2021 State of Manufacturing Report Reveals Industry Recovery
The new 2021 State of Manufacturing Report from has revealed that the industry is quickly bouncing back from the disruption caused by the COVID-19 pandemic. Investments are being seen in digital transformation, with the aim of improving speed, resilience, and sustainability.
There are still areas of concern, but the report found that lessons learned from the pandemic have enabled companies to implement and create new innovations. Industry leaders believe now is the time to accelerate the pace of change, with 95% saying the pandemic has had long-term effects on their business and that same number (95%) agreeing that digital transformation is essential to their company’s future success.
The pandemic also brought to light weaknesses in supply chains as 94% of survey respondents reported concerns about their current supply chains, and 92% said their supply chains act as barriers to new product innovation.
Moving forward, companies are looking to future-proof their manufacturing, with 62% pursuing a re-shoring strategy, 89% reporting that sustainable manufacturing is a growing priority, and 84% have turned to on-demand manufacturing as a solution.
Fictiv CEO Dave Evans said: “Companies moved quickly and decisively to solve short-term problems but recognised that the limitations of their current supply chains required long-term investment and innovation. Looking ahead, industry leaders are nearly unanimous in their expectations that those digital investments will help them build faster, greener, and more resilient supply chains.”
This was the sixth annual report, which polled hundreds of senior manufacturing and supply chain decision-makers from across various different companies. Themes that emerged from the report include:
Right-shoring vs Re-shoring
- Among those industries with plans to onshore in 2021, 80% of medical device companies report it is a key strategy, followed by 67% in robotics, 61% in automotive, and 45% in consumer electronics;
- 55% report that workforce training is the number one barrier to increasing their US-based manufacturing footprint, followed by cost (43%), insufficient capacity (36%), and lack of access to needed technologies compared to global suppliers (31%);
- Only 10% of survey respondents report they see no barriers to manufacturing in the US.
Supply Chain Concerns Stifle Innovation
- Externally, respondents reported that slow feedback loops with manufacturing partners as well as difficulty sourcing fast, high-quality options to manufacture low-volume builds are among the top NPI barriers;
- Internally, 45% report that rigid internal processes hamper their team’s ability to innovate;
- Moreover, 97% of companies report that supply chain management consumes a significant amount of employees’ time;
- 81% report that quality issues in their supply chain have resulted in cost overruns in the past year;
- 55% report that their existing supply chain presents IT security risks, and 42% report concerns around IP protection risks.
- Limited budgets are a key barrier to hiring new innovation talent for 45% of respondents;
- 44% report difficulty hiring manufacturing talent with the necessary digital expertise;
- 95% of companies agree that expert guidance around manufacturing feasibility for new product innovations would be of great benefit.
Power of On-Demand Manufacturing
- Of the 84% of companies using on-demand solutions, 100% reported a benefit from this strategy;
- The top three advantages were reported as improved quality (62%), transparency (61%), and speed (60%).
Fictiv COO Jean Olivier explained how the pandemic has allowed for new ideas and impacted the industry. “A supermajority of those polled said that their comfort level with work from home influenced their positive attitudes towards flexible manufacturing arrangements. With 84% having used on-demand manufacturing solutions over the past year, it’s obvious the industry is becoming less reliant on the ownership of physical spaces and wholly-owned processes.”