Manufacturers headed into 2023 with the looming threat of a recession, a wave of retiring employees, and a constantly moving target of cybersecurity threats that have many in a posture to anticipate, prepare, and respond to what comes next. So, what exactly does the rest of 2023 hold?
A recent survey by Deloitte, the 2023 Manufacturing Industry Outlook, sought to understand the perspectives of organizational leaders across several manufacturing segments, including: industrial and commercial equipment and machinery; electrical equipment, appliance, and component manufacturing; construction products and equipment; aerospace and defense; automotive and transportation equipment; food and beverage; and consumer and electronic products.
Among the findings, the survey revealed that U.S. manufacturing demonstrated resiliency during 2022, thanks in part to policy initiatives such as the Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS Act) and the Inflation Reduction Act (IRA). Looking ahead, the survey points to an anticipated 2.5 percent growth in manufacturing-related GDP through 2023.
However, while overall demand and production capacity are strong, the near-term outlook shows some speed bumps. These are due to concerns about inflation and the economy, as well as staffing shortages and other factors. Instead of taking a “boil the ocean” approach, manufacturers are advised to focus on mission-critical priorities, including:
Technology — Investing in advanced technology to mitigate risk, protect-long term profitability, and broaden advanced manufacturing capabilities.
Talent — Implementation of a wide range of talent management strategies to source new hires, shore up voluntary exits, and employ ongoing training to upskill the workforce.
Supply Chain — Mitigation strategies to achieve supply chain assurance and boost local capacity to reduce logistics issues.
Smart Factory — Holistic approach to smart factories to unlock new possibilities, including the investment of artificial intelligence, augmented reality, and advanced analytics.
Sustainability — Focus on corporate social responsibility (CSR) and compliance with reporting regulations and disclosure frameworks.
While they used to be viewed as a nice to have rather than an imperative, CSR efforts include the fast-moving environmental, social, and governance (ESG) landscape that needs a seat at the strategic planning table.
Contained within CSR are priorities such as waste management, increasing supplier diversity, elevating smart building technology to achieve carbon neutrality, and fleet electrification.
When it comes to managing waste, for example, nearly 25 percent of surveyed manufacturing executives in the Deloitte study agreed that using technology to improve product and material recycling would make their manufacturing operations more sustainable. This is critical for manufacturers working toward net-zero factory goals.
According to a 2022 U.S. Bureau of Labor Statistics survey, women account for less than one-third of the total manufacturing workforce, and the proportion of people of color is even lower. Many manufacturers are investing resources to provide equitable access to career opportunities, addressing the workforce gap, and engaging a broader talent pool.
The SME Education Foundation, the philanthropic arm of SME, is working to increase opportunities for women and minorities. In the past two years, a record number of scholarships were awarded to underrepresented students. By completing just one application, students can apply for all scholarships for which they are eligible.
The January/February 2023 issue of Manufacturing Engineering debuted a recurring feature, “Inclusive Insights,” which will publish every other month and highlight industry trailblazers making DEI an integral part of manufacturing’s culture.
Stay tuned for additional coverage in the months ahead that shines a spotlight on manufacturing leaders who create inclusive and equitable environments, empowering individuals to take risks, be accountable, and reward those promoting equity across all levels of the ecosystem.
It’s clear that investments in technology and people are equally important for manufacturing to retain its resiliency in the year ahead, as well as prepare for a new set of challenges and opportunities in 2024.
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