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Four Predictions For The Manufacturing Industry In 2023

Four Predictions For The Manufacturing Industry In 2023

Four Predictions For The Manufacturing Industry In 2023

For manufacturers, the last two and a half years may have felt like going to a party you never wanted to attend. You rubbed elbows with a pandemic, took an overly firm handshake from supply chain disruption and downed endless shots of uncertainty. So, there’s good reason to feel slightly hungover as we step outside, Gatorade in hand, to the cool air of 2023. What’s a fuzzy brained industry to do? With any hope, we’ll take stock of our businesses and reconnect to our core values. If 2021 and 2022 were largely defined by chaos, 2023 is the year we settle in and get back to basics. It’s not as if we lost our wallet in the melee. In 2022, manufacturing accounted for $2.77 trillion in gross domestic product. That’s enough to buy every person in the U.S. a Rolex watch or fill every gas tank—245 times. But here’s a more practical option: manufacturers should reinvest their profits and set themselves up for greater returns after the expected recession. As we wait to see just how deep the economic slow-down will go, here are four predictions for the coming year. 1. Reshoring will ratchet up, but its impact will remain nebulous—for now . Consumers are frustrated by months-long wait times on everything from furniture to iPhones. They rightfully see foreign supply chains tangled by regulation and uncertainty as the culprit. That has created an opportunity for U.S. companies not only to bring some operations back home, but also to outwardly market those moves as a key selling point. In other words: “Made in America” might just take on even greater importance in 2023. And keep in mind that plenty of geopolitical uncertainty still remains. Tensions boiling over in China, for instance, could be the spark that ignites American manufacturing unlike anything we’ve seen in the last 40 years. That said, it’s unlikely such moves will result in shorter wait times right away. Reshoring is a long-term play toward supply chain resilience and smoother operations, but in the meantime, we’re likely to remain beholden to the ups and downs of foreign partners. 2. If a recession occurs, it will come with silver linings . Coming off a period of incredibly high demand for manufacturers, the timing could be much worse. Here’s how a light recession could actually help: · Clearing the backlog . A recessionary period would create less demand and allow manufacturers across the globe to clear their backlogs, allowing the supply chain to catch-up. · Investing in technology . Manufacturing companies that don’t invest in their technology will be washed away in five to ten years. But it’s hard to find time to install new tech when you’re focused on the day-to-day and constantly putting out fires. With recession comes more space to research and act. · Rebalancing talent . The talent shortage was already prominent in manufacturing before the pandemic turned the employer-employee relationship on its side, further straining manufacturers who are now desperately short workers. A recession would likely bring more folks to the industry. 3. The gap between the technology haves and have-nots will widen . Many manufacturers have had a full slate of work over the last half-decade or more, so gaining an edge over the competition has been less of a concern. In 2023, that will likely change. Here’s an idea: try starting small instead of talking big. Large manufacturers love touting the impact of massive technology overhauls. And there’s no doubt that for shops that have the capital, those large-scale investments will boost the bottom line over time. But they can also create a false impression that improving tech is only possible by spending enormous cash. Instead, set a modest goal—say, reducing your downtime by 5% or 10%—and see how you can make incremental changes to get there. Beginning your journey with something small, like installing sensors on your production line, can prove investments are worthwhile and end up snowballing into larger, transformative projects. 4. We’ll find out which companies were faking it . The last three years, external forces have made it absolutely vital that manufacturers put more thought and money into work culture. There’s been a much-needed reckoning on how we show our teams we care and create loyalty over time. But the talent scales could re-balance in 2023, and we’re going to find out which companies genuinely re-imagined the way they care for their employees for the long haul—and which ones were playing the game to keep folks around […]

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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