Jun 2, 2021

Factory of the Future: The State of Manufacturing 2021

SmartManufacturing
factoryofthefuture
DigitalFactory
Technology
Manufacturing Global takes a look at the key findings from Fictiv’s ‘2021 State of Manufacturing Report’ 

“To say that the past year has been a wild ride for most—if not all—companies is a vast understatement,” opens Fictiv in the company’s ‘2021 State of Manufacturing Report’ in partnership with Dimensional Research.

The supply chain industry has faced stresses and strains like never before, “we saw global logistics networks scrambling to deliver; and we were inspired as the manufacturing industry regained its ‘hero’ status by producing essential goods throughout this global health crisis,” said Fictiv.

While organisations in 2020 took a responsive approach to the pandemic, Ficitv explains that now is the time to plan and execute a full reset. As we are evaluating what our ‘next normal’ will look like, we can’t help but see the massive opportunities this disruption has created for digital manufacturing.”

Recovery to Reinvigoration 

With 94% of manufacturers reporting that the pandemic has had a long term effect on their business, Fictiv looks to explain what exactly has changed for manufacturing companies since the outbreak of the pandemic.

  • For 68% of manufacturers, improving supply chain resilience and agility is the top business priority for 2021
  • While predictability is a key benefit for manufacturers looking to create more resilient supply chains, companies are also looking to improve their ability to be agile in their response to disruptions
  • 54% aim to increase the speed of product innovation
  • 40% of manufacturers are prioritising investments into sustainable manufacturing processes to reduce their carbon footprint, and take a more proactive approach to mitigating potential future environmental risks
  • COVID-19 has significantly accelerated the shift towards digital and remote processes, the pandemic has created a wider acceptance and adoption both in operations and production

Overcoming Innovation Barriers

“With a whopping 92% stating that they face a variety of barriers when it comes to product innovation and 94% citing concerns about their supply chain, it’s clear that the pandemic has been a wake-up call for manufacturing leaders and executives across the board,” says Fictiv.

Some of the key challenges preventing businesses from innovating include:

Static supply chains 

“Pandemic or not, supply chains can create a lot of friction. Oftentimes, they are complex, intransparent, and inflexible. Changing inventory levels, growing backlogs, volatile freight costs, and countless process steps are just a few of the inefficiencies at hand,” says Fictiv.

  • In total 94% of manufacturers reported concerns about their supply chains
  • 31% of manufacturers report concerns about lack of visibility into operations creating risk and uncertainty
  • 47% of manufacturers have concerns relating to too high overhead costs

Time intensive supply chain tasks

“Speed is key for new product innovation. Being the first to market can make or break a product, technology, or an entire company. But there are both internal and external challenges that manufacturers face today that limit innovation speed,” says Fictiv.

  • 45% of manufacturers report that rigid internal processes are hampering their teams ability to innovate
  • 97% report that supply chain management consumes a significant amount of employee time

Limited Digital Manufacturing Talent

“The case for the benefits of outsourced manufacturing becomes stronger when you look at the variety of workforce challenges manufacturing companies face in 2021,” explains Fictiv, who found that:

  • 45% of manufacturers report budget limitation as a key barrier when it comes to hiring new talent
  • 44% report difficulty hiring manufacturing talent that have the required digital expertise 
  • 95% of companies agree that expert guidance relating to the feasibility for new product innovations world be a great benefit to their operations

Quality issues 

A top challenge faced by the surveyed manufacturers, key drivers of quality issues in the supply chain include poor visibility and lack of performance accountability. 

  • 53% of manufacturers reported concerns relating to the quality performance issues of existing suppliers
  • 81% reported that quality issues in their supply chain has result in cost overruns

Security Risks

“The pandemic has created a big reset for the entire industrial landscape, but maybe no business line has been more deeply affected than IT [...] Given the rise of digital operations across supply chains, IP & IT risks are becoming an increasingly central concern for manufacturers,” says Fictiv.

  • 55% of manufacturers report concerns about an increase in digital operations creating potential IT security risks 
  • 42% report concerns about working with global markets because of potential IP protection risks 

Future-proofing Manufacturing

“One thing is clear,” says Fictiv, “manufacturers don’t want to repeat the disruption of 2020. The survey data revealed three key trends around how companies plan to ‘future-proof’ their supply chains.”

On-Demand Manufacturing

“Leveraging a digital ecosystem with a pre-vetted network of global suppliers opens up time and opportunity to focus on the core competencies of a company: innovate and grow. Following industry trends towards full customisation and consumer-centrism, on-demand manufacturing offers scalable options for low-volume and mass production,” explains Ficitv. 

With 100% of manufacturers surveyed that use on-demand platforms (84%) report that they have benefited from the technology. Benefits include:

  • Improved manufacturing quality (62%)
  • Better transparency and visibility for in-progress order (61%)
  • Faster development cycles (60%)

Re-Emergence of Made in America and Areas for Investment

“For many years, China had been the virtually undisputed go-to destination for high-quality manufacturing at low cost. And yet, 62% are pursuing a re-shoring strategy for their manufacturing operations for 2021 and beyond, especially in the medical device and robotics industrie,” says Fictiv.

While more than half of organisations are looking to re-shore their operations, some key investments will need to be made in order to mitigate concerns around employee skills, capacity, cost, and technologies.

  • 55% of the manufacturing workforce lack the training to run the latest technologies 
  • 36% are concerned about insufficient capacity
  • 43% are concerned about costs being too high
  • 31% believe that they have less advanced manufacturing technologies compared to other global suppliers 

Sustainability

“The industrial sector has an enormous carbon footprint. With economic and societal pressure for change on the rise, advancing sustainability is not only a goal but a key need for manufacturing. For 89%, sustainable manufacturing is gaining importance in 2021, with more than two-thirds of C- or VP-level executives reporting that it is increasing to the highest level in their corporate history,” says Fictiv.

Key barriers for manufacturers to overcome include:

  • Limited control over sustainability standards of suppliers and partners (58%)
  • Good intentions but no practical plan (36%)
  • Lack of funding (20%)
  • Not a priority for executive leadership (13%)
  • Do a good job with small projects but struggle to scale (43%)

Share article