Heading into 2020, manufacturers had high expectations for the year ahead. According to IndustryWeek’s report, “The Future of Manufacturing: 2020 and Beyond,” 90 percent of manufacturing leaders expected their revenue to grow this year. This outlook also carried over into long-term industry growth. More than half expect annual growth rates to reach 5 percent or more over the next five years.
To achieve that long-term targeted growth, manufacturers are focusing on improvements that will cut expenses and increase output. In the IndustryWeek report, leaders listed their top priorities as improving their process productivity and response speed.
Improving process efficiency is not just a short-term focus for manufacturers. Industry leaders are also optimistic about the long-term benefits. More efficient processes result in higher profit margins, decreased waste and fewer costly production errors – which is more appealing than ever, because rising costs is one of the top challenges for manufacturers. However, being the most efficient is not enough on its own. As this year has taught us, organizations must be able to adapt quickly to unexpected circumstances.
The Manufacturing Challenges of Covid-19
When this report was published at the start of the year, no one in the industry was expecting to face a pandemic of this size. As additional challenges continue to arise from the pandemic, it has only reinforced the need to address adaptability. In a recent article for AutomationWorld, QAD Director of Consumer and Food & Beverage Markets Stephen Dombroski noted that manufacturers must address constraints in their supply chain and create systems that are more flexible if they’re going to survive another event like this in the future.
One major issue brought to light from the coronavirus pandemic is manufacturers’ reliance on Chinese supplies. According to supply chain consultant Kloepfel Consulting, more than 80% of all US companies rely on Chinese suppliers in some capacity. As a result, many major industries, including pharmaceuticals, automotive, medical equipment and retail, all faced shortages when the pandemic closed factories across China. These formidable supply chain disruptions forced manufacturers to shift their production schedules to focus on other items they produce while waiting for supply shipments. This can be a complicated process, and without helpful tools in place, many companies struggle to adapt effectively.
As the old saying goes, necessity is the mother of invention. There have been countless examples in the past of groundbreaking innovations that have come from worldwide challenges. For example, during World War II, conflict with Japan resulted in a US shortage of natural rubber, which they needed to produce military clothing and equipment. In response, companies like Firestone, Goodyear & Goodrich used their combined knowledge of chemicals and production designs to create mass amounts of synthetic rubber that the US military desperately needed. By 1944, their plants were manufacturing 800,000 tons of the material every year. Today, using synthetic rubber has become the standard for most industries.
Looking to the Future of Manufacturing
Manufacturers should take advantage of this time to identify the various disruptions created by the pandemic and put plans in place to address and improve them. IndustryWeek predicts manufacturers that are investing in strategies and tools to minimize supply chain risk and improve their accuracy will be particularly poised for long-term success as we come of the coronavirus pandemic.
Our clients are looking to solve similar issues with our VirtECS planning and scheduling software every day. With the help of VirtECS, they’re able to eliminate waste, reduce idling time, control their inventory and organize resources to maximize their throughput. To get in touch with us about how VirtECS can improve your plant’s efficiency, send us an email at info@combination.com.
