Manufacturing Industry Challenges for 2020
With 2019 coming to a close, it’s time to consider the year ahead and the manufacturing industry challenges you’ll likely encounter. There are plenty of economical stumbling blocks to consider as tariff policies change with the wind under the current administration’s frenetic changing plans. And there is always the imposing issue of finding the necessary labor to fill critical jobs. Deloitte recently addressed these issues as well as a handful of IT-related manufacturing industry challenges we’ll see in in 2020.
For one thing, Industry 4.0 is taking hold of the manufacturing sector, and manufacturers will be forced to address the issues associated with that even more fervently in 2020. Early successes have increased many companies’ appetites for more digital exploration and investment. However, the current labor and trade uncertainties within the global manufacturing industry could stall digital progress. Therefore, in recent months, many companies have shifted their efforts toward digital projects that build agility and scalability to help them manage risk.
Applying artificial intelligence, cloud computing, advanced analytics, robotics and additive manufacturing to the value chain can increase visibility and transparency, allowing manufacturers to make faster changes to operations and respond to market-based threats or opportunities. Manufacturers will continue to seek out the bright spots in the global landscape, including emerging markets, and their ability to flex production, delivery and customer support will continue to be important.
Shifts in sourcing are already playing out on the global marketplace. In a matter of months, manufacturers have shifted both sourcing and production to different geographies, seeking tariff-friendly combinations. For manufacturers, this must be executed precisely given lead times for original equipment and their highly profitable aftermarket components. These points should continue for 2020, as they support manufacturers’ efforts to build digital into the core of their supply networks and improve risk management in uncertain conditions.
Manufacturers also are realizing they can’t complete the digital transformation without some help. Many manufacturers are mobilizing partnership within their ecosystem that can drive targeted business goals, ranging from bolstering a traditional area to adding new capabilities. According to the Deloitte report, a group of digital front runner manufacturers were executing in these areas at a much higher rate than their peers. For example, these front runners pursue partnerships to create new business models at five times the rate of others and to create new value for customers at twice the rate of others.
This has revealed itself to be true with smart factories, as well. Leaders in smart factory initiatives are partnering across their ecosystems at a significantly across their ecosystems at a significantly greater pace than their peers, including with suppliers, channels and customers, to drive higher productivity and output.
Also, forward-leaning manufacturers are expected to continue to seek expansion of their ecosystems to source the capabilities required to satisfy their strategic vision. Many of these capabilities include digital technologies applied to existing manufacturing processes or ones that create customer stickiness. Per Deloitte’s analysis, approximately one in four deals in the manufacturing space can be linked to companies with digital value propositions, and the appetite for these capabilities is likely to continue in the coming months.
The best first step for incorporating useful technologies to help your organization grow profitably is to work with a business consulting firm that has expertise in manufacturing. We can help you make inroads faster by giving you insight in selecting the most practical, cost-effective technologies and equipment, oversee implementation, train your team, and help you get the greatest ROI. Give us a call today to get ahead of the technology curve. 2W Tech is a full-service IT Consulting firm that specializes in solutions for the manufacturing industry. Give us a call today to get started.