Global manufacturing and supply chains "severely disrupted" by pandemic


Thursday, 13 May, 2021


Global manufacturing and supply chains "severely disrupted" by pandemic

The newly released 2021 State of Manufacturing Report from Fictiv, a digital manufacturing services provider, reveals a US industry that is “already quickly rebounding” with investments in digital transformation aimed at improving speed, resilience and sustainability.

While areas of concern persist, most report that lessons from the pandemic have paved the way for new innovations.

Key takeaways include:

  • Industry leaders believe now is the time to accelerate the pace of change with 95% saying the pandemic has had long-term effects on their business and that same number agreeing that digital transformation is essential to their company’s future success.
  • The pandemic laid bare deep weaknesses in supply chains as 94% of survey respondents report concerns about their current supply chains and 92% say their supply chains act as barriers to new product innovation.
  • As companies move into a post-pandemic era they are looking to futureproof their manufacturing with 62% pursuing a re-shoring strategy, 89% reporting that sustainable manufacturing is a growing priority and 84% having turned to on-demand manufacturing as a solution.
     

“The overriding takeaway from this year’s report is that the pandemic served as a catalyst to turn emerging digital ideas into strategies that are now irrevocably changing supply chains,” said Dave Evans, Fictiv CEO. “Companies moved quickly and decisively to solve short-term problems but recognised that the limitations of their current supply chains required long-term investment and innovation.

“Looking ahead, industry leaders are nearly unanimous in their expectations that those digital investments will help them build faster, greener and more resilient supply chains.”

Conducted with Dimensional Research, the sixth annual manufacturing industry report polled hundreds of senior manufacturing and supply chain decision-makers at companies producing medical device, robotics, automotive, aerospace, and consumer electronics products in the USA.

A number of themes emerged from the report, as highlighted below.

Right-shoring vs reshoring

Among those industries with plans to onshore in 2021, 80% of medical device companies report it is a key strategy, followed by 67% in robotics, 61% in automotive and 45% in consumer electronics.

Workforce training is reported the number one barrier to increasing their US-based manufacturing footprint for 55% of respondents, followed by cost (43%), insufficient capacity (36%) and lack of access to needed technologies compared to global suppliers (31%). Only 10% of survey respondents report they see no barriers to manufacturing in the US.

Supply chain concerns stifle innovation

Externally, respondents reported that slow feedback loops with manufacturing partners as well as difficulty sourcing fast, high-quality options to manufacture low-volume builds are among the top NPI barriers. Internally, 45% report that rigid internal processes hamper their team’s ability to innovate and 97% of companies report that supply chain management consumes a significant amount of employees’ time.

55% report that their existing supply chain presents IT security risks for 55% of respondents and 42% report concerns around IP protection risks.

Workforce challenges

Limited budgets are a key barrier to hiring new innovation talent for 45% of respondents, while 44% report difficulty hiring manufacturing talent with the necessary digital expertise.

Expert guidance around manufacturing feasibility for new product innovations would be of great benefit for 95%.

Power of on-demand manufacturing

Of the 84% of companies using on-demand solutions, 100% reported a benefit from this strategy, and the top three advantages were reported as improved quality (62%), transparency (61%) and speed (60%).

“The pandemic also served as a proving ground for new ideas,” said Jean Olivieri, Fictiv COO. “A super majority of those polled said that their comfort level with work from home influenced their positive attitudes towards flexible manufacturing arrangements.

“With 84% having used on-demand manufacturing solutions over the past year, it’s obvious the industry is becoming less reliant on the ownership of physical spaces and wholly owned processes.”

Image: ©stock.adobe.com/au/Sweet

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