This year, manufacturers are embracing innovative solutions to update their operations, address labor shortages and fortify their defenses.
And they’re doing it all with the help of some new friends: emerging technologies, such as AI and robotics. They’re also leaning on a few old friends, including reliable and modern cloud-based ERP and CRM solutions.
The goal is to drive growth, improve productivity and hone their competitive edge in the second half of 2024.
AI at the Forefront
Let’s start with the elephant in the room: AI. Artificial intelligence has emerged as a game-changer for many industries. Manufacturers are excited about its potential to analyze vast amounts of data and uncover valuable insights to quickly identify inefficiencies, mitigate risks and aid in data-driven decision-making.
While many are still exploring real-life use cases, other manufacturers already use AI-powered tools to optimize production planning, improve demand forecasting, automate inventory management and enhance product quality control.
A priority for many in our Industry Pulse survey is evaluating ERP and other solutions with AI in mind. Respondents highlighted AI as having great potential to streamline and make back-office operations more efficient. In particular, they named marketing and customer service as low-hanging fruit for benefits from AI capabilities. But many manufacturers still need to solidify their ERP and CRM foundations before they can fully leverage the power of AI.
Cybersecurity Rises as a Top Priority
Widely publicized cyberattacks have been a wake-up call for manufacturers. Businesses now believe that cyberattackers are more likely to focus on business disruption and reputational damage, according to the World Economic Forum Global Cybersecurity Outlook.
Businesses also expect a catastrophic cyber event is on the horizon, with 91% of respondents believing that a far-reaching cyber event is at least somewhat likely in the next two years. A little less than half think a cyberattack will materially affect their organization in the next two years. Companies are allocating more resources to protect their businesses from these threats.
They are also starting to look at the threat more holistically, recognizing that their supply chains – vendors, distributors and customers – influence their risk. Emerging technologies such as AI and the Internet of Things also add more points of vulnerability across a manufacturer’s supply chain and within its operations.
In 2024, manufacturers are prioritizing cybersecurity measures to protect critical data and IP and keep operations running. Implementing robust cybersecurity frameworks, leveraging encryption, conducting regular vulnerability scans and investing in employee education and awareness programs will be key to mitigating risks and protecting their supply chains.
Doing More with Less: Addressing Skilled Labor Shortages
Manufacturers are still grappling with skilled labor shortages. In the latest National Association of Manufacturers Outlook Survey, manufacturers named the inability to attract and retain talent as a top challenge thanks to the low unemployment rate.
The industry lost 1.4 million jobs in the pandemic and while the market has improved significantly, the U.S. Chamber of Commerce reports that a big gap still exists.
To fill it, technology is playing a leading role. Some manufacturers are investing in automation, such as fast-evolving collaborative robots (cobots) to automate repetitive and augment labor-intensive tasks, augmented reality (AR) and virtual reality (VR) for on-the-job training and predictive analytics for workforce planning. Technologies like Internet of Things (IoT) and machine learning are gaining ground as they streamline processes, reduce downtime and enhance quality control.
Modern cloud-based ERP solutions can also automate repetitive finance, accounting, sales and other admin tasks, eliminate data silos and reduce workarounds – improving the employee experience and allowing team members to do more with less.
Room for Improvement
That said, there’s a lot of potential for growth in the industry. In our latest Industry Pulse Survey, one-third of respondents said their current ERP was implemented in the past 10 years. Sixteen percent said their ERP was over 20 years old. A tenth don’t even have an ERP system. Before manufacturers can fully benefit from newer technologies, they need to make sure they have a solid foundation, starting with their core business systems.
But given conditions today, the need to evaluate technology options in 2024 is critical. To increase resiliency, reduce downtime and drive greater productivity, invest in technology that drives seamless collaboration and flexibility and facilitates real-time access to critical data for better decision-making.
About the Author
With over 30 years of experience in technology, in both client and vendor roles, Debbie Altham offers industry leaders a clear perspective on how to navigate the road towards digital transformation. As an industry senior director, Altham focuses on manufacturing and services industries. With Debbie running point, the team at Sikich can help manufacturers meet their most pressing business technology needs, drawing from a wide portfolio of industry tailored products and services.
