It’s 2024 and, as anticipated, the manufacturing industry continues to register impressive figures. The added value of the total manufacturing market is expected to reach US$15.36tn in the following months and the number of enterprises operating in the field is likely to hit 7.11m by year-end. It’s also predicted that the industry will continue to grow at an annual rate of 3.6% until 2028, and possibly reach $860 billion by 2031. With the fast pace of tech advances and innovations and the current consumer society we’re living in, it’s hardly a surprise that the manufacturing market is thriving.
However, just because things seem to be going uphill in this fast-developing sector doesn’t mean stakeholders are enjoying a smooth and trouble-free journey. If anything, the ongoing development of the manufacturing industry adds new layers of complexity and with them, a whole new range of challenges and obstacles arises.
It’s therefore important for manufacturing enterprises and those looking to break into the industry to keep abreast of these changes and be aware of the hurdles that lie ahead.
Workforce challenges
As the manufacturing industry is getting bigger, the number of qualified workers in the field is shrinking. Contrary to common belief, the prevalent concern that the increased use of technology in professional settings is going to cause major job losses doesn’t seem to apply in this case. Over the years, the industry has incorporated a wide range of tech solutions to automate processes like the injection moulding of large plastic products and streamline operations.
However, this hasn’t led to a concerning decrease in the number of available jobs or major layoffs, as expected. Instead, we’re witnessing a reversed scenario where companies are dealing with labour shortages and difficulty in recruiting skilled professionals.
There’s a huge discrepancy between job availability and workforce availability caused by an increasing skill gap and insufficient qualified labour. The fact that many experienced employees are approaching retirement age and leaving the workforce is making matters worse as there are not enough capable candidates to fill in their positions.
This is posing numerous challenges for manufacturing companies, leading to issues such as reduced efficiency and productivity, slower rate of development, higher margin for error and difficulties in meeting growth objectives.
Potential solutions that can help manufacturers address these problems include investing in training and development, entering partnerships with educational institutions to form the next generation of employees and offering better work opportunities to make job vacancies more attractive to potential applicants.
Embracing technology
Technology serves as a driver of growth for many industries and manufacturing makes no exception. Leading companies in the field like HSV TMP base their operations on cutting-edge technologies to improve efficiency and boost productivity levels. Implementing technological innovations such as artificial intelligence (AI), robotics, or the Internet of Things (IoT) can help businesses find viable solutions to longstanding problems and open the door to numerous opportunities.
However, for all the advantages tech adoption provides, it also brings along a series of issues and challenges that many companies have difficulty tackling. First, the sheer number of options can turn technology adoption into a cumbersome task. Companies have to evaluate and test a variety of different systems in order to find the ones that suit their needs.
The resistance to change is also a well-known issue in manufacturing. Although many businesses recognise the benefits that technology provides, a large percentage of them are still reluctant to take the leap as they fear change and their company culture doesn’t promote adaptability.
Many employees are not familiarized with these new technologies, so they require extensive training in this respect which implies considerable time and money investment. On top of that, the acquisition of tech tools also represents a major expense in itself that not all companies can afford to cover.
Then there’s also the challenge of integrating these technologies within existing structures to ensure seamless workflows. Numerous issues can arise along the way and business leaders have to take into account and prepare for all potential scenarios.
Ensuring data security
Those who have been brave enough to go down the digital transformation path and fully embrace the power of innovation are dealing with a different type of challenge stemming from the increasing amount of data they collect.
In a highly digitalised world where data serves as currency, companies that hold vast amounts of sensitive data are prime targets for cybercriminals. This makes data security a crucial issue for manufacturing enterprises which often find themselves in the fire range of hackers and other malicious entities trying to gain access to their databases.
Even if they don’t fall victim to hacks and data breaches, manufacturing companies still have to deal with compliance challenges. If businesses fail to comply with applicable data security regulations in their region and don’t meet all requirements in this respect, they risk severe penalties that can have far-reaching negative consequences.
Sustainability
In a world that’s battling a severe environmental crisis due to climate change, increased pollution, depletion of natural resources and other similar issues, manufacturing companies are under growing pressure to switch to green solutions and ramp up their sustainability efforts.
This pressure comes from all sides. On one hand, consumers are becoming more environmentally conscious and favour companies that align with their eco-friendly vision and values. As a result, manufacturers have to adapt their services and products to meet customers’ expectations if they want to stay in business.
On the other hand, investors and partners are also expecting companies to adhere to sustainable principles and do their part to protect the environment, so taking the sustainability route becomes a requirement for getting investors’ attention and building solid partnerships.
Lastly, manufacturers also face increased scrutiny from local authorities, prompting them to change their processes and reduce their carbon footprint in light of new regulations on environmental protection.
As you can see, 2024 is shaping up to be a year filled with both challenges and opportunities for manufacturing stakeholders and their ability to navigate this ever-changing landscape will ultimately determine which way the balance will tilt.