14 Manufacturing Trends to Help You Survive 2021
Supply chain disruption. Nation-wide lockdowns. Plant closures.
2020 proved a nightmarish year for the manufacturing industry, one that manufacturers everywhere are keen to move past. Despite all the difficulties of the past year, there is reason to hope: With vaccines rolling out and GDP on the rise, it would appear that the world is, at long last, slowly but steadily returning to normal.
With 2021 now in full swing, there’s no time like the present for manufacturers to start preparing for their future — and there’s no better way to get started than by reading up on these manufacturing trends.
Table of Contents
- 2020: Year in Review
- General Manufacturing Trends for 2021
- Manufacturing Technology Trends for 2021
- Prepare for Your Future with Synergy Resources
2020: Year in Review
We can’t, in good conscience, talk about manufacturing in 2020 without addressing the elephant in the room: the ongoing COVID-19 pandemic. As readers are well aware by now, COVID-19 has caused major disruption to the global supply chain, which has had downstream effects on manufacturing operations around the world. Lockdowns in China, Mexico, Canada, and other major supplier locations brought production in some facilities to a standstill, which has had a major impact on the global economy. The manufacturing industry started to slowly recover in the latter half of the year as countries started to reopen, though manufacturers still found themselves in a precarious position by year’s end.
Recovery will still be a primary focus for most manufacturers in 2021, as will introducing safeguards to protect against future disruption.
General Manufacturing Trends for 2021
Now that we’ve set the stage for the state of the manufacturing industry in 2021, let’s talk about some of the major trends to be mindful this year:
- COVID-19 Exit Strategy Planning
With vaccines being distributed and (hopefully) an end to the pandemic in sight, manufacturers must shift their focus from how to adjust to the “new normal” of COVID-19 to how to create an exit strategy to address business continuity. From figuring out how to safely return operators to shop floors across the country to reevaluating supply chains to mitigate future disruption, we can expect manufacturers to be pragmatic and cautious as they set out on the road to recovery.
- Localized Sourcing & Production
The veritable collapse of the global supply chain due to COVID-19 — which was further exacerbated by heightened global trade tensions — has led to a concerted push for localization and reshoring. According to Thomas survey data, 69% of companies across the manufacturing and industrial sectors reported that they “are likely to bring manufacturing production and sourcing back to North America.” This shift has led many major publications to speculate whether growing localization efforts will lead to a resurgence in “Made in America” manufacturing.
- Increased Consumer Demand
While the global economy took a hit in 2020, online sales certainly did not. In fact, according to data from Salesforce, digital sales were up 45% YoY for the period December 1 through December 14, alone. Although we’re unlikely to see the same surge in online shopping in 2021 as the housebound economy becomes increasingly less housebound, it’s clear that COVID-19 has had an indelible effect on eCommerce and we can expect sales to remain strong.
What does this mean for manufacturers? In short, continued pressure to churn out high-quality products on a relatively short time table and at a lower cost. Many manufacturers across multiple different verticals have already had to ramp up production to accommodate this influx of demand; if sales hold steady, we can expect many more to follow suit.
- A Need for Speed
With increased consumer demand comes a need for speed — as mentioned, manufacturers will be on the hook in 2021 to produce goods at a more rapid rate in order to satisfy demand. The challenge with this is that lead times not only account for how long it takes manufacturers to create products, but also for how long it takes them to source materials from vendors.
Localized sourcing will certainly help shorten lead times, and we also expect manufacturers to start outsourcing different parts of production to reduce them even further. For example, a manufacturer might create different components in-house, but outsource assembly to third-parties. This push for speed will likely reshape the way manufacturers approach supply chain management in the future, making it more collaborative in nature.
- Renewed Focus on Sustainability
As the damaging effects of climate change have come to light, a growing number of B2B and B2C consumers are concentrating their spending on businesses with more environmentally friendly practices, including sustainable manufacturing. In 2015, Nielsen reported that 66% of global consumers were willing to spend more on items produced through sustainable manufacturing, and that percentage has only increased in the years since.
Many major manufacturers have already embraced a more eco-conscious approach — for example, Nestle, Unilever, Mondelez, and PEPSICO have all committed to the goal of having 100% sustainable packaging by 2025, setting an industry-wide standard. Based on this information, we not only anticipate that sustainability will continue to be one of the leading manufacturing industry trends for 2021, but also that it will become a key competitive differentiator for manufacturers around the world.
- Remote Workforce Enablement
If there’s one thing that 2020 has taught us, it’s that organizations across all industries were either unprepared or underprepared for the realities of remote work arrangements. That said, now that they’ve come up the curve, a growing number of companies are starting to realize the benefits of having a distributed workforce, including lower overhead, better overall employee satisfaction, and access to a larger talent pool.
Although manufacturing remains a largely hands-on operation — though even that is changing, as we’ll discuss in just a moment — manufacturers have had to scale back their in-person workforce for safety’s sake. For many manufacturers, this has included instating some sort of work-from-home policy for non-production staff. Originally devised as a temporary measure, with the pandemic still very much in play remote work is likely to remain the norm for the foreseeable future — perhaps even permanently. To that end, it’s imperative that manufacturers make every effort to enable their remote workforce to excel, from equipping them with the necessary tools and technology to get the job done to maintaining open lines of communication and providing support as needed.
- $15 an Hour
The recent push in U.S. for a $15 an hour minimum wage is expected to have a major impact on the manufacturing industry, especially smaller manufacturing companies. As hourly pay increases, so will gross margins, forcing many manufacturers to raise prices in order to offset costs. We expect manufacturers to respond to this challenge by looking for ways to better utilize their existing workforce — most likely through the use of technology and new equipment — and keep labor costs down.
Should $15 an hour come to pass, manufacturers will also need to figure out how to remain competitive despite increasing prices. The most effective way to achieve this is by quoting faster lead times, which will require optimized shop floor flow. Optimizing shop floor flow actually presents multiple opportunities — it reduces operational costs, enables manufacturers to turn over inventory at a faster rate, decreases lead times, enables sales teams to average a higher number of quotes per month, and more — and is a wise investment for manufacturers in 2021, regardless whether minimum wage increases.
- Accelerated Digital Transformation
It likely comes as little surprise to learn that manufacturers that had embraced digitalization prior to the pandemic had an easier time adapting to its challenges; these manufacturers are also expected to have an easier time transitioning to a post-COVID world. For manufacturing companies behind on the digital curve, now is the time to get caught up. In fact, we anticipate an industry-wide sea change in terms of how to approach technology, with a growing number of manufacturers adopting next-generation solutions to simplify production, promote employee safety, and create a more connected workforce.
Technology Trends for 2021
In order to capitalize on any of the trends we’ve discussed, you’ll need the right toolset, starting with these four trending technologies:
Although manufacturing is still a largely hands-on operation, thanks to automation it’s becoming decidedly less so. Automation in manufacturing in and of itself is nothing new, however, the industry’s approach to automation has changed significantly over the past few years.
Rather than seek to replace their human workforce with machinery, forward-thinking manufacturers have found ways to support their existing workforce with robotics. The possibilities are seemingly endless: For example, manufacturers can leverage automation to supplement human labor in high-risk situations, thereby ensuring the safety of their staff. And by automating simple, repetitive tasks, manufacturers can enable their employees to focus on jobs that require a more sophisticated skillset, boosting productivity in the process.
Given that COVID-19 has forced manufacturers to either reduce their staffing levels or rearchitect work in order to ensure operator safety, we can likely expect automation — especially automation to augment human labor — to remain one of the leading manufacturing trends for 2021.
- Industrial Internet of Things (IIoT)
Similar to automation, IIoT is not a new concept in the manufacturing industry, however, it will play an integral role in helping manufacturers navigate the ongoing COVID-19 crisis in 2021.
McKinsey illustrates this point by breaking the road to recovery into three discrete stages:
1. Resolve: How can we ensure business continuity?
2. Return and Resilience: How can we return to business and increase our flexibility to thrive in the “new normal”?
3. Reimagination and Reform: How can we improve our business over the long term, in a world changed by the pandemic, and emerge even stronger?
Each of these stages represents an important component of any manufacturer’s COVID-19 exit strategy, which we discussed earlier. There are various IIoT applications to support each stage — for example, during the Resolve stage, a manufacturer might leverage IIoT to facilitate employee collaboration and workforce tracking, simultaneously safeguarding operations while ensuring employee safety. During the Return and Resilience stage, a manufacturer might use data collected from different IIoT-enabled devices to determine next best action for sales and service and dynamic pricing optimization in order to secure revenue stability.
These are but a few examples of why IIoT will continue to be one of the top manufacturing industry trends for 2021, as manufacturers look for new and innovative ways to leverage existing technology.
- Augmented Reality (AR)
In addition to finding new uses for tried-and-true technologies such as automation and IIoT, we can also expect to see manufacturers embrace emerging technology in 2021. AR, which has long been seen as a viable — if experimental — technology, has seen significant uptake since the start of the pandemic as manufacturers rushed to enable remote workforces.
When used in conjunction with IIoT, AR has the power to enable manufacturing workers to monitor the health of different machines in real time, diagnose and troubleshoot issues, administer remote repairs, and more, from anywhere in the world. With no definitive end to the pandemic in sight, it seems likely that more and more manufacturers will invest in AR technology in an effort to support distributed workforces and maintain business continuity.
- Predictive Analytics
We’ve already spoken at length about how industrial predictive analytics is transforming manufacturing and, if recent events are any indicator, it shows no signs of slowing down in 2021. Although predictive analytics might not have the power to forecast a global pandemic, it can enable manufacturers to proactively identify and prevent potential issues, such as equipment malfunctions and supply chain bottlenecks. Additionally, manufacturers can use predictive analytics to more accurately forecast demand, optimize existing processes, better manage inventory, and engage in continuous improvement. With benefits like these, it’s easy to see why predictive analytics is the future of manufacturing.
- Cloud Computing
Though cloud computing has been around for some time now, we anticipate that it will really take off in the manufacturing industry in 2021. From leveraging cloud collaboration tools for product development and securely storing data to allowing for greater visibility into shop floors operations through IIoT and creating a more integrated supply chain, cloud applications in the manufacturing sector are seemingly endless. Perhaps even more compelling than cloud computing’s ability to transform operations is its scalability, meaning manufacturers can grow their cloud-based systems along with their business.
- Artificial Intelligence (AI) & Machine Learning
Much like cloud computing, AI and machine learning pose endless opportunities in the manufacturing sector. Let’s highlight a few examples:
1. Quality Assurance: Using machine learning processing algorithms, manufacturers can autonomously evaluate produced goods, looking for potential defects and validating whether an item meets quality assurance standards. As a result, the number of returns and amount of rework is reduced.
2. Continuous Improvement: AI-enabled process mining tools can monitor and analyze production in real time and identify bottlenecks and quality assurance issues. Armed with this information, manufacturers can make necessary adjustments to shop floor operations, optimizing performance and engaging in continuous improvement.
3. Inventory Management: Thanks to machine learning and predictive analytics, manufacturers can more accurately forecast demand, thereby enabling them to better manage inventory levels.
Given these and the many other use cases for AI and machine learning in manufacturing, we expect to see continued adoption of these innovative technologies into — and far beyond — 2021.
Prepare for Your Future with Synergy Resources
Take advantage of some of the top manufacturing trends for 2021 with help from one of the most established solutions providers in the industry.
For nearly 30 years, Synergy Resources has provided manufacturers with a wide variety of cutting edge solutions, including ERP systems, delivery performance optimization tools, cloud-based software, and more. We also offer an exciting array of services, from Strategic Manufacturing to Digital Transformation to Continuous Improvement, to help manufacturers realize their full potential.
Innovative technology. Unparalleled experience. That’s the Synergy Resources way. Contact us today to find out what Synergy can do for you.