In 2021 we have seen more encouraging results compared to 2020. By 2022, growth is expected to be on an upward trend, especially in the manufacturing sector.
While 60% of manufacturers were affected in their operations by the pandemic, a recent survey of senior management in manufacturing and distribution companies showed significant to moderate growth in company revenues during the pandemic. Product demand is growing, demanding new and innovative production methods, and many manufacturers have taken this new challenge very seriously. By the end of this year, we will have a better understanding of how much manufacturing has changed in 2021.
Economic uncertainty aside, last year’s unprecedented supply chain disruptions were a great opportunity for manufacturers because of major advancements and optimizations in the area. These factors have led the often stagnant industry to move faster and more resiliently than ever before. If there was ever a year to drive the industry forward, 2021 was it.
In 2022, the manufacturing industry will see a fundamental shift in the way executives think about progressive change, from an unrealized vision to practical reality. The result will be a more mobile and flexible industry. Here are five ways we believe the industry will positively evolve in 2022: some in long-term adoption, others as a result of the COVID effect.
Transition to localized production
In 2022, the manufacturing sector will shift to the consumer-oriented farm-to-table trend that has taken hold in agriculture over the past decade, with a shift towards localized production. This will be driven primarily by the threat of ongoing trade conflicts/tariffs threatening global supply chains, which will prompt manufacturers to move production closer to the consumer. Going forward, manufacturers will want to build where they sell for a number of reasons, including faster time to market, lower working capital, political factors, and greater resilience. It will be a complicated and gradual journey. Naturally, the larger the manufacturer, the longer and more costly the change process will be.
Digital transformation of the workshop will accelerate
The pandemic reminded manufacturers of the fragility of using labor, access to physical space, and factories around the world to produce goods. Fortunately, advanced technologies-sensors, machine learning, computer vision, robotics, cloud computing, edge computing, and 5G network infrastructure have proven to increase supply chain resilience for the manufacturers that deploy them. While the product lines present a unique set of potential challenges, technology companies will continue to focus on bringing the value of these advances to vertical integration as manufacturing realizes it needs to diversify its manufacturing operations and leverage Industry 4.0 technology to become more resilient.
Manufacturers will respond to the high expectations of consumers
With an increased demand for products, manufacturers will be forced to produce high-quality products faster, more efficiently, and at a lower cost than ever before. In addition to purchasing behavior, we will also see a change in the relationship between manufacturers and their customers in the B2B segment. Overall, customer service has progressed significantly this year, with companies favoring personalized experiences, radical transparency, and responsiveness. Customers are accustomed to this type of service and will demand the same experience from their manufacturing partners. As a result of these changes, we will see more manufacturers move to HMLW (high-mix/low-volume) production. HMLV production involves receiving orders for a large number of different products that are required in small volumes from a customer.
We will see an increase in labor investment
Despite headlines in recent years that robots will take over the world, it is now clear that automation is not only replacing existing jobs, but creating new ones. This is a major conclusion of a recent MIT report, Work of the Future: Creating Better Jobs in the Age of Intelligent Machines. As manufacturing moves closer to the consumer and advanced technology becomes the backbone of the manufacturing floor, we will see manufacturers take more responsibility for this shift, creating better-paying jobs for factory workers. This will be a high priority for industry, especially as our state’s development course focuses on economic recovery and job creation.
Sustainability will be a selling point, not a side issue
Manufacturing has long been one of the most important sources of environmental pollution. A global trend in environmental protection, efforts to improve sustainability through more efficient factories and plants will focus on creating greener jobs and reducing large amounts of waste in the industry. A distributed network of small, local, energy-efficient factories can reduce energy consumption by shortening transportation routes to customers, eliminating our dependence on human operators, reducing the waste of fewer defective parts, and decreasing the industry’s overall carbon footprint.
Ultimately, manufacturing is a constantly evolving industry, although historically the sector’s progress has been slow but steady. With best practices in business, we will begin to see evolution and improvements in the industry, with a more responsive and adaptive mindset to markets as well as consumers. The agility of this new industrial stage will be the pillar for factories to drive their growth.
Although in recent months we are witnessing problems in global supply chains, much of the industrial sector is beginning to recover and live a new reality, largely initiated by the countries that are advancing in the implementation of the vaccine against COVID, the advance of e-commerce is increasing consumption and therefore the demand for products. It is expected that in 2022 there will be better control of supply chains and a strong recovery for the industry, lowering the great volatility of this time and we get an optimistic industry.