Six Manufacturing Trends to Watch

We’re nearing the halfway point in 2017, and our manufacturing clients are keeping a close eye on several trends in the industry. While not all-encompassing, these trends continue to expand and shape the way manufacturers do business.

Our clients anticipate the prevalence of these particular trends to continue through the remainder of this year and into 2018 and beyond.

1. Re-Shoring

The current administration is definitely helping drive this initiative, but it’s not the only reason our manufacturers are trying to bring production and jobs back to the U.S.For the past few years, a renewed focus on “American-made”reveals the desire to be closer to customers and to cut costs. This has our manufacturing clients looking for ways they can effectively re-shore production operations. Companies will benefit from a skilled U.S. workforce and the positive image that American-made brings to their customers. They can also have more control over quality and benefit from savings in freight and delivery costs. We’ve seen a lot of variables come into effect as this trend continues to take hold, including the price of oil, increased automation and technology, and the value of the dollar globally, but our clients continue to work to find ways to reduce their offshore production.

2. Labor Shortage Continues

This too is not a new trend. Our manufacturers have become increasingly concerned about the number of skilled workers available to fill openings in the industry. Studies indicate that over the next five years, most manufacturers will have two job openings for every one qualified individual. Our baby boomers are looking to retire and the demand will increase even more.

3. Advanced Manufacturing and Automation

Partly in response to the labor shortage, but perhaps related more to the increased need for safer, more efficient workplaces, our manufacturers see an increased need for more digitally intensive manufacturing processes. We not only see an increase in the use of automation, but also in the use of soft robotics and less labor-intensive processes that utilize sophisticated technology to accomplish necessary jobs. We’re already seeing more advanced equipment being installed in many shop floors, and not in order to replace human workers. The equipment is designed to increase the efficiency of the work employees do, and our manufacturers say they expect those types of investments to continue indefinitely. The workforce will need to be receptive to the knowledge required to work in this ever-changing environment and move from a pure manual labor role to overseeing the new technology.

4. Data-Driven Processes

As data platforms, cloud storage and other data collection tools mature and become faster, less expensive and more powerful, manufacturing companies of all sizes can take advantage. Though many companies we talk to may be leery about the security, the reliability and the process of transitioning to more data-driven manufacturing, it’s clear that advanced analytics, data management and data storage platforms can provide new insights and more information on how to optimize and understand operations throughout the company. Some of the manufacturers we work with have already begun this transition, but many more are still in the understanding process. We expect the trend to continue as more and more companies begin to realize how adopting such processes and procedures can improve efficiency, agility and decision time. This emerging technology will enable management to use data collected by equipment to achieve better results.

5. Sustainability

As younger generations of workers continue to become more influential in the manufacturing space, we’ve already begun to see a shift towards conscientious and sustainable practices. More companies, particularly nationally, are focused on processes that reduce waste, are more efficient, and they are finding re-use and recycling opportunities for organizational by-products. We anticipate this trend to continue and to become even more prevalent with our clients in the region. As processes improve, there can be long-term cost savings based on the reduction of waste in the manufacturing environment.

6. A Shift to B2B Commerce

Amazon has flipped the retail market on its head, and has changed the way consumers buy products. Some manufacturers have taken a page from Amazon’s playbook and have invested in their own e-commerce website. For some of our clients, e-commerce isn’t part of the business strategy, but for others, a relatively small investment opens up a new, proactive direct-to-consumer product line that can help elevate the business’s bottom line.  The way people search for and ultimately purchase their products has changed immensely for consumers. We expect a similar trajectory for the B2B business market, and manufacturers throughout the region are poised to take advantage of the new revenue stream.

In speaking with our manufacturing clients, we know that all of them are focused on adapting to these trends in some capacity. We have no doubt these trends will continue to evolve and shape the way our manufacturers do business.

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