Manufacturing Industry Archives - USC Consulting Group

The COVID-era supply chain disruptions are slowly but surely easing up for manufacturers around the globe. While the worldwide market is not yet fully recovered, signs point to a strong resurgence in 2023, with a return to normalcy by 2024. Even though good news is on the horizon for manufacturers, there are still a number of challenges to be aware of that will impact day-to-day operations. Here’s an overview of a few of the top manufacturing challenges for 2023, and how to handle them.

Challenge: Legacy technologies

Many manufacturers operate with legacy technologies — outdated hardware or software systems. These outdated systems can cause disruption for an organization in a few key areas.

The first problem: Legacy technologies can cause efficiency issues. Since these systems can be years (and sometimes decades) old, they simply don’t have the same features and capabilities of newer software on the market. Additionally, these legacy systems can pose a security risk. Older technology doesn’t have the same safeguards as newer systems, and cybercriminals have a much easier time infiltrating outdated software than one that is up-to-date.

Despite these problems, manufacturers can be hesitant to change systems due to familiarity, not wanting to enact a full system overhaul, or a mix of the two.

Strategy: Invest in new technologies and smart warehouses

Investing in emerging technologies should be a priority for manufacturers heading into the new year.

It’s a wise strategy, not only to become more efficient and protect systems from infiltration, but newer technologies can increase safety in the workplace and free up employees to handle more productive tasks. A recent survey from Deloitte found that 85% of manufacturing executives think that some form of robotics on the production line could increase employee safety, and 78% agree that updated technology can minimize repetitive work, empowering employees to focus on more productive and impactful tasks.

Challenge: Inflation

Starting in mid-2022, inflation across all essential goods prompted public backlash, not to mention squeezing the wallets of consumers and businesses alike. Bearing the brunt of the blame was the global supply chain, and the bottlenecks and scarcity it caused in markets across the world. Although those pressures are easing headed into the new year, inflation will still be a factor in 2023.

Strategy: Re-evaluate costs during design

For manufacturers, inflation means more careful planning to ensure operations remain lean, mean and profitable.

One way of doing this is by implementing Design to Cost — a method in which a manufacturer combines cost management with decision-making during the design stage of a product. Rather than the normal method of thinking about costs after a rough design of a product is made, the unit and material costs are fully integrated during planning to ensure products are profitable.

This type of thinking seems to be the reality for manufacturers in 2023, as a recent Forbes survey found that 87% of manufacturing CEOs plan to increase prices in the new year. Therefore, it’s important for all manufactures to think ahead, and integrate material costs into their design process as soon as possible.

Challenge: Inventory uncertainty

Inventory uncertainty remains one of the manufacturing challenges in 2023. Despite the healing global supply chain, manufacturers still need to strike a proper balance between stockpiling inventory and buying just-in-time. Striking that balance can be tricky. Not getting it right can cause businesses to become over- or under-leveraged at a moment’s notice — affecting the bottom line in the process.

Strategy: SIOP

Sales, Inventory & Operations Planning, SIOP, takes the normal sales and operations planning process and makes inventory just as important of a variable and a strategic tool. Following this methodology helps manufacturers eliminate waste, increase efficiencies and achieve an optimal level between not enough and too much.

We recommend that the SIOP horizon be a minimum rolling 14-month period that gets updated monthly. The aim is to look ahead multiple quarters to make sure inventory is available exactly when you need it. Involving a wide range of departments such as sales, marketing, engineering and finance, SIOP is a system that involves the entire organization to ensure yearly goals and objectives are met.

If you would like to learn more about SIOP, download our (free) eBook, “Sales, Inventory & Operations Planning: It’s About Time.”

Keep moving forward

There will be manufacturing challenges in 2023 and beyond. By addressing your legacy technologies, adjusting to inflation fluxes, and taking the uncertainty out of your inventory management, you will be able to fine-tune your operations for optimal performance.

If your business could use some horsepower to power up your team on improvement initiatives, contact USC Consulting Group and we will put our over 50 years of experience to work for you.

One of the most significant threats facing the manufacturing industry is the ongoing labor shortage and how it’s impacting organizations across the nation.

Identifying viable solutions to overcome a labor shortage in any industry is challenging. However, the past few years have made it especially difficult for manufacturers to find skilled employees. The COVID-19 pandemic and The Great Resignation are two major factors that have negatively impacted the manufacturing industry.

How can manufacturers overcome The Great Resignation and attract young talent? Below, learn more about the labor shortage in manufacturing and how organizations can overcome this unprecedented workforce situation.

Understanding the Manufacturing Workforce

The manufacturing labor shortage is not new. In fact, manufacturers have dealt with the shortage for quite some time. Hundreds of thousands of manufacturing jobs have gone unfilled for years now, with several factors in recent years exacerbating the issue.

Alongside the pandemic, millions of Americans have quit their jobs recently, coining a new term: “The Great Resignation.” Employees are quitting their jobs for various reasons. Pew Research cites three, including low wages, feeling disrespected, and a lack of opportunities to advance.

On top of the pandemic and The Great Resignation, data shows that the labor shortage in manufacturing will likely persist. According to research from Deloitte, manufacturers in the U.S. are expected to have over 2 million unfilled jobs by 2030.

Millennials and Gen Z tend to have misconceptions about working in modern manufacturing. There’s a false impression that working in manufacturing means getting your hands dirty and performing rigorous manual labor for hours on end.

Those misconceptions, however, are far from reality. Employees in these roles often require specialized skills, knowledge, or training and work with cutting-edge technologies daily. Younger generations are digital natives, meaning they can learn how to use new technologies with ease. How can manufacturers make roles seem more attractive to young candidates?

How Manufacturers Should Target Younger Generations

Below are ways manufacturers can make manufacturing roles more attractive to garner newer, younger workers.

1. Leverage Social Media Marketing

Young people dominate social media platforms, whether Instagram, TikTok, Snapchat, or Twitter. While older adults also use social media, Millennials and Gen Z grew up with it, so it’s a major part of their daily lives.

Manufacturers should leverage their presence on social media platforms to reach younger audiences and improve their recruiting. Sites like LinkedIn or other digital job boards can also be useful for manufacturers looking to garner young talent.

Additionally, it’s reported that 70% of manufacturing job seekers prefer receiving text messages over emails or phone calls for recruiting purposes. Consider reaching out to candidates through social media or texting.

2. Emphasize New Technologies During Recruitment

Manufacturers that adopt the latest technologies should highlight their tech-savviness to potential candidates. Organizations should try to use their tech adoption as a unique selling point (USP) when recruiting – companies at the forefront of innovation will often be more attractive to candidates than those falling behind.

As mentioned earlier, Zoomers (another moniker for Gen Z) are digital natives. They can easily learn how to work with new tech. Zoomers will be likely to pick up new skills needed in the manufacturing industry.

3. Identify Potential Hybrid Roles

The significant shift to remote work has prompted many companies to adopt remote-first or hybrid-work models. By next year, it’s expected that 40% of organizations will transition to “Anywhere Operations” – a term that describes a digital, distributed workforce.

While many manufacturing companies have unfilled jobs that must be performed on site, they should consider identifying which roles could become hybrid. Other processes within manufacturing can be automated and allow employees to work remotely. If companies find a way to implement a hybrid model, they could appear more flexible and attractive to potential candidates.

4. Connect With Local Schools and Colleges

Professionals in manufacturing understand that young talent may not realize what a manufacturing role entails. By connecting with local educational institutions, these companies can work with students and educate them about manufacturing.

Miller Fabrication Solutions, a manufacturer in Pennsylvania, began visiting schools, adding representatives to industry-related advisory councils, and sponsoring robotics competitions in the community to appeal to young talent. Other manufacturers should follow suit and be more aggressive in their recruiting strategies.

5. Meet (or Exceed) Young Employee Expectations

According to Gallup, Millennials and Zoomers expect three important things from an employer:

The employer cares about their well-being.
They want employers to be ethical.
They value diversity and inclusion.

For example, striking a work-life balance, feeling recognized and respected for their individuality, and working for an ethical leader are all important factors employers should know. Meeting these expectations will help with employee engagement and retention, especially regarding young employees.

Building a Workforce for the Future

The pandemic, The Great Resignation, and the persistent labor shortages in manufacturing require organizations to find innovative ways to improve their recruiting, hiring, and retention efforts – especially when finding young talent in the field. Companies need to overcome these challenges and find young talent to replace employees retiring from the workforce for the manufacturing industry to thrive.

*This article is written by Devin Partida. Devin is a tech writer with an interest in IIoT and manufacturing. She is also the Editor-in-Chief of ReHack.com.

Tag Archives: Manufacturing Industry