Following a remarkable post-recession recovery, manufacturing is poised to benefit from continued growth and investment throughout this year.
In November 2013, the U.S. trade deficit dipped to its lowest level in four years. Meanwhile, industrial stocks realized a five-year growth pattern of a solid 183 percent. Analysts agree that manufacturing will recover to pre-recession levels by the end of 2014.
More than 665,000 industrial jobs have been added to the U.S. economy since the low point reached four years ago. While this is far short of replacing the nearly 7 million jobs lost over the past three decades, it’s very encouraging, especially since the onset of lean practices and burgeoning technology enable factories do effectively do more with less.
Technology Drives the Factory of the Future
The year 2014 will see manufacturers striving for innovative ways to leverage technology to gain efficiencies and optimize productivity. Trends to watch for include:
- 3-D value streams: Businesses will quickly see how efficient additive manufacturing is when processes begin to flow horizontally versus vertically. This requires plants to break down departmental walls so everyone works toward the same end goals.
- Operations technology: Manufacturers will use Big Data to learn more about how people use products throughout their lifecycle. This can be leveraged to pinpoint additional services to offer; for instance, the remote monitoring of assets to offer proactive maintenance.
- Consumer apps: Apps will find their way to the shop floor as employees expect the same high level of functionality to be available to them. Handheld solutions will become simpler to use, ensuring wider adoption.
- Supply chain modernization: Many manufacturers have already adopted technical solutions, but they were built into aging backbone systems. Bringing your supply chain up to current standards can get complicated if your business partners are not at your level. But here’s where technology can offer a solution. By moving to the cloud, companies are eliminating long lead times and the high costs of new infrastructures.
- The Industrial Internet: Increasingly, manufactured products are being outfitted with sensors and Internet connectivity. This allows them to broadcast back data on how they’re being used, why they’ve broken down and when they need to be serviced. By 2020, 40 percent of all data may flow from such sensors. It’s been estimated that the Industrial Internet will add $10 trillion to $15 trillion to the global gross domestic product in the years ahead.
Reshoring and Wage Trends
Workers’ wages have flattened in the U.S., but are soaring in China. Domestic energy prices have fallen and many North American companies plan to rely less on foreign plants, where quality and delivery issues are more difficult to control.
The economic research firm Global Insight predicts that 2014 spending on manufacturing equipment by U.S. companies will grow 7 percent from 2013. This doubles the previous year-over-year increase of 3.5 percent.
- The existing skills gap will widen. As reshoring expands, so do concerns regarding the availability of enough skilled workers to support this growth. Recent research has shown that 27 percent of manufacturers are already experiencing high degrees of staffing difficulty. This number is expected to reach 36 percent in five to ten years.
The recruitment and workforce management experts at Premium Staffing have their pulse on all the latest market intelligence as it pertains to manufacturing talent management. To learn more, contact us today.