MANUFACTURING MONTHLY THEMES
What ‘MADE in New Jersey’ Manufacturers Need to Watch in 2023
Manufacturing is a complex and ever-evolving industry, and in recent years, several themes have emerged that are shaping the sector’s development. These emerging trends are reviewed and dissected in every edition of Manufacturing Matters magazine. Economic uncertainty, continued supply chain disruptions, and Industry 4.0 are three of the most significant themes that manufacturers must navigate to stay competitive. We’ll dive into these three trends and uncover why they will matter to manufacturers of all shapes and sizes as the industry makes its way through 2023. Explore these themes to better understand today’s business landscape. The more information manufacturing leaders can absorb, the better they can prepare their businesses for the future. There’s no telling what this year has in store but the more resilient a manufacturer can be, the better they will fair no matter what disruptions come their way.
Economic Uncertainty
Economic uncertainty is a major challenge for manufacturers, as it can make it difficult to predict demand and plan for the future. The ongoing COVID-19 pandemic has further exacerbated this challenge, as manufacturers must navigate shifting consumer behavior and volatile global markets. To address this challenge, manufacturers are turning to digital technologies and data analytics to help them better anticipate demand and respond more quickly to changes in the market.
Business leaders are faced with deciphering wavering statements about a future recession or a rebounding economy. Some reports indicate the economy may be rebalancing after years of turmoil caused by the pandemic. The unemployment rate at the end of 2022 returned to 3.5%—back to early 2020 levels.
However, with the positive indications in the labor market, rising inflation is quickly sapping consumer and business cash reserves. People and businesses saved at record levels during the pandemic which has dampened the impact of rising costs. According to VOX, there are three routes the economy can take, and unfortunately, each of them makes it increasingly difficult for manufacturing businesses to plan for the future. They state we could either see a light recession or no recession, and a severe recession is not off the table.2 With such a wide variety of possibilities, manufacturing leaders need to keep their ears to the ground and remain agile to take advantage of opportunities and avoid economic pitfalls.
Continued Supply Chain Disruptions
Supply chain disruptions are another major theme that manufacturers will continue to face in 2023. The COVID-19 pandemic has exposed the vulnerabilities of global supply chains, and manufacturers are now looking for ways to make their supply chains more resilient. This includes diversifying their supplier base, implementing just-in-time inventory systems, and investing in logistics and transportation technologies.
Sourcing materials and components have become easier over the past two years but geopolitical turmoil and residual COVID-19 disruptions mean delays and unreliable lead times will still be a variable for manufacturing businesses. Working on building out resilient supply chains and monitoring potentially disruptive global events will pay off massively.
Resiliency is always the goal when it comes to a manufacturer’s supply chain. How a business can become resilient is the true challenge. It’s a challenge because there are nearly limitless options on how to approach creating stronger supply networks that can either pivot if there’s an issue or resists outside pressure. Whether it’s training logistics professionals to be cognizant of the intricacies in the supply chain, becoming aware of outside and uncontrollable factors that can disrupt a supply chain, or incorporating new technologies that can analyze trends and monitor supply and demand in real-time—the options for manufacturers are endless.
Manufacturers in 2023 must be aware of the unique avenues they’re able to explore to create resilient supply chains. Being open-minded to new ideas and new suppliers is going to be a necessity. Manufacturing businesses need to understand that supply chain woes are not behind them entirely. Maintaining an agile and strategic mindset will be key to succeeding in the new year.
Industry 4.0
Industry 4.0 is a theme that has been gaining traction in recent years, as manufacturers look to leverage advanced technologies to improve operations. Industry 4.0 technologies such as automation, robotics, 3D printing, and IoT are helping manufacturers to improve efficiency, reduce costs, and increase flexibility. By adopting these technologies, manufacturers can increase productivity, reduce waste, and stay competitive in a rapidly changing market.
The industry has been speaking about Industry 4.0 for over a decade. Adoption is slow but becoming more readily available every single day. Technology costs continue to plummet, AI-driven systems are rapidly advancing, and real-world success stories are starting to become more prevalent. Furthermore, Industry 4.0 technologies can directly help manufacturers manage the two previous trends. By incorporating robotics and automated systems, utilizing artificial intelligence and predictive analytics, and increasing supply chain transparency, businesses will be able to mitigate any potentially damaging disruptions or economic downturns they might be forced to confront in the new year.
Economic uncertainty, continued supply chain disruptions, and Industry 4.0 are three major themes that will have a consistent presence throughout the year. Manufacturers must navigate these challenges to stay competitive. Actively working to monitor economic trends, taking a strategic approach to supply chains, and exploring Industry 4.0 technologies will be key factors in supporting the growth and resiliency of a manufacturing business in 2023.