4 Things to Know About Manufacturing in 2023
Manufacturing companies in the U.S. and around the world are planning for what could be a tumultuous 2023, but sometimes, in chaotic economic conditions, there are opportunities if you know where to look.
Maybe you’re a manufacturer, and you’re trying to plan for equipment investments, like a slitter rewinder machine, or you’re thinking about how the labour market might look in the upcoming year.
Below are some of the things to know, broadly, about what could affect manufacturing in 2023.
There are a lot of risks that could impact manufacturing in 2023, and one way that you can protect yourself or insulate yourself somewhat from these risks if you’re in the industry is through the use of technology.
Advanced technology investments can help you become more resilient and mitigate the myriad of risks you might be facing down.
Manufacturers have largely increased digital investments over the past few years and have accelerated their adoption of emerging technologies. The companies that had already been in the midst of those investments tended to fare better during the pandemic than the ones that hadn’t.
With investments in technology like automation and robotics, you can potentially improve your efficiency, while AI and machine learning can give you a competitive edge.
2. You May Be Dealing with Voluntary Exits from Your Employees
We’re in a bit of a strange time economically right now. Inflation is high, and a recession seems to be right around the corner, if not already happening. At the same time, the labour market is strong, and employees have a lot of opportunities available to them.
Job openings in the manufacturing industry are especially high, and pay increases to deal with the talent shortage may not be enough.
Manufacturers will have to rely on other approaches to the labour issue, such as upskilling and reskilling current employees.
Having a diversity, equity, and inclusion strategy can help you attract talent who might not otherwise be drawn to the manufacturing industry.
You’re also likely going to have to redesign how your employees work to offer more flexibility in work arrangements to keep up with the evolution of work culture.
3. Supply Chain Problems
Around 80% of recently surveyed executives in manufacturing say they’ve felt a heavy impact from supply chain disruption over the past 12 to 18 months.
Many surveyed executives say they believe that disruptions to supply chains might be the biggest area of uncertainty in manufacturing in the coming year. Manufacturers are strategising to mitigate related supply chain risks by using more digital technology but also going back to some of the more traditional ways to do things.
For example, you could focus your efforts on building redundancy in your supply chain and put your sights on relationship management. You might also want to boost your local capacity so that you’re less exposed to transportation bottlenecks and logistical problems.
Supply chain issues, as they currently exist, could continue for more than another year, lasting well into 2023.
In a survey of manufacturers specifically related to supply chains, 73% of responding companies said they don’t believe their current supply chains are fully protected, and 12% said they believe their supply chains lack resilience.
4. Corporate Social Responsibility
The ESG landscape is going to be something manufacturers have to watch closely in 2023. A lot of organisations are voluntarily compliant with various disclosure frameworks, ratings, and regulations for reporting, but on a global scale, there’s a move toward more disclosure for metrics that aren’t financial in nature.
Particular implications for manufacturers could include managing waste, with almost ¼ of recently surveyed manufacturing executives saying they needed better capabilities for waste management. They also said that the use of technology could provide opportunities for improvements in product recycling for more sustainability in manufacturing operations.
Another effort that manufacturers say they’re looking at is increasing supplier diversity and the elevation of technology-enabled smart buildings that provide help with the achievement of carbon neutrality.
With regard to energy transformation, which can help operations become more sustainable, fleet electrification is one way to start.
The Department of Energy has programs that are available to strengthen battery supply chains, helping with fleet electrification.
Finally, as energy prices are so high right now, some manufacturers with current investments in the internet of things might repurpose those investments to help them keep their energy use under control.
For example, these existing investments might include IoT sensors and analytics, which can be used to measure energy use and optimise power bills.