One of the most valuable benefits of attending so many conferences in-person again has been getting to talk with manufacturers about their experiences and priorities for the coming year. Our discussions spanned industries, technologies, and regions. But several common themes have emerged, particularly as management teams seek to take control of their operations by strengthening their workforce, processes, sustainability initiatives, and systems. Here are the top 2023 manufacturing trends that are being driven by these priorities.
- Grow investments in workers.
Manufacturers say that hiring and training workers is a top priority. Many of these companies face dual pressures to bring on employees with the technical skills required for smart manufacturing and to fill gaps in expertise as more baby boomers retire, taking with them decades of experience. In fact, the Manufacturing Institute projects that manufacturers will seek to fill “4 million high-skill, high-tech and high-paying jobs over the next decade.” As part of their workforce investments, we see manufacturers rely on human resource management (HRM) to handle employee training, as well as skill and job certifications.
- Improve labor productivity on the shop floor.
One of the significant trends shaping the manufacturing sector is improving shop floor productivity by assigning the best work teams to the products they have the most expertise in building. However, manufacturers cannot afford the delays that result from manually mapping workers’ skills to production needs. For this reason, manufacturers will increasingly rely on real-time data to assign the best possible production associates and teams to production lines and help them improve visibility and control across shop floors.
- Seek automation solutions that serve as “shock absorbers.”
Manufacturers now view solutions for automating their operations as shock absorbers that help navigate unexpected bumps in the road. On the shop floor, they’re relying on real-time monitoring, manufacturing execution system (MES), and enterprise resource planning (ERP) software to quickly add a third lights-out or near-lights-out production run as needed—taking on more business with current employees. In the back office, manufacturers are combining information from their ERP system’s inventory, supply chain management (SCM), and pricing modules to automatically adjust customer prices to materials costs, preserving margins. They can also offer deals that save customers money while maximizing production capacity and available inventory.
- Accelerate investments in smart machines.
We’ll continue to see manufacturing consolidation through mergers and acquisitions in 2023, and it is going to drive more demand for smart machines and robots on the shop floor. Prior to being acquired, we find that many smaller manufacturers hesitate to purchase newer machinery that will be with them for years to come. By contrast, the larger manufacturers and investment firms acquiring small-to-medium businesses have capital equipment budgets, and they’re used to placing bets on technology.
- Extend “as a service” options from software to machinery.
Half of all our new domestic ERP sales in 2022 have been cloud solutions, and many of those are software as a service (SaaS) offerings. That trend will only grow in 2023 because manufacturers understand they are not just buying the software; they are also buying access to the vendor’s experts to handle the deployment, reliability, scalability, security, and maintenance. Similarly, we’re beginning to see more companies provide smart machines or robotics as a service. For the manufacturers obtaining this equipment, the value in an as-a-service model is not just in moving the cost from a capital expenditure (CAPEX) to an operational expense (OPEX); it is about getting a technician who knows how to make that smart machine or robot work.
- Strengthen production and quality via greater visibility.
In 2023, more manufacturers will use real-time data to monitor the performance of their production equipment and identify areas where it can be improved. By continuously monitoring the performance and condition of equipment, it is possible to identify problems as they occur and take action to prevent failures or breakdowns. This reduces downtime, addresses issues before they affect product quality, and increases efficiency. Additionally, the data will provide greater visibility to predict, manage, and control production costs accurately.
- Improve sustainability and the use of recyclable, eco-friendly materials.
In a Fleishman-Hillard survey, 79% of consumers say that brands should focus on practices that protect the environment. And more manufacturers recognize the importance of achieving greater sustainability in 2023 to support customer demand. Some are creating products that are recyclable, compostable, or require little or no virgin materials. Others are relying on the combination of automation and real-time data to reduce waste by cutting scrap and improving shop floor efficiency to simultaneously support their lean manufacturing objectives and reduce their environmental impact.
As we move into 2023, manufacturers recognize that there is no single “magic bullet” to prepare for a rapidly changing landscape. Instead, by taking a holistic view of their businesses to continuously improve their workforce, processes, sustainability practices, and systems, these manufacturers are strengthening their ability to compete and succeed in the new year.