Top Trends in Manufacturing: A Strategic View Reveals Bigger Challenge than Realised
Industry 4.0 is not only accelerating the demand for transformation in every aspect of supply chain and customer expectation. The new disruptor technologies are also piling up pressure on manufacturers to further increase productivity and cut costs. But manufacturing organisations may be facing a bigger challenge than they realise. Taking a high level strategic view reveals the context in which change is taking place, and the five top trends seen as exerting the biggest impact upon many manufacturing industry sectors.
Global Uncertainty as a continuing backdrop influencing how business operates
Firstly, looking at the bigger picture inevitably sees ‘Global Uncertainty’ as a continuing backdrop influencing how business operates in response to the lack of a clear picture of trading conditions in the longer term. Political upheaval both in the U.S. and in Europe have created unprecedented levels of uncertainty for those industry leaders already wary of investing in change at this time to better compete in the emerging Industry 4.0 environment. Major trade deal prospects between the U.S and the 12 Pacific rim countries are still unclear at this present time, and attempts to negotiate a similar transatlantic deal and investment partnership with Europe are currently stalled despite efforts to get them restarted. What is not in doubt, however, is that the freedom to trade will continue to affect manufacturing companies over the next decade at least.
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High up on any list of issues driving current uncertainty in future overseas trade for UK manufacturers is, of course, the result of the Brexit vote. Traditional trade relationships between many European countries have been thrown into disarray. Not least, in the many cases where it’s not so straightforward to unpick the often complex arrangements woven into more than four decades of commercial transaction. While large manufacturing companies may be able to negotiate their way through the minefield of future trade agreements, small to medium sized manufacturers will need to be vigilant and, importantly flexible, if they wish to maintain a broad and open access to key export markets around the world. It could take far beyond 31 December 2020 - the end of the UK transitional period to leave the EU, for issues to be resolved.
Skills Shortages - automation is the future, and it’s not slowing down
One of the biggest debates with the look of a long term trend stamped into its forecasting template, is Jobs and Automation. Framing the debate is the awareness that automation not only played a major role in eliminating jobs in the past but also in defining the jobs and skills that will be needed in the future. Automation is the future, and it’s not slowing down. The adoption of advanced automation and information technologies is forecast to continue causing both further low-skilled job losses and fewer mid-level positions. In 2016, employee attrition was 13.6 per cent, up by 7.2 per cent. While the national conversation grows more vocal over how far industries should automate to supply employment needs, those who view the emerging digital global economy as a tailwind will be pitted against those who perceive it to be a headwind.
The push towards Industry 4.0 is increasingly highlighting a crucial trend to be addressed - Skills Shortages. Despite of the lower than expected employment levels, which are always viewed as a reduction in taxes on businesses, it is expected that there will be an increased need and expansion in manufacturing workers, engineers and managers. Those manufacturers which have already created a next-generation workforce strategy and supply chain will prosper, but far too many other organisations will struggle to attract the human capital needed to take advantage of the new opportunities.
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The Digital ‘Coal’ Train driving changes in Industry Leadership
Industry 4.0 may be best described as a Digital ‘Coal’ Train. Increasingly, manufacturers are embarking on the next wave of industrial progress built on digital technologies, which can be liked to a coal train, the iconic workhorse of Britain’s manufacturing past. Updating as a new vision on track to drive Industry 4.0, the ‘digital coal train’ will travel slowly. At times the idea will come to a halt as companies realise that Industry 4.0 is less about a technological challenge and much more about cultural and leadership transformation. This crucial insight will require deep changes in leadership orientation and practices to deal with a complex, multi-layer transition.
Industry Leadership is at the heart of many of the debates now trending within the manufacturing sector. The increasing call for manufacturing leaders to broaden their horizon is bringing the pressure needed to make tough decisions over aligning vision, strategy and implementation. New workflows can be built linking previously isolated functions such as, the supply chain, new product development or simply the manufacturing process by itself. Leaders will be forced to gain a deeper understanding of how all the functions work and be better equipped to know how to take advantage of new opportunities for cross-functional collaboration. The opportunities will produce the desired results of greater customer value and customer retention. The ultimate challenge will be whether leaders are personally ready for the enormous task of transformation they need to implement as the trend continues to shift the gears towards the future of manufacturing.
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