2022 has been yet another year of massive change for the manufacturing industry. Throughout the past twelve months, we’ve seen seismic shifts within the energy market and in labour availability as well as significant supply chain disruptions.
And unfortunately, all this disruption shows little sign of abating as 2022’s economic volatility rolls into the new year, and consumer expectations around quality continue to rise – all of which leaves manufacturing facing the paradoxical challenge in 2023 of doing more with less.
With rising costs and shrinking capital, the growing competitiveness of the UK market has already driven the industry to think very differently, to challenge the norms around manufacturing and how we orchestrate the ecosystem.
But what have we left to do in the year ahead? Here are the key manufacturing industry trends that we predict to see in 2023.
Transparent demands
As companies’ societal and sustainable impacts continue to be the topic of hot public debate, consumers are being driven to think much more carefully about what we spend money on and from where. With this, customers are becoming increasingly discerning, demanding higher levels of quality and transparency – a trend that we’ll see well into 2023.
Faced with these rising demands, manufacturers must look to increased efficiency as the answer. We’re likely to see demand continue for individualised products at the luxury level in 2023, but there will also be more pressure on low-margin, high-volume consumer packaged goods (CPG), which require investment to deliver greater efficiency through automation. Organisations will need to keep challenging themselves to take the base cost out of engineering, manufacturing, and operations from the idea stage right through to market as quickly, cheaply and pragmatically possible.
As they bid to become more efficient with resources, and learn to sell more using more cost-effective methods, we’ll see a prevailing culture of doing more with less in the year ahead. But to truly succeed, this will need to go hand in hand with driving competitiveness through a focus on portfolio growth, or finding new markets.
Proof of sustainability
Already high on the agenda, sustainability will continue to be a huge focus for manufacturers in 2023, as they look to win over more discerning consumers with their environmental progress. While many organisations have previously shared their net-zero commitments, consumers now want proof of action – with their expectations extending beyond carbon reduction within factory walls to the broader supply chain. In light of this, manufacturers will be keen to demonstrate how their factories are more efficient as a starting point i.e. using fewer diesel-powered forklift trucks versus lower-emission autonomous, electric-powered vehicles.
Indeed, automation will be a reoccurring theme, with AI and ML employed to help company databases become more intelligent i.e. proactively getting ahead of (energy and emission-heavy) machine repairs by using automation to trigger alerts to engineers based on IoT device and smart sensor data.
Workforce diversity, retention and upskilling
As manufacturers try to balance being more efficient and sustainable in a more costly environment, while still turning a profit, labour retention and upskilling will be another core issue in 2023. More specifically, companies will find themselves challenged to ensure their workforces are diverse and skilled enough to meet the demands of being smarter and more efficient in an ever-competitive market.
Importantly, this means not only being smarter about leveraging their workforce more effectively in order to derive new revenue opportunities, but also making best use of its knowledge base. Many will realise that they must invest in their people to instil the next generation of workers with the skills needed to unlock new, creative problem-solving capabilities and get the results they want. But for this to happen, there needs to be a change in leadership mindset i.e. being willing to give employees more freedom to explore new technologies or solutions that might help accelerate the business in the long run.
In the year ahead, we also expect to see a real drive towards a more fluent and digitally-native workforce culture, enabling quick and more complex decisions based on reliable data sources.
Investing in new digital infrastructure
To successfully navigate this unstable market, complex decisions need to be made quickly – something that relies upon the collation of accurate and reliable data through digital transformation. But, as many organisations continue their transformation journeys, they are rapidly approaching their network limits. To function on a truly smart level – using digital technologies to improve or create new business processes, culture, and customer experiences – organisations need to invest in better infrastructure. This includes the seamless connection of key enablers of enterprise platforms, such as cloud, cybersecurity, 5G/EDGE/IoT, AI/ML and RPA.
We’ll see this trend intensify in 2023, as businesses look towards new infrastructure that has wider network bandwidth and better all-round capabilities, enabling their manufacturing systems to talk more easily to each other to improve efficiency and save on costs.
However, ripping out legacy infrastructure and installing new systems while continuing to operate business as usual will prove challenging for many. We must solve the paradox of concurrently disrupting and providing business continuity – requiring company leaders need to build positive disruption into their delivery plans. Given this, we’re likely to see an increasing number of manufacturing organisations contemplating both short and long-term digital transformation plans, with a need to embed this drive into the culture of their business.
Graham Upton, technology & innovation director and chief architect intelligent industry at Capgemini, and Mike Dwyer, head of intelligent industry at Capgemini
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