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5 Manufacturing Trends Shaping The Industry

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Chapter 1

Introduction

Manufacturing is a dynamic and essential industry that influences nearly every aspect of our daily lives. Whether it’s the train that takes you to work, the packaging around your lunch, or the wires powering the lights in your home, each item, material, and solution has been engineered and brought to life by manufacturers.

The recent 2024 manufacturing trends have been defined by a combination of challenges and opportunities, spurred by economic uncertainty, technological advancements, and shifting market dynamics. Despite these headwinds, global expansion, diversification, and a push for more innovative and efficient solutions are unlocking new opportunities for businesses in the sector. This article delves into the latest manufacturing trends and their potential impact on the future of the industry.

Chapter 1

Artificial Intelligence (AI)

Artificial intelligence (AI) continues to drive innovation across industries, and manufacturing is no exception. The excitement around AI's potential remains strong, with recent data showing that 88% of manufacturers have already integrated AI into their supply chain and production operations.

As cutting-edge AI technologies become more accessible, businesses are increasingly eager to leverage AI to enhance efficiency, optimise operations, and reduce costs. AI is widely seen as critical to success—87% of companies consider AI implementation crucial for staying competitive in the industry.

Manufacturers, in particular, are reaping the benefits of AI across various areas, including supply chain optimisation, product design, production accuracy, and predictive maintenance. Additionally, 78% of industry leaders believe that AI will help address labour shortages by reducing the need for additional hires over the next two years.

But that’s not all!

AI is also transforming procurement processes. By streamlining procurement cycles, manufacturers can boost productivity, improve efficiency, and accelerate product launches. Improved operational efficiency not only saves time but also fosters greater collaboration and innovation. Digital manufacturing plays a significant role in this transformation—technology helps reduce the number of steps needed to complete tasks, allowing businesses to optimise resources and focus on refining and developing innovative products.

Chapter 1

Talent acquisition

The manufacturing supply chain has been hit hard by a severe shortage of skilled labor in recent years, a trend expected to persist in the years to come. Hiring and retaining a skilled workforce has long been a challenge for UK manufacturers, but this challenge is directly tied to other manufacturing trends, like the rapid pace of digitisation.

Over the past 12 months, the conversation in the sector has begun to shift. An ageing workforce, combined with the rapid retirement of experienced workers is creating gaps faster than they can be filled. Additionally, many skilled professionals are seeking more stable employment with higher incomes outside of the manufacturing industry.

This leaves manufacturers struggling to attract younger generations with the technical expertise needed to manage the advanced technologies integral to modern operations. While the demand for physical labour is expected to decrease over the next decade, the demand for technical skills is projected to soar by up to 50%. Research from EY revealed that 81% of organisations are already facing a critical shortage of tech talent due to the industry's growing reliance on automation and advanced digital systems.

To address this, manufacturers will need to develop innovative ways to attract, train, and retain a new generation of workers capable of navigating these technological advancements. Reskilling and upskilling current employees to meet the demands of digitisation will be equally important for staying competitive in the future.

manufacturers-in-front-of-computer-looking-at-3d-modelling
Chapter 1

Sustainability

As manufacturing trends shift toward sustainability, the sector is facing new challenges and opportunities. With the push for net-zero emissions and decarbonisation, the entire manufacturing supply chain is being scrutinised for ways to reduce its environmental footprint.

As consumer and governmental pressure builds, companies are being pushed to offset their emissions and become carbon-neutral. Many are turning to smart technologies and innovative solutions to achieve these ambitious goals, and manufacturers are poised to play a pivotal role in this transformation.

Manufacturers are not only expected to develop new technologies that will help businesses in other industries reduce their carbon footprints but must also focus on reducing their own environmental impact. For example, the integration of energy-efficient equipment, renewable energy sources, and circular economy principles into production processes is increasingly becoming a priority.

More companies are also adopting sustainable practices in their supply chains, from sourcing raw materials responsibly to minimising waste in the production process. By embracing sustainability, manufacturers can reduce costs, increase operational efficiency, and future-proof their businesses against impending regulatory changes.

Making real difference doesn’t require a big bang. It requires a cultural focus on small wins with big impact - a culture embedded across your entire value chain.

Tom Van Herzele
EY Belgium Supply Chain & Operations Partner
Chapter 1

Supply chain challenges

Navigating evolving and challenging supply chains has been a major focus for industries worldwide since the onset of the pandemic, and manufacturing is no exception. Geopolitical tensions such as Brexit, the war in Ukraine, and recent conflicts in Israel have severely disrupted shipping routes and trade relationships. As a result, manufacturers have been forced to restructure their supply chains to build resilience and mitigate risk.

For example, the war in Ukraine has disrupted the supply of essential raw materials like steel, aluminium, and energy resources, while Brexit has introduced new customs regulations and border checks, significantly slowing down trade between the UK and Europe.

Although there are signs of stabilisation, significant challenges persist. According to Deloitte, manufacturers have seen gradual improvements in delivery times over the past year. Lead times which peaked at 100 days in July 2022, improved to 87 days by August 2023. However, these times are still considerably longer than the pre-pandemic norm!

As the sector continues to navigate post-pandemic recovery, record investments and technological advancements are expected to play a pivotal role in driving efficiency, resilience, and innovation across supply chains. By adopting digital supply chain solutions, manufacturers can improve visibility, anticipate disruptions, and enhance operational efficiency, ensuring that they are better equipped to meet the challenges of a complex global market.

Chapter 1

Smart factories

The concept of smart factories is revolutionising the manufacturing sector by integrating advanced technologies to create more efficient, flexible, and data-driven production environments. As manufacturers strive to adapt to evolving demands and enhance their operational capabilities, the rise of smart factories is becoming a critical trend in the industry.

According to research from Deloitte, 83% of manufacturers believe that the adoption of smart factories will play a transformative role in the way products are manufactured over the next five years. This recent surge in adoption is not surprising. Economic uncertainty, restrictive labour markets, rising costs, and heightened risks have prompted manufacturers to seek innovative ways to improve efficiency and strengthen resilience across their operations. Smart factories represent a promising solution to these challenges.

By embracing smart manufacturing trends, companies can improve efficiency, strengthen resilience, and stay ahead of the competition in an increasingly complex and demanding market.

Manufacturing in 2024 is at the forefront of a technological and operational transformation. Trends such as AI integration, sustainability, workforce challenges, supply chain resilience, and the emergence of smart factories are reshaping the industry. As manufacturers continue to navigate the evolving landscape, embracing these manufacturing trends will be essential to unlocking new opportunities, enhancing the manufacturing supply chain, and driving future success.

Chapter 1

How can we help?

The manufacturing sector has encountered significant turbulence recently, grappling with challenges in globalisation, supply chain operations, finances, workforce shortages, and project output. To navigate these complexities, forward-thinking manufacturers are embracing integrated technologies that enhance not only their factories and warehouses but also their back-office operations.

Creditsafe offers a comprehensive end-to-end compliance platform for KYC, AML, Screening, and Monitoring—all within a single solution. By delivering extensive business data and insights, Creditsafe enables manufacturers to fortify their supply chains, protect their financial stability, and make informed strategic decisions. With real-time access to global credit reports, monitoring services, and risk management tools, manufacturers can easily evaluate supplier reliability, mitigate risks, and maintain stable operations across borders.

Whether you're looking to improve cash flow visibility, support supplier due diligence, or stay compliant with industry regulations, Creditsafe solutions empower your business to excel in a rapidly evolving landscape.

Get your free KYC Protect trial today!