Despite A Year of Disruption Optimism Prevails
What a year it was in 2020 for manufacturers. Deemed essential during the early stages of the pandemic, some closed, some struggled to remain open, some pivoted part of their operation to meet Personal Protective Equipment (PPE) demand, and most continued to carry on their business as best they could.
Manufacturers restructured their facilities to create a protected, socially-distanced work environment for their employees to ensure their health and safety and that of their families.
Disruptions in the supply chain impacted customer order fulfillment while some customers were forced to cancel or scale back orders due to their own business challenges they were facing.
The manufacturing constraints and complexities created by the pandemic tested its employees, its processes and its technologies like never before. Strained supply chains required agility in supply chain management. New automation and technology was needed to address both workforce limitations and new product development in order to compete more effectively or to expand business.
Despite their best efforts, U.S. industrial production and factory orders declined and remain below 2019 levels, according to a post-election study of more than 350 industry executives by consulting firm Deloitte. Manufacturing employment levels, which experienced a drop in numbers during the early days of the pandemic due to forced shutdowns and suppressed orders, have bounced back but are still over half a million lower than early in 2020.
While there may be a sense of uncertainty among some manufacturers, in the Deloitte study roughly two-thirds of industry executives conveyed a positive outlook on business for 2021. Taking a look at consulting firm reports and industry publications, some key trends are emerging that are expected to support and bolster this atmosphere of optimism in the new year.
It May Take Longer
While a majority of industry leaders may be positively looking ahead, the recovery will likely take longer to reach pre-pandemic levels. As the year progresses, and confidence in the economy grows, manufacturers should regain the momentum they were experiencing prior to the pandemic.
Chad Moutray, Chief Economist at the National Association of Manufacturers, predicts a return to pre-Covid levels by the second half of 2021. He sees a weak economy and sluggish product sales being primary challenges as well as attracting and retaining a quality workforce.
Moutray also noted that the economic indicator Core Capital Goods New Orders and Shipments is rebounding which is a sign that manufacturers are reinvesting in their business. And while manufacturing employment is down by a half a million compared to pre-pandemic levels, job openings remain high with the continued difficulty of finding qualified, skilled talent.
Research and Advisory firm Gartner sees 2021 as an opportunity for businesses to reset their strategies and build resilience suggesting they “use those lessons from the Covid crisis to reconfigure your business and operating models for a new reality.”
The pandemic changed the way many businesses operate. According to Gartner, “Some changes were forced on us; others represent the height of innovation in a crisis. There’s been a reset of the workforce and work itself, a reset of the employer/employee relationship and a reset of the business ecosystem. For many, the business impact of the pandemic has been negative; for others, positive.”
Digital initiatives are a common theme being bantered about in manufacturing circles. They’re not so much a new trend as they are an evolving one, with automation and technology increasingly being introduced and utilized at manufacturers of all sizes.
The Chief Product Officer of Fetch Robotics, Stefan Nusser, was a panelist at an IndustryWeek event where he advised “the pandemic has helped to accelerate the rise of a new type of automation – flexible, collaborative, and cloud-based – that can better support changing operations and more intricate workflows.”
An example of this new wave of automation is autonomous mobile robots (AMR). AMRs can be deployed remotely, be easily adjusted to fit changing facility needs and workflows, and they operate safely right alongside your production workforce.
The factory floor is predicted to have an increasing digital transformation in 2021 according Amar Hanspal, CEO of software and robotics company, Bright Machines, in his Dec. 7, 2020 article for Forbes magazine, “Five Predictions for the Manufacturing Industry in 2021.”
Hanspal stated, “advanced technology including sensors, machine learning, computer vision, robotics, cloud computing, edge computing and 5G network infrastructure has proven to increase supply chain resiliency for manufacturers who adopt it. Companies realize they must diversify their plant operations and embrace Industry 4.0 technology to become more resilient.”
Additive Manufacturing Adoption
Digitization is accelerating in every area as companies are investing in technologies that can help them adapt to filling supply gaps, conduct remote work and provide local solutions.
As part of this adoption, choices will need to be made, and many will choose based on risk, cost and quick return on investment (ROI). Additive Manufacturing (AM) is one of those digital technologies that can deliver short-term ROI, low-cost manufacturing, and low risk.
The AM industry is being embraced more amidst the global pandemic with 3D printing enabling digital supply chains and establishing itself as a viable technology for on-demand manufacturing.
The COVID-19 crisis showed that AM can step up and provide meaningful solutions to emerging challenges. Its value lies in being able to create things not easily replicable through other manufacturing methods. AM’s ability to customize, to print with fewer components and with less waste, means that it can ensure solutions that are flexible and that operate with sustainability at their core.
More than anything that came before, global crises are incentivizing industries to fast-track their technological innovation, and this climate of radical reinvention represents an opportunity for AM to really become instrumental in the areas of design and manufacturing.
Business planning and forecasting will require refocusing efforts that achieve goals which may have been delayed, reduced or cancelled in 2020 and are still relevant and desirable in 2021. Applying lessons learned from the past year and implementing new processes and procedures which have sustained companies or helped pivot to new business opportunities should be part of planning.
The unprecedented supply chain disruptions during the past year may have been a blessing in disguise for manufacturers, encouraging them to become agile and resilient. If new and innovative production methods were introduced to a facility, continuing and sustaining their use should be part of the planning exercise.
Developing and articulating a strategy that includes key initiatives, established priorities, and specific goals will guide an organization’s progress throughout the year and help maintain its focus. Everyone from the CEO to individual contributors of the workforce should understand their roles and how they will drive the expected outcomes.
Summing It All Up
Finding and retaining qualified, skilled workers will continue to challenge manufacturers in the new year. Automation and technology applications can lessen the severity of the talent crunch. To operate advanced technology may require retraining and additional education for the workforce. Capturing tribal knowledge of retiring workers should also be a priority as more baby boomers leave their manufacturing careers behind.
While many businesses have recovered from the initial shock of the pandemic, there is still a sense of uncertainty. Which is why proper planning, adopting new technologies, expanding supply chains, protecting current client base, and ensuring a safe work environment will help to sustain business and position it for growth.
It goes without saying that 2020 has been an interesting and challenging year, testing the resolve of businesses, people and processes. Technological and automation implementations took a leap forward and will continue on that trajectory in the coming years, reshaping the manufacturing industry in myriad ways.
The year 2021 may take a little while to reach its full potential, but with manufacturers refocusing and reprioritizing their planning efforts for the future, the result should be a more flexible, resilient and sustainable manufacturing community.
[Blog] Four Key Stages Business Leaders Must Overcome to Change Results
When you're a business owner facing roadblocks that prevent your business from getting to the next level, look to these fixes to get yourself moving in the right direction.
[Case Study] Strategic Roadmap Brings Synergy to Growth and Operations
A laser-focused effort would be needed, employing management tools and metrics to provide clear direction for achieving the obvious results and more notably, operating under the intent of the new standard, and reaching growth and operational goals.
Achieve Your Business Development Goals
Our consultants utilize an extensive stable of Business Growth Services to help companies realize their goals to grow their businesses.