"It's What You Know", ME Online Web Exclusive, Feb. 6, 2006

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It's What You Know

Make sure that your engineers leave what they’ve learned on the job with the job they’ve left behind.

by Richard Bush

Managers in the United States are facing a new kind of workplace challenge. The largest generation in U.S. history is starting to retire.

When any part of the workforce leaves, companies stand to lose one of their most valuable assets—the knowledge developed by workers over time. The loss of the knowledge that comes from experience is felt in all areas of a company, but it can be keenly missed in operations where the theoretical meets the practical—in other words, in activities like the practice of engineering.

Now that America’s baby boomers are about to retire, it is possible that the brain drain will be unprecedented.

Loss of knowledge is a sobering issue for any company, but that’s not the entire challenge. According to many people, there may not be enough workers in the near future to fill the jobs left open.

By 2030, about 20 percent of the population—some 70 million Americans, or about a quarter of the current workforce—will be 65 or older, according to the U.S. Bureau of Labor Statistics. What will managers do when so many exit the workforce and take all that intellectual capital to the condo at the beach?

Historically, the U.S. has enjoyed a steady stream of scientific and technical talent from Asian countries—China, South Korea, Malaysia, Singapore, and Taiwan. Now, these countries have started offering incentives to retain their highly skilled personnel. They have policies in place—or are putting them in place—to make it more attractive for engineering students to study at home than to go to abroad. Countries are also trying to attract expatriates back to the fold.

Since September 2001, the U.S. has seen a decline in the amount of engineering talent entering its borders. Companies, particularly those in high-security enterprises, must consider how they will fill positions that are being vacated by retiring baby boomers.

As U.S. baby boomers retire, U.S. companies need to implement a strategic workforce plan.

Future job growth will be concentrated in highly skilled and knowledge-based work. By 2012, managers should see 21 million new jobs with only 17 million applicable workforce entrants, according to Diane Berry, managing vice president at information-technology consulting and market-research firm people³ of Bridgewater, N.J.

Organizations will face difficulty if they don’t have workforce strategies in place, she added.

Some managers advocate federal policy changes that would make it more attractive for experienced employees to continue working past retirement age. Managers at these companies understand the potential danger of losing seasoned staff without finding a way to retain the knowledge that will walk out the door with them.

Many companies are now instituting technology to collect and disseminate much valuable information that was stored in the heads of veteran employees. (Some of these ideas were reported in an article, “Share the Wealth,” in the December 2004 issue of Mechanical Engineering magazine.)

With the retiring workforce and the declining numbers of qualified engineers ready to step up to the plate, capturing knowledge in a way that allows it to be easily extracted and reused is imperative in a workforce strategy. The responsibility is on technology vendors to provide technology that supports an overall strategy—a strategy that will be highly dependent on knowledge capture, reuse of knowledge, and the overall management of intellectual capital.

Knowledge can then be converted into information that can be used to automate product engineering process standards. This automation process will help companies do more with less, allowing them to apply more of their energies to breakthrough product innovation.

Here's an example. ANCA of Sydney, Australia, makes computer numerically controlled machines for the machine-tool and metal-based industries. It faced cutthroat Western competition compounded by its distance from customers in the Northern Hemisphere.

To manage product data and retain process information, ANCA’s managers turned to product lifecycle management software, which files information and keeps it available for all company engineers. In addition to helping reduce production times by 50 percent, the technology is also helping managers automate processes and preserve data for future use.

The company uses NX digital product development software and Teamcenter digital lifecycle management software from UGS Corp.

Another area where capturing knowledge is increasingly valuable is in digital simulation. The technology helps managers make faster and more informed decisions. Overall, increasing use of digital simulation leads to innovative products that are more marketable, and have better performance and higher margins, all of which directly benefit the bottom line.

In the case of simulation, or analysis, many of the experts are highly trained engineers. In typical fashion for this elite group, the analysts aren’t part of the mainstream and regard their expertise as a black art, with very little sharing of the rationale for why things are analyzed in a particular way.

Technology opens up the black art to everyday users, letting them essentially get a glimpse behind the curtain, and passing on the insights that experts have gained during their years of experience.

“Using digital simulation and virtual prototypes allows you to explore many, many different concepts very quickly,” said Steve Rohde, director of automotive operations at Quantum Signal LLC. “This ability to explore so many more variations and still get to market quicker than ever definitely translates into high levels of product innovation.”

Quantum Signal, based in Ann Arbor, Mich., makes software development kits that are used in industries ranging from homeland defense to automaking.

So managers at successful engineering companies need to remember: When employees leave, their on-the-job experience and the things they’ve learned for themselves leave, too. Managers can make sure this knowledge stays behind, even when an engineer doesn’t.

Richard Bush serves as marketing director for the NX digital simulation tools at UGS Corp. in Plano, Texas.