Manufacturing is a pillar of the global economy, responsible for creating jobs, generating tax revenue, and driving economic growth. The National Association of Manufacturers (NAM) reports that every dollar spent in manufacturing generates $2.74 in economic activity. In 2020 alone, over $2.24 trillion in value was added to the U.S. economy from manufacturing. In GDP terms, that would make U.S. manufacturing the eighth largest economy on earth.
One contributor to that growth in recent years has been the rise of onshore manufacturing, which has created more demand for factory space to ensure uninterrupted supply chains, lower costs in many cases, and more control over product quality. A recent report by Forbes reveals that 89% of manufacturing executives talk of relocating factories, and 59% are having difficulties getting goods and parts from China. This strategy is accelerating as companies look to diversify their product sources, protect intellectual capital, and take advantage of government incentive programs.
Manufacturers are a critical part of both the economy and the global supply chain, but even they aren’t immune to market volatility and issues like labor shortages, supply chain challenges, and environmental regulations. Manufacturers are facing significant headwinds in today’s economic climate. But with the right technology tools in place, they can become more efficient, meet consumer and market demand, and leapfrog ahead of the competition.
Key Market Hurdles Impacting Manufacturers
Labor shortages: Like so many other industries, manufacturing is in the midst of a historic labor shortfall as fewer workers pursue careers in the sector. NAM reports that 2.1 million of the needed four million manufacturing jobs are expected to go unfilled over the next decade. The potential economic impact of this could reach $1 trillion by 2030.
Supply chain disruptions: As we saw first-hand starting in 2020, supply chain disruptions can quickly cascade, resulting in increased costs and materials being unavailable. These disruptions remain a perennial area of concern for manufacturing leaders as of late 2022, with 78% citing it as a primary business challenge, according to NAM.
Environmental regulations: The cost of compliance with environmental regulations can be a financial burden that disproportionately affects manufacturers compared to other industries. NAM cites data that shows manufacturers pay $19,564 per employee on average to comply with federal regulations, nearly double the $9,991 per-employee costs incurred by all firms. Smaller manufacturers (those with 50 or fewer employees) have it even tougher, spending 2.5 times as much on compliance as their larger counterparts.
Environmental regulations pose a significant challenge for manufacturing businesses. This is due in large part to growing pressure from consumers, investors, and regulators to reduce greenhouse gas emissions, conserve natural resources, and adopt more sustainable practices.
What Makes a Successful Manufacturing Company
In order to be successful, manufacturers must contend with challenges across multiple fronts, and be able to quickly adapt to ensure total continuity even as demand and market conditions change. The most successful organizations in the sector prioritize efficiency, quality, innovation, supply chain management, and compliance to stay competitive. They fulfill the needs of customers and avoid litigation while meeting market demand with quality goods.
How a Reliable Construction Technology Partner Can Help
Choosing a trusted technology partner can be a secret weapon for navigating the many complexities unique to manufacturers. With the right technology and processes in place, even massive manufacturing companies can stay light on their feet to quickly adapt when necessary. A reliable technology partner can help boost manufacturers’ resilience against market volatility, providing tools that keep fingers on the pulse of productivity and the financial performance of their projects in preconstruction and construction.
A technology partner is great for helping manufacturing companies overcome their biggest challenges, but they can also help them achieve their biggest goals. A good tech partner boosts efficiency and productivity, assisting companies in ensuring a smooth construction process.
It can even provide a competitive advantage. By ensuring the construction of new manufacturing plants go live on time, companies are able to meet market and consumer demand for their products and goods without delay. Manufacturers thrive on predictability. In an unpredictable world, the right technology partner can make all the difference in ensuring fewer surprises.
Manufacturing companies must often grapple with forces beyond their control, such as market volatility, that make doing business harder and more expensive than it needs to be. But given their pivotal role in the global economy, manufacturers rarely have the luxury of watching things unfold from the sidelines. In order to be successful in a challenging economy, manufacturers today must be nimble and resilient, and prepared to weather any storm that comes. With the right technology in place, your business will be ready to face any obstacle head-on.
Learn how companies like Tyson Foods leverage technology to stay ahead of any risk that comes their way.