5 challenges facing global manufacturing

Under normal circumstances, operating a successful manufacturing facility that realizes its full production potential is a task requiring constant problem solving, flexible systems management, and technological resilience.

The past few years have been anything but normal for global manufacturing, and SMEs have faced exacerbated labor shortages and supply chain disruption on top of the perennial challenge of making continuous productivity and quality improvements.

Manufacturing SMEs can survive and thrive through 2023 and beyond by deploying affordable, best-fit automation and digitalization solutions.

Challenge #1: The labor crisis

The manufacturing sector’s labor crisis is a global problem impacting SMEs across all verticals. A recent report by Deloitte and the Manufacturing Institute found 500,000 jobs remain unfilled in U.S. manufacturing alone. It’s 36% harder to find talent today than in 2018. The authors estimate 2.1 million manufacturing jobs could be left unfilled by 2030. This pattern is repeated around the world from South-East Asia to China to the European Union.

Today’s younger workers are digital natives. This creates expectations around technology, digitalization, and automation that SMEs have – until recently – been unable to fulfill due to the cost and complexity of traditional solutions.

One way to attract younger workers to manufacturing is through the introduction of modern technologies. A 2021 survey of frontline manufacturing workers in the United States, Germany, France, Spain, and the United Kingdom revealed 45% would leave their current employer if given the opportunity to work in a more modern, digital environment. That rises to 55% among respondents aged 18 to 24.

Challenge #2: The supply chain

The gradual lifting of restrictions in 2022 has caused a rise in demand, which has compounded pandemic-related supply chain issues. Order backlogs compounded by labor shortages have pushed many companies beyond their production capacity.

Manufacturers must plan differently and over longer time periods than pre-pandemic. Consequently, a new vision has emerged: Instead of the pre-pandemic model of one global factory making everything and shipping it around the world, companies are sourcing products from local, SME-sized manufacturing facilities.

This trend is likely to grow with the result that we’ll see fewer very large factories and more SME-size manufacturing facilities and suppliers. For global companies, this will ensure a more manageable supply chain. For SMEs, it’s an opportunity – provided they have the right automation and digitalization tools to quickly scale up production.

Challenge #3: Quality improvements

Improved quality leads to higher customer satisfaction and better price control, reduces waste, and lowers overall costs. In recent years, including pre-pandemic, the concept of quality shifted from being treated as a matter of operational compliance to being understood as a strategic business driver.

Industrial automation supports these efforts by ensuring consistent quality and 24/7 availability. However, traditional industrial automation is beyond the budget and know-how of most SMEs. Plus, traditional automation has a large footprint that isn’t a good fit for small manufacturing facilities. Traditional automation also requires extensive safety guarding and fencing and isn’t safe to deploy in the same workspace as humans.

Challenge #4: Staying competitive

For SMEs, lowering costs and increasing productivity are the primary ways to gain a competitive advantage. Automation and digitalization are key, as they enable companies of all sizes to benefit from cost savings and improvements in productivity and throughput.

Unfortunately, SMEs aren’t a good fit for traditional industrial automation solutions, which are too costly and complex, and take too long to deploy. When time is of the essence, traditional automation is a solution arriving too late.

So, while larger manufacturing companies have been scaling up their automation and digitalization efforts, SMEs have often been left behind.

Challenge #5: Sustainability

As global manufacturing moves to more sustainable models, SMEs incorporate new practices into their business. In the U.S., the Environmental Protection Agency defines sustainable manufacturing as the creation of manufactured products “through economically-sound processes that minimize negative environmental impacts while conserving energy and natural resources.”

The central pillars of global sustainable manufacturing initiatives are waste reduction, adoption of flexible manufacturing processes, and improving safety and ergonomics for workers. Rising energy costs are driving companies to look at their energy consumption. Traditional automation is fast, powerful, but also energy intensive, leaving SMEs in a tough spot.

Reasons to be optimistic

The emergence of collaborative automation has completely changed the automation adoption dynamic for SMEs. Collaborative hardware and software are easy-to-use, safe, and affordable. Designed to level the technological playing field between SMEs and larger manufacturing companies, collaborative automation and digitalization solutions bridge the technology gaps traditionally holding SMEs back.

In one fell swoop, a collaborative automation deployment can fill labor shortages, improve ergonomics and employee retention, and help attract younger, digital native workers. Moreover, increased productivity improves the ability to handle backlogs and supports reshoring initiatives.

Improved quality and reduced waste from a collaborative automation deployment boosts competitiveness. And, since collaborative automation is less power hungry than traditional industrial robots, it provides a way to maintain output while reducing consumption.

2023 is likely to be a challenging year for the manufacturing sector. However, SMEs can face the year ahead with optimism by deploying collaborative hardware and software.

OnRobot
https://onrobot.com

About the author: Kristian Hulgard is general manager, Americas Division, at OnRobot and can be reached at kristian.hulgard@onrobot.com.