Despite the gloomy economic news, US manufacturing is still poised for a decent 2022. In fact, July was a surprising month with output rebounding and exceeding predictions after a June decline. While this has some analysts optimistic for the second half of the year, there are four key areas manufacturing executives will need to keep a close eye on.
Reskilling and Recasting
Talent scarcity is hitting manufacturing hard. This is naturally advancing the discussion of elevated pay to attract more workers. Before hiring, however, some reskilling should be considered. In line with digitization and automation strategies, reskilling existing employees to take on jobs that cannot be digitized or automated in the short term is a smart strategy.
Recasting, on the other hand, is a heavier lift. Manufacturing has suffered a public perception hit and the sector needs a marketing makeover. Spotlighting modern facilities, career mobility, flexible work models, and well-being are just a few areas that can sway folks from competing industries and appeal to younger workers.
Nearshoring and Onshoring
According to survey data from Deloitte’s “2022 Manufacturing Industry Outlook,” 24% of manufacturing executives are considering moving some of their operations closer to end customers. The snags that mired 2020 and 2021 are shifting the perception that highly fragmented globalized networks are lean, efficient, and profitable for eternity.
In line with nearshoring and onshoring is the integration of supply chains. To facilitate supply and demand planning and visibility, enhanced data integration is critical. The White House released a “100-day supply chain review” document in 2021 and 2022 recommending a series of initiatives companies can take to strengthen resiliency.
Management enjoys bringing operational efficiencies to scale. But as mentioned earlier, smarter factories are also great marketing to attract talent. The same Deloitte study found just under half of manufacturing executives (45%) expect additional increases in operational efficiencies based on investments in the industrial Internet of Things (IIoT). Connecting machines and automating processes is no longer a niche area. Moreover, the US has some room to run in this regard, already trailing Germany, Singapore, and South Korea for example in the number of industrial robots as a share of manufacturing workers.
There isn’t an industry in 2022 that does not have cybersecurity as a key focus area. High-profile attacks across governments and industries make cybersecurity a risk management essential. Beyond simply financial losses or intellectual property breaches due to cyber criminals, most companies run the risk of being completely shut down and their supplier networks harmed. Add remote work to the mix and manufacturers are more susceptible than ever. Increased departmental oversight, employee training, and retooling will be the norm for those seeking to minimize their exposure.
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