As we step into 2024, manufacturers' pressure to stay on top of current trends and maintain competitiveness are at an all-time high. Throughout 2024, we believe that companies will continue to be expected to do more with less. This has never been truer as macroeconomic factors continue to create pressure across industries as broad as food manufacturing, machining and metals processing, and consumer goods manufacturing.
In this article, we look at the macroeconomic trends projected for 2024, how they affect manufacturing companies, and what can be done in response.
Availability of Skilled Workers
Recruiting and retaining skilled and motivated workers has beenan ongoing challenge for several years now. From our recent article Labor Shortages in Manufacturing - How ProductionMonitoring Can Help, “Labor and skills shortages among manufacturers and exporters have cost the economy nearly $13 billion.” A compounding factor in the US is new drug legalization regulations that are creating issues inscreening potentially good employees, while managing workers to they are safe and productive.
High turnover rates mean that manufacturing companies have to constantly back fill in with new labor, creating demands on training as well as increasing wage pressure.
This problem will soon transform into a different beast. Sixty-five percent of manufacturing workers stated they are open to other job opportunities and are actively looking for new jobs. The industry also has an aging workforce with a median age of 44.3 and is beginning to lose its most knowledgeable workers leading to Brain Drain. As technology becomes increasingly prevalent in manufacturing, the average manufacturing employee is expected to possess a more specialized skill set than their predecessors, making the skilled employee shortage even more dire.
Lack of availability of skilled workers continuesto be one of the number one manufacturing trends that will create challenges throughout 2024. That’s why it’s essential for companies to get the most productivity out of every labor hour possible.
Sustainable Manufacturing
Manufacturers worldwide are increasingly being pushed to adopt sustainable and ethical business practices. Consumers are increasingly aware and educated about global supply chains and widely publicized boycotts that spread at the speed of social media can cause companies to be suddenly in a bind and under pressure to clarify their manufacturing models (not all that is shared is true) and to be able to justify their manufacturing practices.
Incorporating these practices can reap benefits financially and environmentally. With Net-Zero laws becoming more common, company leaders are stepping up to be part of this global move towards sustainability, securing their success in the long run.
Defining Sustainable Manufacturing (EPA)
Sustainable manufacturing minimizes negative environmental impacts while conserving energy and natural resources. Sustainable manufacturing also enhances employee, community, and product safety.
Why choose sustainability?
- Increase operational efficiency by reducing costs and waste
- Respond to or reach new customers and increase competitive advantage
- Protect and strengthen brand and reputation and build public trust
- Build long-term business viability and success
- Respond to regulatory constraints and opportunities
Pressure on manufacturers connected to sustainability is the rate of inflation and the knock-on effect on input material costs. To remain competitive, especially in manufacturing industries with thin margins, companies will need to continue to focus on the minimization of waste and maximization of yield. Minimizing input materialwaste, minimizing energy consumption, and maximizing yield not only contribute to sustainability, but they also make good business sense.
Predictive Maintenance
Predictive maintenance is a proactive, data-driven method utilizing connected sensors to constantly monitor, transmit, and analyze operational data on critical process machinery. This approach generates service alerts notifying mechanics to repair machinery before failure, minimizing unplanned downtime. Early detection empowers companies to reduce cost, minimize waste, cut downtime, and lessen the overall need for mechanics onsite.
With the pressure to maximize labor productivity, having trained, expensive, and hard-to-obtain workers standing around while machines have unplanned outages will be increasingly unacceptable.
Interest Rates
Lending Rates significantly rose in 2023 leaving manufacturers with a hardship when looking for new equipment. The bar for replacing aging machines becomes higher with higher interest rates, meaning that many manufacturers will have to ‘make do’ with suboptimal equipment until rates come down enough to allow the ROI calculations to line up with new investments.
Forecasts indicate that interest rates are to remain relatively high throughout 2024.
Insight: As lending rates increased production decreased.
Strategic Tech in Manufacturing
When manufacturers are expected to do more with less, the challenge is to innovate. Each of the trends above can be addressed by implementing relatively low-cost, high-ROI Industry 4.0 technologies.
These technologies can close the gap between what is possible vs the day-to-day operational reality of manufacturing companies. Industry 4.0 implementations can improve labor productivity, make the most of scarce labor resources, reduce waste, increase yield, and maximize the productivity and reliability of older equipment. With Industry 4.0 technology like Worximity’ real-time production monitoring and oee software, companies can successfully combat the larger manufacturing trends in 2024.
Perhaps more importantly, these technologies are no longer only accessible to large, enterprise-scale manufacturers. Worximity makes achieving these gains possible for smaller and mid-market manufacturers.
Conclusion
In recent years, proactive manufacturing companies have evolved and adapted to challenges like the COVID-19 pandemic, consumer perceptions, and geopolitical tensions. Add to this an ongoing skilled labor shortage, rising input costs, and higher interest rates, and 2024 looks to be no easier than many years past.
In this modern competitive space, digital tools like automated vision inspection and counting systems, data visibility, and cloud-based remote monitoring systems, form the foundation for optimizing production lines and bolstering business resilience. They support the push towards sustainable solutions and empower a new workforce, equipped with skills complemented and elevated by automation.
These prevailing trends today will define the near-future landscape of the manufacturing industry. To prepare, look at what’s possible for even smaller-scale manufacturing companies to implement Industry 4.0 technologies and improve their competitiveness.
Intrigued? A great place to start is ourguide to becoming a Smart Factory using IIoT.
