Digitalization and middle-skill gaps: The moderating role of lean production

Digitization technologies such as the Internet of Things, material tracking and machine vision are transforming manufacturing plants’ operations enabling, for example, predictive maintenance and data-driven decision making. While automation had an unprecedented impact on production workers, the interconnected technologies that make huge amounts of operational data available in real time – the so-called Industry 4.0 – is affecting middle-skill jobs as production supervisors, team leaders, or maintenance and quality specialists. In order to base their daily decisions on such data, they need knowledge in statistics, IT and analytical skills, and relational skills to foster increasingly frequent interactions with production workers, who know better than anyone what such data mean. Firms adopting lean production, where production workers are already involved and data is already used for continuous improvement, might hold an advantage in having middle-skill workers prepared for this digitalization wave. Through a survey issued to 101 manufacturing plants of the Italian automotive supply chain, we showed that the presence of formal lean production programs negatively moderates the impact of digitization technologies on the presence of skill gaps in middle-skill workers. What emerges is the need, when digitalizing operations, of a holistic management innovation considering technology, inclusive organizational structures, and data-driven managerial practices.