Manufacturing Industry Outlook

Manufacturing Industry 2023 Outlook

Manufacturing Industry 2023 Outlook
Reading Time: 4 minutes

The future of work in this growing industry is appealing but comes with challenges. The manufacturing industry requires reflection, forethought, and intentional pivoting to navigate the tides of change in the upcoming years.

Read through this list of trends and insights and gain some perspective for your moves in the industry.

Manufacturing Industry Trends and Insight

Labor challenges and changes

The ebb and flow of the labor market influence the expectations of a company’s growth and production. 

The shortage of skilled workers has plagued many industries since the pandemic in 2020. The skills gap in U.S. manufacturing “could result in 2.1 million unfilled jobs by 2030,” according to Deloitte and NAM’s study. Companies are working to tackle this issue and remain competitive in today’s global market.

Three ways to simultaneously combat this problem are

  • Reinvisioning the talent pool. Garnering interest in the industry from as early as high school academics helps secure generations of potential new hires who are knowledgeable and eager to join the industry. Diversifying recruitment efforts by broadening searches to locations previously unsought or unthought of also helps expand the visibility of both open roles and undiscovered talent.
  • Incentivizing career growth. Improving training, implementing apprenticeships, and adopting upskilling practices lend themselves to long-lasting careers and ensure new workers have the skills they need to stay competitive in an uncertain job market. Career growth offers the industry sustainability while encouraging professional longevity.
  • Highlighting worker rights and safety. On the one hand, manufacturing organizations and unions committed to due diligence help protect workers’ rights while providing them access to resources they wouldn’t otherwise have. And on the other, the Federal Occupational Safety and Health Administration (OSHA) directives are considerate of how to ensure that workers can keep up with changes and remain safe in their work environment. These two halves of workplace necessities produce a balanced approach to securing employee health and wellness in the long run.

Technology on the rise

Tech advancements and their implementation have a hand in developing innovative strategies. Reducing costs, enabling more efficient processes and planning, and increasing production while vacant roles go unfilled are the advantages of digitizing systems in the manufacturing industry.

  • Automation has allowed companies to reduce costs and improve labor quality. In his piece, “The Future of Manufacturing is Digital,” Marcum author Ben Cook ensures readers that “Automation in manufacturing can reduce expenses by maximizing labor efficiency, reducing training time, and matching the talent to the task.”
  • AI has also proven helpful in many areas of the industry. One of the perks of being integrated into manufacturing systems is predictive maintenance, which helps reduce downtime and increase operation efficiency. With that said, only “9% of manufacturing organizations are leveraging Artificial Intelligence today.” -Indicating that many companies have yet to use AI and machine learning to their advantage.
  • The use of cloud-based planning has further enabled manufacturers to access real-time data and insights from anywhere in the world. This allows business leaders to make informed decisions quickly and assess potential outcomes through more accurate analysis.
  • Big data and data engineering is the next step for revolutionizing a digital front for the manufacturing industry. Managing data efficiently from all areas of a manufacturing business means improving product quality and production speed, increasing supply chain transparency, assessing performance issues, and supporting better inventory and logistics management.

Digitizing the industry in itself comes with an added challenge of tech-related threats. Cyberattacks have become a major concern for the manufacturing industry, as they can cause significant disruption to business operations. 

Cybercriminals increasingly target manufacturing companies with malicious attacks that can result in data loss, financial losses, and reputational damage. Josh Nadeau, a writer for Security Intelligence, lays out a roadmap of security threats from 2022 that manufacturers have been recovering from and highlights business leaders’ focus on making cybersecurity a priority for upcoming years.

The major problem areas among Nadeau’s list include

  • Nation-state attacks
  • Ransomware
  • Intellectual property theft
  • Equipment sabotage

Manufacturing companies must proactively protect themselves from these threats by implementing strong security measures and regularly monitoring their networks for any suspicious activity. Additionally, they should ensure that their employees are educated on the risks associated with cyberattacks and how to prevent them.

Industry maintenance

In the manufacturing industry, maintenance and performance are critical factors in ensuring the smooth running of operations. New policies and directives affect how companies organize and improve their processes.

  • Budgets and organization – Companies in the manufacturing industry looking to streamline their processes, reduce costs, and increase efficiency are identifying new opportunities for budgeting and organizing resources. Using data from various sources, such as customer feedback surveys, production data, and financial reports, helps companies better understand how to optimize their processes and create more value for their customers.
  • R&D investments – Government purchasing power as a means of financial support for the industry impacts job creation and research and development (R&D) funding for innovative tech to help companies improve products and processes. 
  • Performance efficiency – Improving upon a solid system is much easier than implementing a new strategy or expanding without assessing what’s working and what isn’t. Company inventory, production, and key performance indicators (KPIs) need a thorough evaluation and continued maintenance for better planning and issue troubleshooting.

With the right strategies in place, manufacturing organizations can leverage their operation assessments to improve their management and footing in the industry.

Market demand and supply chain management

The manufacturing industry is a complex network of production and distribution that affects the global economy. It’s driven by market demand, which determines the number of goods produced and sold. The supply chain is responsible for the efficient flow of raw materials, components, and finished products from the supplier to the customer. 

Both play an important role in ensuring that manufacturers can meet customer needs while minimizing costs. Grant Thorton reports that “out of the 19 sectors in manufacturing, the five fastest-growing sectors made up 40% of manufacturing output in 2022 — and that share is expected to expand to 44% by 2027.”

These five are:

  • Motorcycles, ships, aerospace products, and rail stock
  • Machinery
  • Computer and electronic products
  • Motor vehicles, bodies and trailers, and parts
  • Chemical products

This exponential output is due to pent-up market demand and supply chain disruption due to recent tribulations between Russia and Ukraine. Limiting the rise in unfilled orders and supporting manufacturing suppliers helps strengthen the supply chain and allows for a healthy flow of resources to needed parties in the industry.

The future of work for manufacturing

Today, the manufacturing industry’s growth and resilience rely on understanding the dynamics of long-lasting career paths alongside the emergence of evolving digitalized systems and processes. As companies foster competitive work environments and incentives for new hires, invest in advanced technologies, and reprioritize their position in the global market, positive developments are foreseeable results.

So, yes. The future of the industry is digital, but also human-oriented. By preparing future generations of the workforce for changes that’ll help manufacturing organizations remain competitive, the industry can provide meaningful experiences for their current and potential employees.

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