5 Key Manufacturing Challenges (And What to Do About Them)
After years of sluggish growth (and in several cases, decline), followed by a global pandemic that shut down entire nations, you’d think that manufacturing would be on the brink of disaster.
However, the U.S. manufacturing sector has shown incredible resiliency and innovation, leading to a whopping 14.2% growth rate in 2022. That’s definitely a positive forecast, but even those enjoying growth will continue to face manufacturing challenges in 2023 and the years ahead.
We talk with manufacturers of all sizes every day and hear first-hand about the problems they’re dealing with. Their struggles are real, so we’re highlighting a few of the most pressing and providing insights into how industrial manufacturers can address them head-on.
- Labor Shortage
- Supply Chain Disruption
- Inflation
- Keeping Up With – and Leveraging – New Technologies
- Engaging Qualified Leads
1. Labor Shortage
The manufacturing industry already struggled to fill available positions prior to the pandemic, and now the challenge has only deepened. Making things worse, baby boomers are exiting the workforce in record numbers and taking valuable skills with them. While automation and robotics may help fill the skills gap, workers are still needed to apply problem-solving capabilities, perform analyses, and manage production lines.
To ensure they’re building a workforce for the future, some manufacturers are partnering with local community and technical schools to support trade programs, or training candidates on everything from die making and welding to robotics and sheet rolling. A key factor in addressing labor issues, however, is optimizing existing workforces by aligning teams and their technologies, processes, cultures, and strategies.
Manufacturers also need to get creative in their efforts to attract workers by meeting them where they’re at — not through newspapers, radio, TV, or billboards, but online. The more effective way to connect, especially with millennials, is through social media.
Keep in mind that younger generations today aren’t just looking for a career; they’re looking for a positive culture focused on employee and community wellbeing. Use video to highlight the benefits of working for your organization, and promote your workplace culture as a primary asset.
2. Supply Chain Disruption
There’s a link between supply chain disruption and the inability to fill manufacturing jobs. A lack of workers is woven throughout the supply chain, including manufacturing, warehousing, distribution, logistics, and more.
While some producers express fewer concerns about supply chain issues than they did a year ago, challenges still remain. Nearly eight in 10 (78.3%) manufacturers said supply chain disruption was their primary challenge, according to a Q3 2022 survey by the National Association of Manufacturers.
Supply chain issues have impacted the manufacturing sector more than any other industry. Offshoring of electronic components combined with the effects of the pandemic and shipping delays contributed to major supply chain disruptions. But it’s not just technology. Domestic production struggled to keep up, too, with everything from aluminum and lumber to baby formula and beer.
Did we mention butter and bacon were also in the mix? Say it isn’t so!
Supply chain management issues exposed vulnerabilities in the “real time” manufacturing process that was supposed to improve efficiencies and inventory management. It left some companies scrambling to catch up after demand surged faster than expected in the wake of the COVID-19 pandemic. Companies that can combine their agile practices with the ability to quickly pivot have an advantage.
If there’s one positive spin on the supply chain dilemma, it’s the resurgence of “Made in America” products to help minimize reliance on global suppliers. That’s one manufacturing trend we gladly embrace.
3. Inflation
Closely tied to supply chain disruption is inflation, which inched toward double digits in the last year. When goods and raw materials are harder to find, they inevitably become more expensive.
One study indicated lower optimism than the year before among many manufacturing business leaders, with about one-quarter citing inflation and economic decline as the reason. Rising prices make it harder to compete and remain profitable, but a saving grace for many is that they’re not alone. Every single respondent said material costs went up, with nearly all saying they passed those increases on to customers. As a result, the inflationary cycle perpetuates.
In addition to increased raw material prices, manufacturers face higher freight and transportation costs (85.4%) and energy costs (54.4%). And because they struggle to find and retain strong workforces, they’re having to pay more for wages, health care, and other benefits. Of note is that about one in five (21%) cite the war in Ukraine and global instability as contributing factors.
While there’s little one can do about inflation, it’s important to remember that demand for goods remains strong and even increased for the majority of manufacturers
4. Keeping Up With – and Leveraging – New Technologies
Automation, the Industrial Internet of Things (IIoT), robotics, cloud computing, industry 4.0, predictive maintenance, and more…technology is advancing at warp speed, and most manufacturing companies struggle to keep up, let alone stay on the leading edge. By the time many IT departments have gone through the process of researching, getting approval, purchasing, and installing new technology or equipment, a faster and more agile solution may have already emerged.
Today, manufacturers should take note of these important digital transformations:
- The Internet of Things (IoT) market is growing rapidly, with more than 75 billion connected devices being installed globally by 2025, with a value topping $1 trillion. The IoT market is expected to grow nearly five-fold through 2029 at a CAGR of 26.4%
- Fueled by advanced connectivity and sensor technology, smart manufacturing will drive growth by adopting IIoT devices that boost productivity, enhance product quality, reduce costs, and streamline project management
- As IIoT and intelligent systems are more widely used in smart factories, there will be an associated surge in the amount of data manufacturers generate. What’s needed is the ability to analyze all that data. Updated Enterprise Resource Planning (ERP) technology can help manufacturers manage volumes of data and formulate insights that lead to better decision-making.
- With the rapid advancement of technology the last few years, customer expectations are at an all time high. Prospects and existing customers expect a frictionless experience from first touch with your company through onboarding and ongoing customer service. Manufacturers need integrated CRM technology to fulfill these expectations so that all customer-facing teams are using a single source of information when interacting with customers.
It’s also worth noting that outdated systems are often incapable of addressing the number and complexity of cybersecurity threats today. Businesses need to employ more sophisticated ways of securing their networks, as the traditional firewall approach may not be adequate to keep hackers from accessing systems and doing major damage
5. Engaging Qualified Leads
Traditional marketing efforts for manufacturers are proving far less effective than in the past; trade shows, trade ads, and cold calls aren’t working like they used to. In the digital marketing age, organizations need to do more than put up a website and hope their best prospects stumble across it.
Industrial B2B marketers and sales teams need to make a concerted effort to attract, engage, and delight prospects, which starts with getting found organically through online searches by providing a wealth of information that demonstrates relevance and expertise. That means they need to leverage inbound marketing and SEO tactics by creating valuable content that provides answers to potential customers’ questions and problems.
What is Inbound Marketing (in a Nutshell)? Get the Infographic!
Robust manufacturing marketing strategies generate sales-qualified leads by building trust through relevant blogs, case studies, eBooks, infographics, and other helpful resources. Once trust is built through online engagement and leads are nurtured through the sales funnel, those leads are more likely to engage on a personal level. It might start with a request for a free consultation, demo, assessment, or other offer from the company.
Creating all that content takes time. Just like the products you develop require the right skills, a high level of expertise is needed to make your organization’s content rank higher in search engine results. Enlist the help of inbound marketing experts who understand your pain points and are laser-focused on the manufacturing sector. When you do, you’ll be better equipped to meet these challenges head on.
To learn more, check out our Inbound Marketing Guide for Industrial Manufacturers. Then, reach out to us to start a conversation!
