Manufacturing 4.0 Growing Pains: It’s Different Now
Manufacturing growth in the US is in the planning stages or is already here… 88% of manufacturers see steady or increasing revenue in their future. Advanced manufacturing technologies are driving the emergence of a re-shoring trend. Manufacturing is back!
With the plan for growth come the inevitable growing pains as challenges to the status quo are becoming evident with the uptick in demand for production.
The areas of concern fall into three key categories, according to the 2017 Purchasing and Manufacturing survey.
- HR/People – shrinking resources, production, engineering
- Supply chain – Higher commodity costs, higher maintenance costs
- Technology – deployment of Robotics, Automation, Cyber security, digital disruption
68% of manufacturers see increasing revenue while only 12 % are looking for a decline over the next 12 months.
The huge challenge manufactures are experiencing is an increasing customer demand coupled with a decline in the currently available experienced workforce. 65% of manufacturers plan to hire additional human resources. The challenge is finding capable employees in the shrinking pool of human resources available to meet the increasing demand.
For the last 4 years, a lack of qualified workers is cited as the most significant barrier to meeting revenue growth targets. To meet this ongoing challenge, manufacturing executives are turning to automation technology and robotics to reduce the workforce constraints. In addition, manufacturers are outsourcing elements of the business whenever possible. From outsourced recruiting and engineering services to contract manufacturing, companies are finding creative ways to do more with their existing workforce.
Along with the HR issues we’ve noted, manufacturers have to improve their global competitive positioning by improving their procurement process and supply chain. Time constraints are an increasing challenge with 40% of procurement professionals struggling to keep up with an increasing complex supply chain. 13% are struggling with a shortage in talent, with technical knowledge noted as a key missing skill set.
Two emerging trends to deal with the supply chain challenge are supplier consolidation and using technology to reduce costs. 68% of procurement teams are planning on identifying and qualifying new sources in their efforts to improve their supply chain management. Ask today’s procurement professions what “good looks like” in the future of supply chain? The answer… suppliers with strong technical capabilities combined with a broad product and service portfolio will be the winners in the re-engineering of the supply chain for Manufacturing 4.0.
Technology is a conundrum for many of today’s business leaders. It is clearly critical to the future of manufacturing, from advanced automation/robotics to additive manufacturing, the race is on to reduce costs and increase productivity. The challenge is not what to deploy but how much and how to strategically prioritize technology investments to maximize the Return on Investment. Manufacturing executives are challenged to understand the various technologies available and the difficulty in predicting whether the return on investment promised will be truly realized when fully deployed.
54% of manufacturers believe they currently cannot take advantage of the technology available due to a lack of internal engineering resources. This engineering constraint affects not only productivity gains but future Research and Development projects. Deploying advanced manufacturing technology solutions from factory automation to collaborative, or autonomous mobile robots, require both dedicated engineering project managers and a savvy production and maintenance team. The difficulty is finding and retaining the in-demand engineering talent within a highly competitive global market.
To meet the challenge of appropriate engineering capacity, manufacturers are turning to single source technical service providers who bundle the advanced manufacturing service technologies with project management to offer a cost effective alternative to investing in internal engineering resources. This “on-demand” approach allows a company to deploy state of the art technologies with a limited engineering budget.
Growth always creates challenges, but no one ever said it was going to be easy. The success factor continues to be identifying and capitalizing on your individual company core competencies while selecting trusted partners to supply on-demand customized expertise in areas as diverse as human resources, technical/engineering to manufacturing services to additional support for your growth strategy.
RG Group helps customers create a global competitive advantage with innovative motion control technology and supply chain solutions.
Info Source: 2017 Prime Advantage Survey