The topic of digital transformation has become a dominating theme in 2022 due to the ripple effect that COVID-19 has had on the global supply chain, not to mention the recurring political and economical friction among leading nation-states.
Between Brexit, the USA-China trade war, and nationwide lockdowns, industrial manufacturers around the world are feeling the burn of global supply shortages and the dramatic change in consumer demand.
According to an Ernst & Young survey, only 2% of companies believed that they were prepared for an event like the Covid-19 pandemic, and as Forbes so eloquently puts it “Where do we go from here!?”
To find the answers, we did the research so that you don’t have to – in this article, learn about industrial manufacturing trends, the challenges that this industry faces, and the promise of the future: reimagining the global supply chain using the power of digitization.
Industrial Manufacturing Market Trends
Industrial manufacturing is critical to the economy, some may even call it the backbone. Being responsible for the production of essential goods and products, from food and beverages to pharmaceuticals and medical devices, industrial manufacturing plays a vital role in our everyday lives.
However, this sector operates in a volatile landscape and faces numerous challenges, including:
- Logistics disruptions
- Production delays
- Increases in the price of commodities
- Government regulations and compliance
To navigate these challenges, supply chain resilience is quickly becoming a buzzword as companies learn to adapt and recover from the series of unfortunate events that have impacted this 16 billion Euro industry (which is expected to reach 31 billion by 2026).
It can be challenging to keep up with this transformative domain. Being aware of the latest trends can give companies a fresh perspective and find new ways to stay ahead of the competition.
In the spirit of operational resilience, here are three industrial manufacturing market trends that you should be aware of:
Adaptability
The world is constantly changing, and businesses have little choice but to adapt. This is especially true for industrial manufacturers. They are often kept on their toes, having to evolve according to not only the demand and supply of goods but their production journey as well.
Boston Consulting Group (BCG), one of the first to use the term “adaptability” in 2013, explained the need by saying: “As supply chains become more complex and more globally interconnected, the impact of external forces and disruptions in the business environment continues to grow. These forces are placing unprecedented pressure on supply chains: the nature and degree of customer demand have become harder to anticipate, product lines have become more complex, and the pressure to lower the cost of goods, reduce working capital, and improve performance continues to mount. At the same time, the cost and availability of key supplies and materials are becoming more volatile, while macroeconomic and geopolitical maps are evolving at varying speeds.”
To be adaptable, here are some key characteristics for success according to a report compiled by BCG:
- The ability to respond quickly to sudden changes in demand.
- A deployment strategy that can adapt to shifts in key markets, labor rates, and other factors.
- A strategy for responding resiliently to unforeseen disruptions, whatever the cause.
- The ability to create a digital business that uses advanced supply chain technologies to build supply chain connectivity, agility, and visibility.
Risk Management
Managing risk is at the top of every business plan. This is evident from the survey conducted by McKinsey, where 95% of companies said they now have formal supply-chain risk-management processes.
As a result, many companies have put in place supply chain risk management programs to minimize the impact of such disruptions. While supply chain risk management cannot completely eliminate all risks, it can help to mitigate the impact of disruptions and keep businesses running smoothly.
Compliance is a key part of risk management. Are you compliant or complacent?
Strategic partnerships
For a supply chain ecosystem, strategic partnerships are becoming increasingly favored. By looking to trustworthy and innovative third parties, companies are better equipped to keep up with the speed of change, serving as a valuable tool that will support sustainable operations and agility.
Sensolus prides itself on its partnership model. We have realized that true market power lies in collaboration – leveraging the strengths of each company to achieve a mutual goal. For example, Sensolus has numerous partners in the industrial manufacturing sector that are perfectly equipped to offer ERP integration services, which bridges the gap between Sensolus technology and existing solutions.
Follow this link for more information about the Sensolus partnership program or book time to learn about how our solution can transform your business.
Industrial Manufacturing Technology Trends
Technology is changing how industrial manufacturers operate, and organizations are looking beyond the status quo for solutions.
Below is an indication of the leading trends anticipated to impact supply chains by 2025:
It is no longer the case of looking to older/outdated solutions, the future depends on the digital innovations that companies like Sensolus have to offer, including:
Visibility Solutions
Gartner Group estimates that by 2023, 50% of leading global enterprises will have invested in real-time transportation visibility solutions.
In industrial manufacturing, the visibility of assets within the supply chain is critical, however, this was often a flawed, manual process before digitization came along. By being able to see where your inventory is at every step of the supply chain, you can more effectively manage stock levels, minimize disruptions, and ensure the timely delivery of goods.
In addition, visibility can help you identify potential problems early on and take corrective action before they cause significant damage.
While industrial manufacturing has traditionally been a highly centralized and controlled process, the increasing visibility of assets is leading to a more decentralized and dynamic supply chain.
The shift towards a more decentralized supply chain comes with many potential benefits, including greater flexibility and adaptability in the face of changing conditions.
By harnessing the power of visibility, companies can build a more resilient supply chain that is better equipped to meet the challenges of the future.
Follow this link to learn about how Airbus benefits from our visibility solution.
Automation
As the world of business becomes increasingly complex, so do the supply chains that support them. That’s where automation comes in.
According to the International Data Corporation (IDC), a leading market research firm, logistics companies are expected to dedicate 35% or more of their business processing budget to process automation, in inventory, order, and shipment tracking.
By automating key processes within the supply chain, businesses can enjoy a number of benefits that lead to more efficient operations. One of the biggest benefits is improved accuracy. Automating data entry and tracking eliminates the potential for human error, ensuring that information is always accurate and up-to-date. This is especially important in time-sensitive industries such as logistics, where a single mistake can have costly consequences.
Leveraging the Power of Data
Big data offers a wealth of benefits for those in the logistics and supply chain management industry. For one, big data can be used to geolocate inventory and track shipments more effectively. This allows for improved coordination between suppliers, manufacturers, and retailers, leading to reduced costs and increased efficiencies. In addition, big data can be used to identify trends and patterns that can be leveraged to optimize the supply chain.
By understanding where bottlenecks occur and where delays are likely to happen, businesses can make changes that lead to a smoother, more efficient operation. Finally, big data can help businesses to better forecast demand, ensuring that they have the right products in the right place at the right time.
In an increasingly competitive marketplace, those who are able to make use of big data will have a significant advantage.
By digitizing processes and data, industrial manufacturers can gain a better understanding of their supply chain and identify areas where improvements can be made. Additionally, with a holistic view of their supply chain landscape, companies can reduce costs and improve performance.
Looking to the future of supply chain management
2022 has been a year of challenges, but also a year of opportunity for industrial manufacturers. As we enter into 2023, it’s important to keep an eye on the future and plan for what’s next. The trends we’ve outlined in this article will be crucial for success in the coming years. Industry 4.0 is no longer a buzzword – it’s becoming a reality. If you haven’t started your digital transformation journey yet, now is the time. Sensolus can help you take those first steps toward supply chain resilience, greater visibility, and digitization.
Contact us today to learn more about how we can help you stay ahead of the competition in 2023 and beyond.
