The COVID-19 pandemic, international security problems, political reforms, and climate shifts are just a few of the factors contributing to a challenging environment in the manufacturing world. However, there is a silver lining and, in fact, the manufacturing sector is expected to grow through 2022.
While there’s a positive forecast, manufacturers continue to face several challenges, especially given the tough competition, continuously changing customer expectations, and digital revolution. Read on to find out more about the top challenges in the manufacturing industry, as well as their potential solutions.
1. Finding and keeping labor
Manufacturing isn’t the most appealing industry for millennials or GenX. A large percent of the current workers within the manufacturing industry are nearing retirement. The use of unskilled or trainable workers is not as effective because the adoption of technology requires a more sophisticated workforce. This scenario is very challenging for manufacturing entrepreneurs looking to hire and retain people.
Offering a strong compensation package, perks, health benefits, and extra vacation could be a few ways to attract talent within the manufacturing landscape.
2. Maximizing automation
Fierce competition and new customer expectations pressure manufacturers to make use of smart technology to optimize processes, mitigate waste, cut costs, and become more sustainable.
Industry 4.0, the internet of things, robotics, and artificial intelligence are all buzz words within today’s manufacturing landscape. They are all useful to maximize automation and cope with the lack of labor, while still keeping up with the production levels.
3. Controlling inventory
Inventory management, from raw materials to finished goods, remains one of the main challenges manufacturers face today. Managing inventory manually is inefficient and prone to human errors.
Thanks to manufacturing software, it is possible to automate inventory management, stay on top of material availability, optimize manufacturing processes, and essentially become more efficient.
4. Forecasting demand
It is essential to be able to forecast the demand for products in order to stay lean and produce only as much as necessary without overstocking. Many manufacturers lack the necessary tools that could enable them to estimate how much they should sell within a given period of time.
Accurate reporting tools make it possible to plan inventory and production, helping manufacturers make informed decisions, based on real-data.
5. Supply chain disruptions
Supply chain management is an important consideration for manufacturing businesses, but the COVID-19 pandemic has led to serious disruptions. Inventories are at historical low levels, which means that some products cannot be manufactured. Some manufacturing facilities have been forced to shut down due to the lack of material availability.
Bottlenecks in production are another reason for concern. For example, the lumber shortage and demand for steel have significantly impacted the construction industry, and a steep increase in construction material costs are causing trouble to businesses in this field.
Agile companies with a strong ability to adapt and a focus on local production have a strong advantage and can benefit from the resurgence of “Made in America” products.