Manufacturers have seen some exciting changes of late. New technology is being deployed all the time, meaning products are cheaper to make and higher quality. And new innovations in the space in the future look set to radically shake up the market.
But manufacturers still face some big problems, even in 2016. There are concerns over regulation. And there is the perpetual problem of the supply chain. Here are some of the biggest problems manufacturers are facing this year.
The Cost Of Health Care
Manufacturing businesses have always had to worry about costs. The global market is so competitive that any increase in costs can spell disaster. Right now in the US, manufacturers are facing rising healthcare costs for their workers. And this is putting a strain on the gap between revenues and costs.
The solution is better cost management. But given that US manufacturers are already on the bleeding edge, there isn’t all that much room for improvement.
The Supply Chain
Elon Musk was recently asked about why so many Tesla cars arrived on the market later than scheduled. His answer was that his car plant could only move as fast as the slowest supplier. In other words, if one supplier was held up, the production line had to stop.
For something as complicated as a car, there are thousands of suppliers. And that means that the chances of a component being held up are high.
Integrated supply solutions are the likely way forward for manufacturers. Here they pair with a company that specialises in sourcing the inputs needed. In so doing, they make their supply chains more flexible and robust.
We tend to think of manufacturing as a relic of the industrial revolution. But it is actually at the forefront of technology.
That means that it needs to be at the forefront of innovation too. Foxconn recently announced that it was automating an entire factory over in China. This was designed to cut costs, but also allow the company to produce higher quality products.
Thus, companies need to have a steady stream of innovations coming online each year. New ideas pipelines should become like any other process. And they should be implemented as soon as possible.
The Skills Gap
Young people today have been taught to get careers in the knowledge economy. Everybody is getting a degree and clamouring for the same legal or service sector jobs.
That means that manufacturers are facing a sort of skills gap. The baby boomers who once made up the bulk of their workforce are retiring. And a new generation is coming online, few of whom have aspirations in manufacturing.
The solution? Manufacturers need to make connections with colleges and universities. They need to advertise manufacturing as a viable alternative career path. And they need to make it clear that the work itself is both well-paid and enjoyable.
Environmental regulations in some countries are a burden for manufacturers. Rules for keeping the environment clean multiply each year. As a result, manufacturers face increased costs, especially in Europe and North America. These costs should be managed on a quarter-by-quarter basis.