Tag Archives: Tariffs

Labor shortages, supply chain disruption, and technological change have been cause for concern for executives in the manufacturing industry the last few years. As 2024 draws to a close, business leaders are looking ahead to the coming year. What will manufacturing be facing in 2025?

Here are five trends and challenges we’re expecting for the manufacturing industry in 2025 and advice on how to handle each issue.

1. Digital transformation

It’s not that AI and technology are coming for people’s jobs. It’s about this technology being able to streamline how the job gets done, adding speed, quality, and efficiency to the process. The 2024 Manufacturing and Distribution Pulse Survey Report by Citrin Cooperman found 43% of leaders in manufacturing are currently implementing advanced tech programs and policies in their organizations.

It’s involving AI and Machine Learning to optimize processes and outcomes, the Internet of Things (IoT) which will use smart technology to have machines communicate their own glitches and needs for maintenance, and robotics and automation for tasks like assembly.

The end goal is to increase predictive maintenance, optimize processes, ramp up quality control and provide real-time data for better decision making.

What manufacturing should do:

At USC, we help clients use AI, Machine Learning, and Predictive Analytics to optimize their workflows, processes and demand forecasting. Companies should be using these techniques now, if they’re not already. It’s also crucial to upskill existing employees to be able to work with the new technologies. That’s a win-win for manufacturing companies and their workforce. Higher skilled employees are happier, more effective, and more loyal to the company.

2. Talent

Workforce development, skills gaps and employee retention will be the top issues in regard to talent in 2025. It has been estimated that 1.9 million manufacturing jobs could go unfilled over the next decade if talent challenges aren’t solved. The old guard, long term, experienced employees that executives rely on to get the job done are retiring without a strong pipeline of younger workers to take their place. In addition, the labor force itself is concerned with flexibility, hours, pay, child care and more.

But there’s also the issue of skills. A new study by Deloitte and the Manufacturing Institute found that the need for roles requiring higher-level skills, including technical, digital and soft skills are growing at a rapid rate.

What manufacturing should do:

Working with local trade schools, community colleges and even high schools to offer internships and apprenticeships is a great way to build the talent pipeline.

Also, offering current employees training in digital skills, as well as soft skills like leadership and management training, will provide the company with higher-skilled workforce. This will create a sense of loyalty and pride in the employee knowing the company is investing in them with an eye toward the future.

3. Sustainability

The focus on sustainability is everywhere. Manufacturers are feeling increased pressure to become greener, and as a result are implementing environmental, social and governance strategies.

There is governmental pressure because of tighter environmental standards, but there is also pressure coming from consumers who increasingly want and seek out goods that are manufactured with “clean” methods.

What manufacturing should do:

Continuing to investigate efficient technologies like solar and wind, and making investments in machinery and other assets that are more energy efficient, will be crucial in the coming year and beyond. It will help lower operating costs while satisfying the demand from consumers.

4. Supply chain

Supply chain disruption that plagued just about every business on the planet during the pandemic has eased to a great extent, but challenges are still out there. Lead times for materials is still high, and the cost of transportation and logistics is weighing on companies’ bottom lines.

Shipping delays and uncertainties are a big part of the problem, with headlines nearly every day of yet another cargo ship being attacked at sea.

Then there’s the issue of labor shortages all along the supply chain, both in foreign countries and the U.S., with labor strikes slowing down delivery and labor shortages of truck drivers adding to the snarl.

What manufacturing should do:

It’s extremely challenging for companies to combat labor shortages and shipping delays in their supply chains, but smart demand forecasting and considerations like reshoring supply sources can help. In addition, establishing a strong Sales, Inventory, and Operations Planning (SIOP) program will optimize your supply chain.

5. Tariffs

With a new administration may come new global trade policies, and it’s not just the U.S. that held elections in 2024. Many countries around the globe are restructuring leadership. Ongoing U.S.-China trade tensions will certainly intensify as a result of the tariffs the new administration is proposing, driving up the cost of materials for manufacturers.

What manufacturing should do:

Many manufacturers are ordering supplies and materials now, before the new administration takes over. Stocking up now, in case of major price hikes later.

This issue goes hand in hand with supply chain disruption and is one more reason to consider reshoring and nearshoring of supplies and materials.

The Outlook

Despite ongoing challenges, 2025 looks bright for manufacturers to grow their businesses. Adapting operations to be sustainable and incorporating advanced technology with an upskilled workforce to manage it, business leaders will enjoy major improvements to productivity, their supply chain, and customer satisfaction.

At USC Consulting Group, we’re here to help manufacturing companies become more productive and profitable with standardized operating procedures, enhanced management operating systems, SIOP improvements, and other strategies to find opportunities for greater efficiencies, increased throughput and bottom line results. Contact us today to have your operations humming in 2025.

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From foundation concrete to tile adhesive, the average house contains many different components. Building materials manufacturers are, of course, responsible for producing these essential supplies.  Collectively, they are the backbone of the American housing market. These businesses are poised to continue their successes into the new year, a comforting sign for U.S. home builders, especially those who intend to accelerate operations in 2019 to bridge the inventory gap, according to research from the National Association of Realtors.

That said, building materials manufacturers will also face significant obstacles throughout the coming year. Here are a few of those challenges and how they might affect the organizations that form the foundation of the domestic housing market:

Wildfires

More than 52,300 separate wildfires burned through approximately 8.5 million acres in 2018, according to analysts for the National Interagency Fire Center. While neither of these figures surpassed historic highs, together they still paint a disturbing picture. Between 2008 and 2017, roughly 60,300 wildfires occurred annually, each one burning around 105 acres of land, but in 2018 the average wildfire claimed 163 acres. Suffice it to say, wildfires are getting worse, so their repercussions on related industries, such as building materials manufacturers, will continue to escalate.

This disturbing development is especially concerning to businesses in the forestry industry, which supplies the softwood and hardwood used in home construction. While reports from the Department of Agriculture show that forest inventories have steadily increased over the last seven decades, the recent intensification of wildfires threatens American woodlands and, by extension, the lumber suppliers that depend on them. Unfortunately, the NIFC believes that significant fire activity is likely to unfold over the course of 2019, meaning timber manufacturers will have to grapple with the threat of wildfire over the coming months and look for ways to mitigate the associated production risks.

America’s global trade showdown

When the Trump administration announced that it would increase duties on aluminum and steel imports back in March 2018, leaders in the home building space immediately criticized the decision. Randy Noel, chairman of the National Association of Home Builders, said the then-proposed tariffs would “translate into higher costs for U.S. consumers and businesses.” American Institute of Architects CEO Robert Ivy offered a similar sentiment, concluding that “inflating the cost of materials will limit the range of options [that architects] can use while adhering to budgetary constraints for a building.”

However, these voices failed to persuade the Department of Commerce, which enacted the tariffs in May. In the months since, material costs have indeed increased significantly, according to data analysis from the Associated General Contractors of America. Over the same span, the White House has issued additional import duty increases, further weighing down building materials manufacturers, their clients, and American homebuyers.

While America’s global trade conflicts have cooled as of late, President Trump has reiterated his desire to move forward with similar trade policies, NBC News reported. Enterprises in the building materials space could encounter new challenges linked to tariffs in 2019. Again, businesses in the industry will likely have to engage in some operational reorganization to reduce the bottom-line impact of any new duties.

A hot housing market

American home builders have struggled to meet demand in recent years, forcing buyers to participate in intense bidding wars, but developers are working hard to increase inventories, according to research from the U.S. Census Bureau. Residential permits, starts, and completions rose in 2018, signaling the arrival of a building construction boom. This activity is expected to continue into 2019, during which time single-family housing starts are forecasted to increase, analysts for the NAR found. Building materials manufacturers may find themselves fielding higher order volumes, even as sourcing gets more complicated and supplies dwindle.

Together, these developments pose serious challenges to organizations navigating the building materials manufacturing arena and may necessitate the implementation of new shop-floor techniques and tools. Here at USC Consulting Group, we have been helping businesses of all kinds adjust to new marketplace conditions, implementing on-the-ground strategies that lay the groundwork for success.

Connect with USCCG today to learn more about our work and how we can help your company prepare for the challenging year ahead.

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