.”
Additionally, today’s knowledge is more specialized and complex and takes longer to acquire and integrate, he says. Further, explicit knowledge (training and documentation) is shrinking, while implicit and tacit knowledge (mentoring/coaching and communities of practice) is growing.
Consider that in 1969, it cost $24 billion to go to the moon. Today, it would cost an estimated $100 billion and take us 10 years to go back. Why? Because it originally took 400,000 people 10 years to make it happen and most of those engineers are retired or dead, explains Wallace. Most of the knowledge was not passed on. Critical drawings and blueprints have been lost. “Retain knowledge or pay full price to relearn,” he says.
“Companies may be inadvertently pushing critical knowledge out the door before replacing it,” says Wallace.
This isn’t a symptom limited to one industry or even North America, but a worldwide problem that needs to be addressed immediately, before it’s too late. In 1983, the 1.6 million experienced managers in the top 25 oil and gas companies was reduced to 600,000, and 60% of those knowledge workers will retire in five years, says Wallace. By 2010, the average age of the key workers remaining will be 51. Canada, Italy, Eastern Europe, Japan, and China are all headed in the same direction.
“The solution is to make the resources you have and the incoming generation able to do the job,” says Wallace.
The worldwide incoming workforce of top-rated college graduates has more choices, such as investment banks, consulting firms and high tech. The younger employees have new attitudes and expectations, according to Wallace. They want more opportunities to grow, faster advancement, more challenging work and ongoing skills training. If their expectations aren’t met, they’ll leave.
“The new hires must be twice as productive as present workers at age 25,” says Wallace. “And it takes seven years for new hires to achieve the appropriate competence.”
Knowledge retention strategies; knowledge transfer; capturing, storing, saving and sharing knowledge are among the solutions. Accelerated learning and training, and rethinking how existing resources are used and allocated are other concepts already in use.
BASF took what it knows about globalization to use automation as a value driver in the chemical industry. Globalization driven by low labor costs in emerging countries, stricter EU regulations for chemicals, and availability of affordable energy feedstock (raw material) caused BASF to rethink how its resources were used. The company invested $2.9 billion in 2001 in a joint venture with Sinopec to create a Main Automation Vendor plant in China, a vendor concept for automation used as part of the company’s contracting policy, according to Werner Setzwein, vice president, corporate engineering, electrical and instrumentation, BASF AG.
“You have to be a value-building company to meet the requirements of globalization,” says Setzwein.
Those who don’t dedicate the resources to know now, won’t be around in the marketplace of the future.
For a more in-depth look at the problem, the speakers recommend reading “Lost Knowledge: Confronting the Threat of an Aging Workforce,” by David W. DeLong or “World Out of Balance,” by Paul A. Laudicina.