The manufacturing sector accounts for almost 1 in 4 of the world’s employees, according to research by The World Bank.
Having optimised over 500 complex and strategic supplier partnerships, we have direct experience of how manufacturing and logistics companies need ‘Intelligent Suppliers’ to help them innovate to increase product sales, improve production effectiveness and reduce BAU costs. Some of the biggest challenges facing the manufacturing sector in our experience are:
- Regulation and Compliance. The sector is always facing increasing regulation and compliance measures. From health and safety to waste management, it’s a significant burden, as is the tracking of raw materials used during the manufacturing process and a lack of transparency through the supply chain.
- Staff Shortages. Recent studies have indicated that up to 50% of jobs in the sector will remain unfulfilled due to a lack of younger individuals coming into the industry. Significant investment in automation may reduce this deficit, but indications are that the level of investment is not sustainable for many organisations.
- Global Competition. The internet enables competitors to offer their products in a country without the need for any set-up costs or logistics aside from a delivery mechanism. Research indicates that the global competitiveness of manufacturing companies in much of Europe is expected to fall next year.
- Automation. The potential automation of workforce tasks is highlighted as a positive opportunity, believing it empowers workers and allows them to focus on ‘higher-value’ activities. In turn, this leads to an increase in the sales margin of products and helps to drive down BAU costs.
The investment in much more holistic IT systems and production process technologies is seen to help enable organisations, by providing significant increases in both production effectiveness and much greater traction with partner customers and ‘Intelligent Suppliers’.