The manufacturing sector has been changing considerably over the last 20 years. Many of these changes have been exacerbated by the pandemic.
Investors, managers, and employees in the manufacturing sector should be aware of some of the most significant changes on the horizon. Here are some of the biggest trends shaping this sector over the next year.
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There will be a greater focus on modernization.
Manufacturers are going to have to do everything possible to modernize their facilities. This entails investing in new equipment.
Fortunately, modernized equipment doesn’t have to be purchased new. Some companies can find great used machine tools, which can be purchased at a discount.
Production per employee is expected to continue to increase.
The manufacturing sector has been moving jobs overseas for years. This is a pattern that is expected to continue. The number of jobs decreased 2.4% between 2002 and 2012. It has declined another 0.5% over the past ten years.
These statistics would lead most people to think that production would decrease. However, productivity is expected to be 2.4% higher than ten years ago. Growth in productivity is attributed mainly to advances in technology and superior training.
There will be a much more significant focus on adaptability.
Different segments of the manufacturing sector have faced varying levels of challenges. Some have held oligopolistic holds on the market, which means they didn’t have to respond to the same threats from competitors. However, other manufacturers face much fiercer competition and must react accordingly to changes in the industry.
Manufacturers that used to thrive on complacency can no longer do so. The manufacturing industry faces a perfect storm of challenges, especially as they gravitate towards a post-pandemic world. They must be more responsive than ever. Manufacturing business models will need to be modified to survive the fitness approach.
Manufacturers are preparing for the threat of ongoing supply chain shortages
The COVID-19 pandemic has played a huge role in the supply chain shortages the manufacturing sector has faced over the last two years. Moreover, most industry experts anticipate that the problem will last well into 2022.
Even after supply chain problems caused by the pandemic start to wane, memories of the frustrations will not evaporate anytime soon. Manufacturers will realize that they need to be more responsive than ever to future problems that could disrupt the global supply chain.
They will need to brainstorm solutions to deal with these potential problems. This includes rethinking the approach to globalization. Some manufacturers are likely to bring jobs back, so they don’t worry about global supply chain distribution problems. They must also have backup options for their suppliers because they have learned from the pandemic that a single supplier can be devastated by a pandemic or natural disaster.
There will be a greater focus on employee health and well-being.
Companies in virtually every sector are facing significant employment shortages. The manufacturing industry is no exception.
One of the biggest reasons many employees are reluctant to return to work is that they are still concerned about contracting COVID-19. One poll found that 33% of people that have not returned to work are doing so because they are afraid of getting infected.
This underscores the concerns that employees have about their health. Manufacturing companies are starting to realize they need to do more to promote well-being. The pandemic might have opened their eyes to this issue, but the lesson will need to be applied in other ways. They will need to do more to prevent accidents at work, help with stress management and implement other policies to keep employees safe and healthy.
Manufacturers are investing more heavily in automation and artificial intelligence.
Every industry has been affected by advances in artificial intelligence. However, the manufacturing sector has been more dependent on AI than most other companies.
Manufacturers are investing more money in robotics and automation than ever. They have found that automation is helping reduce their cost structures. They also can use artificial intelligence to make up for labor shortages and skill gap problems.
Manufacturers are relying more on cloud technology to facilitate remote management.
The manufacturing sector has also become more dependent on cloud technology in recent years. Cloud technology offers tremendous benefits to companies in every industry. For example, they can use the cloud to store massive amounts of data, which helps with compliance, decision making, and trend forecasting.
However, the cloud also offers other important benefits. Manufacturers are using cloud technology to manage their enterprises remotely. They have found that it can lead to greater responsiveness during crises when managers cannot be on site.
