One thing that we learned from the onset of the COVID-19 pandemic is to expect the unexpected. MRO organizations that survived the chaos of last year came out with newer processes, procedures, and practices. When we talk about 2021, agility has become crucial to businesses. According to studies from McKinsey, the challenge of reskilling will be quite acute in operation-centric sectors like manufacturing, transportation, and retail. Workforce technology, industrial reshoring, and preparing for Industry 5.0 will become manufacturing hallmarks in 2021.
Digital transformation in the manufacturing industry focuses on changing the factory floor. Manufacturers need to ensure they keep the needs of their workforce before everything to be competitive and retain talent. The only way forward is to accommodate the requirements in an agile manner through technology and training.
In this blog, we cover the most crucial challenges the Manufacturing Industry faces at the moment and the way forward.
Top Challenges for the Manufacturing Industry
1. Labor Shortages
The increasing growth in online shopping has led to a high demand to staff new warehouses or add a couple of trucks to the existing fleet. Moreover, it also leads to a heavy demand for last-mile driver positions. And clearly, there are no people to serve these needs. The pandemic leads to shortages in the entire chain. Manufacturing organizations need to step up their offerings to attract and retain their talents.
2. Data Integration
The key measures to ensure smooth integration in supply chain and data integration are IoT sensors, RFID for inventory tracking, and a robust I.T. infrastructure for massive data management. Advanced analytics powered by A.I. will serve as the next phase, passing through the data generating demand forecasts. Deploying Industry 4.0 technology solutions in your manufacturing organizations will also enable a smoother integration into the supply chain.
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3. Direct- to Consumer Marketing
The expansion of E-Commerce has made it imperative for manufacturers to ditch their traditional distribution networks. Network design, packaging, and shipping logistics need to shift focus from a distributed network model to a Direct-to-consumer marketing (D2C) model. The concerns here are primarily operational. The existing production facility must be built around a distributed model; the warehouse and loading dock are optimized for palletized shipments all at once.
4. Additive Manufacturing
Closely related to D2C manufacturing, additive manufacturing comes with its own set of potential challenges. The ability to create custom orders based on specifications provided by the consumer is still a relatively new feature in the manufacturing world. The rapid development of 3D printing capabilities alongside other products in emerging technology such as A.I. and machine learning have combined to allow nearly instantaneous, fully customized production- enhancing adoption of Industry 4.0 technologies and the changing demands of an ever-shifting consumer demographic, for starters.
What should Manufacturers focus on in 2021?
In 2021, manufacturing is likely to see a fundamental shift in how the leaders view progressive change – from traditional vision to practical reality. Here are five ways the industry will evolve- some long in the making, others resulting from the 2020 effect:
1. Workforce Training Programs
Industry 4.0 technologies can revolutionize the factory floor – but the workforce must continue to transform along with production. The race to adopt these technologies has accelerated exponentially during the pandemic. Workers need to upgrade their skills, especially automation processes, repair systems, artificial intelligence, robotics, additive manufacturing, and more. Related to Manufacturers investing in digital transformation need to streamline their workforce management. Manufacturers must access real-time data to ensure operational efficiency and remain agile to meet their future workforce and business needs.
2. Manufacturing Operations Back Home
Although manufacturing problems or challenges in the manufacturing supply chain existed before the pandemic, the effects of COVID-19 highlighted those issues. The U.S. International Development Finance Corporation signed a joint memorandum of agreement “to spend $100m of the department’s Coronavirus Aid to subsidize federal loans to create, protect, expand and restore domestic industrial-based capabilities to support the national pandemic response.” Ultimately, it positively affects the economy by creating decent-paying manufacturing jobs and opportunities to become part of a more advanced workforce.
3. The advent of Industry 5.0
Industry 4.0 focuses on the interconnection of machines and systems to achieve optimum performance to improve efficiencies and productivity. Industry 5.0 is touted to take it a step further and refine the interaction between humans and machines.
From a staffing, training, and reskilling perspective, manufacturers need to be mindful of and continue to prepare for the rapidly changing nature of how humans and technology interact. The fifth industrial revolution is driven by continued progress in technologies that drive A.I., machine learning, robotics, data, and analytics. A.I. enables one to act upon data insights and become a significant benefit for recruiters in terms of getting the right talent.
Organizations that arm their employees with effective technologies, learning, and reskilling opportunities will be better equipped to fight the pandemic and beyond. The digitization process from AR/VR simulations will eventually find its place in the manufacturing environment and become especially important in a future work-from-home scenario.
If you’re looking for automation and solutions for your manufacturing processes, contact our experts right away.