Manufacturing Trends in 2019
If you’re not already thinking about next year, you’d better start now.
We’ve survived a recession and rebuilt the manufacturing sector. It’s bigger and better than ever.
So, what’s next?
Let’s look at some future trends in manufacturing to help keep your head up, proud, and clear of disaster.
1. The Ups and Downs of Manufacturing
According to Interact Analysis, “global manufacturing output value will dip in 2019 … the downturn however is predicted to be mild and short-lived, with growth accelerating again in 2020.” This dip is a part of a 10 year manufacturing industry trend. These ups-and-downs are nothing new, but they can take a business by surprise. An expected dip doesn’t sound too intimidating, yet it’s something to prepare for.
Despite this forecast, the MAPI Foundation expects manufacturing to see a full recovery from the 2008 recession by April, 2019. Time to celebrate. The value of manufacturing is constantly rising, despite the occasional pitfall.
According to Klaus Schwab, founder of World Economic Forum, we are currently experiencing the Fourth Industrial Revolution. Since the popularization of computers, the development of technology within military, industrial, commercial, and personal use has skyrocketed.
The Fourth Industrial Revolution is defined by “technology breakthroughs in a number of fields, including robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, The Internet of Things (IoT), 3D printing, and autonomous vehicles.”
We see it in retail, marketing, and our personal lives. Technology is making business more efficient in terms of communication, cash flow, documentation, and forecasting. While we rely more and more on technology in society, businesses are leading the way behind the scenes. Manufacturing is at an all-time high in terms of efficiency due to the technological resources available.
2. From Digitization to Digitalization
Yep, there’s a difference. Manufacturers have been digitizing for many years, putting data into digits. They’re substituting hard copies for soft copies; a thing becomes a digital thing. It’s that easy. Think about Neo going into the Matrix.
Digitalization is the use of technology to better your business. So you can think of digitization as a subset of digitalization. Now, if Neo wasn’t actually turned into numbers and had a great network of social media outlets, the Matrix might be less exciting.
The Internet of Things (IoT) has changed the way we manoeuvre in the business world. Instead of just substituting non-digital platforms, we’re modifying the entire way we connect modes, collect, track, and understand data, and handle orders and purchases. With technology’s ongoing development, IoT might be more than just a manufacturing trend.
Omni-channel doesn’t only affect retail marketing. It goes all the way down the line, providing consumers with transparency in terms of their supply chain and logistics processes. This transparency helps the customer with not only ordering, returning, and reviewing your product, but can even help you and your partners communicate and monitor your supply chain.
Omni-channel design allows manufacturers “timely and accurate visibility to true customer demand and consumption at the shelf or production line, and … the ability to fulfill orders online … profitably.”
Omni-channel will help you save time and avoid miscommunications. Get digitally interconnected. I’m imagining some of you getting tangled in wires and charging cables. It’s not like that. Sorry.
You’ll have to do better than this.
According to McKinsey & Co’s analysis, “of the total potential value that can be unlocked through the use of IoT, 40 percent of this value, on average, requires multiple IoT systems to work together.” You can have all of the “things” you want, but if they’re not interconnected, they’re not going to be effective.
Good news for manufacturers, IoT is more helpful to B2B connections, rather than B2C connections (although, extremely beneficial for both settings). Since manufacturers have so many connections and reports, going digital is a must. Digitalization allows you and your team to access data in real time and creates a shorter time to market.
McKinsey claims that by 2025, IoT will have the biggest economic impact on factories and manufacturers than any other setting. IoT already reaches between $1,210 – $3,700 trillion each year. The major applications expected to be impacted include “operations optimization, predictive maintenance, inventory optimization, and health and safety.”
3. Costs: Environment & Efficiency
As I stated, manufacturing has a huge impact on society. It takes up ¼ of all energy used. As a manufacturer, you should be looking into your environmental impact.
As the US and China reflect on their outputs, in terms of both waste and productivity, we are seeing more environmental consciousness. I can’t claim that environment consciousness is a manufacturing trend, but I can argue that recycling is. Where recycling has gained popularity, we should consider it as a last resort in our manufacturing practices. Recycled materials still become waste, the process is just delayed.
It’s more than just recycling. It’s about minimizing waste by evaluating operations and making sure they are as efficient as possible. Use recycled bulk packaging, invest in biodegradables, be transparent with your product information and conscious about your environmental impact. For a glimpse into the future, download the OECD Environmental Outlook to 2050.
Being energy efficient doesn’t only help the environment, it helps you too. By improving energy efficiency, manufacturers and distributors can reduce their carbon emissions, and at the same time, reduce costs and improve overall equipment effectiveness.
Manufacturers may face pressure to reduce costs and increase output. Thankfully, managers who make energy efficiency improvements are usually rewarded with increased output and reduced operating costs. Monitor and maintain your machinery and keep those wheels spinning.
For more manufacturing industry news on environmental laws, see
4. Labor/Skills Gap
Manufacturers have been making record breaking developments in terms of speed and efficiency over the past year. Real manufacturing output gained a 75% increase in 25 years. Unfortunately, many of these developments resulted in employee displacement and job replacement (28%). Technology and machinery save time, money, and space. So while manufacturers were developing, the job bank was not. This is not news.
Automation replaces humans. We are not perpetual-motion machines. It just so turns out that machines have the ability to be more productive, cost efficient, and even reliable. I’m weeping for us too. But despite the presence of these machines and their tendency to displace workers, there is still a skills gap that leaves manufacturers a little nervous.
The latest trends in manufacturing show a deep concern over future talent. A high majority of executives claim the search for skilled workers is bleak.
The skills gap is extremely detrimental. The Manufacturing Institute claims that between 2015 – 2025, close to 2 million out of 3.5 million required manufacturing jobs will go unfilled due to the skill gap. This impacts everyone. “Every job in manufacturing creates another 2.5 new jobs in local goods and services.”
Technologies are advancing quickly and experienced skilled workers are aging. The combination of advancing technologies and the shortage of workers is expected to expand as US manufacturers face the challenge to attract skilled workers.
“There has been a growing focus on server and storage virtualization technologies, mobility, Big data/analytics, business intelligence, cloud computing, next-generation workspace, and collaboration technologies from SMBs. However, some of the challenges faced by SMBs are IT budget, lack of leadership initiative in implementing IT changes, lack of IT knowledge to determine the ROI of IT investment in the business, and lack of skilled workforce.”
So while manufacturers see an increase in digital solutions, they lack the people power and know-how to use their resources effectively. Yes, manufacturing technologies have replaced jobs substantially, allowing manufacturers to save on employment costs and boom financially, but something is missing. The integration of new technologies also require analysts, IT professionals, and maintenance workers, amongst others.
As a manufacturing leader, you need to look for ways to attract and retain talented workers. If you’re worried about meeting customer demand in 2019 and beyond, start recruitment early, provide additional training courses, and offer more than market rates.
2019 is going to take some planning. There’s both bad news and good new for manufacturers. To get ahead of next year, click here for some planning suggestions.