The Future Of Manufacturing: What Executives Are Saying
Before the manufacturing industry was brought to a standstill, manufacturers were mostly concerned about tools and devices that improve the efficiencies of their workforce and processes. Based on findings from the ‘State of Manufacturing: CEO Insights’, Forbes explains why automation will be the driver for self-sufficiency and efficiency in the near future.
Because of the unprecedented disruptions that continue to have a global impact and overtook the first half of 2020, manufacturing executives are looking to the future.
While it’s difficult to predict the future, new survey data released in the recent State of Manufacturing: CEO Insights report highlights key issues facing the industry, what’s likely to happen next and what needs to happen in the long term.
The mantra of executives going forward is control what you can, manage everything else. Today’s period of uncertainty has uncovered factors that manufacturers can leverage to maintain and improve efficiencies and competitiveness. From supply chains to workforce, manufacturers must be better prepared to quickly adapt to fluctuations in demand, whether times are tough or business is flourishing.
In the recently released report, manufacturing executives outlined notable insights relevant to the current state and future of the industry:
Over 50% of executives cite minimizing costs to maintain profitability as a top challenge they’re currently facing.
For manufacturers, leading short-term concerns are costs and profitability. To deal with these short-term challenges, executives are creating succinct lists of priorities as a means to ensure financial resilience. As discussed in the report, manufacturers must adopt new mindsets that continually size up new opportunities created by current and future disruptions, while putting processes in place that enable them to quickly leverage those opportunities to their advantage.
A key component to lessons learned is the need to improve data collection and analysis to help control operational costs. Now more than ever, industry leaders report that better data helps manage processes by allowing manufacturers to react quickly and fix what needs to be fixed while being nimble enough to make pivots. Many manufacturers striving to use this strategy say interruptions and breakdowns are then minimized, further improving margins. The glaring need for innovations in supply chains, including reshoring, will be aided by advanced analytics because they increase efficiency and minimize waste and enable significant cost savings.
65% of executives say market uncertainty is the challenge they are most worried about.
For most manufacturers, the market is in some level of turmoil. For some, demand has dropped; others report the opposite. Regardless of the situation, this turbulence has made it difficult for industry leaders to plan. But one approach many manufacturers are taking is examining their supply chain and its weak points. They know the importance of reducing the risk of shocks as much as possible and a durable supply chain is at the top of the list.
During a recent live event previewing report data, executives identified one of the roots of our supply chain problems as concentration, with these manufacturers reassessing how much concentration risk they are now willing to expose themselves to. Most manufacturers have long been reliant on a limited group of suppliers, who may even be located in the same country or region.
The last six months have displayed the power that just one disruption can have – political or environmental, among others – easily blooming into a major domino effect of disturbances. This instigation has caused supply chain reinvention which will include near- and re-shoring, improved visibility for every step, local logistics hubs and collaboration among suppliers and manufacturers. Already, manufacturers report embarking on domestic investments to reshore some of their production with COVID-19 likely accelerating this trend.
Manufacturers are looking to achieve a balance of risk mitigation and capacity management. Diversification of suppliers is one option, although there are often costs that come with that. One tactic trending in executive strategy is to manage costs while diversifying supply chains through digital transformation projects. This approach will improve efficiencies and keep costs, like labor, manageable.
Further, manufacturers can minimize risks by broadening offerings and focusing on specific solutions and production processes. Optimization processes and near-shoring enable a level of customization not previously possible, without out-of-control costs. Manufacturers know this will allow more flexibility, innovation and broadening of product offerings.
As recently released in the report, many manufacturers are recognizing reshoring will be made possible through automation.
63% of manufacturers say that enabling more remote employees through digital solutions will be a long-term impact of COVID-19.
For some manufacturers, attracting high-skill talent has been a continual challenge. But now that many manufacturers have adapted to and continue to refine remote working, they’re able to think differently about sourcing labor.
Previously, if the best talent for a role was based in certain geographical areas – maybe because a local university has a great program and a lot of graduates – this restricted where manufacturers could be located and how much talent they could source. They were then limited to certain regions or had to support widespread relocations of talent. But now more than ever, the eyes of manufacturers are being opened to the advances in remote work technologies. The best talent could be almost anywhere, opening up many more options for manufacturers who need to hire highly skilled workers.
Digital transformations also play a major role in enabling manufacturers to explore new innovations. Artificial intelligence, for example, is able to perform tasks at scale and speed that would be impossible for an individual to do. More and more, AI will help manufacturers innovate and take their production to new levels, without wasting resources.
Industry leaders have identified these essential trends during this unprecedented time as a means to drive manufacturing toward innovation and IoT value predictions of $11 trillion by 2025. But it will be a new type of manufacturing using robotics and electronics which will also help attract the workforce talent manufacturers are clambering for.
Of course, there will always be challenges in manufacturing, but the future demands creativity and resourceful leadership. We could easily fall back into old habits and leave ourselves vulnerable to further disruptions. But this is clearly an opportunity to think of better long-term solutions that support these requirements for adaptability and resilience.
This period of disruption also presents significant opportunities for innovative thinkers who are ready to lead and do things differently.
The challenging climate has caused manufacturers to recognize the strategic need for digital transformation and a culture of innovation. Executive teams know they must make sure that we reform our supply chains, from raw material to finished products, in order to be as self-sufficient as possible and prepared for whatever the future brings. If we can improve efficiency, then we can reshore and make more of our products at home. Automation will be the driver of this transformation, and of an industry that will be exponentially more efficient and exciting.