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2021 Manufacturing Trends


2020 has finally ended. Few could have anticipated the devastating effects the Covid-19 pandemic had on the manufacturing industry and the global economy as a whole.


As we enter 2021, there is no doubt that 2020 has significantly changed the manufacturing industry. In order for your company to stay ahead of the curve, you must understand these trends and their potential benefits.


Arguably, the four biggest manufacturing trends of 2021 revolve around technology, sourcing, sales and sustainability.


Technology

The utilization of Industry 4.0 technologies will be the biggest manufacturing trend going into 2021. In fact, a 2020 Deloitte report states that ‘76% of manufacturing executives in Deloitte’s postelection poll intend to increase their investments in digital initiatives and plan to pilot and implement more Industry 4.0 technologies.


2021 will see Industry 4.0 technologies such as robotics, IoT, AI, and 5G become more embedded in production and overall business practices. The International Federation of Robotics, for example, estimates 2.7 million industrial robots are currently operating in factories worldwide and this number will only increase in 2021.


On the other hand, IoT will similarly see its use grow. An MPI Group Report on IoT suggests that 31% of production processes already incorporate smart devices and embedded intelligence. Additionally, a further 34% of manufacturers plan to further incorporate IoT tech into their processes.


The use of AI will also help process the vast amounts of data gathered from the different IoT devices to offer greater insight of the entire company, increase efficiency, and even help with forecasting. Lastly, 5G will help facilitate these complicated networks by providing them the proper bandwidth necessary to function.


With these technological changes, manufacturers will also be investing a lot more in their workforces so as to ensure workers have the necessary skills to operate and maintain new technologies.


Sourcing

With 94% of Fortune 1000 companies having their supply chains disrupted in 2020, according to an article by Accenture, manufacturers will seek to create more resilient and adaptable supply chains.


Greater transparency and communication between manufacturers and their suppliers will be essential. In doing so, manufacturers will be able to adapt to sudden changes more easily and rapidly. Technologies such as 5G and machine learning can help with such endeavors.


Diversification can also help create more resilient supply chains by preventing an overreliance on one specific supplier. Many manufacturers suffered as a result of plants and factories in China closing when the pandemic first began , for example, as they only sourced from Chinese suppliers.

As a result, a 2020 Deloitte report reveals that ‘33% of supply chain leaders have either moved some of their operations out of China or plan to move some out in the next two to three years’. If your company is considering diversifying its supply chain or production, a previous article discusses why Southeast Asia may be a great potential destination.


Sales

Regarding sales, the manufacturing industry will continue to focus on creating more personalized customer experiences, with many manufacturers going so far as to shift from B2B to B2C business models.


Instead of selling/shipping goods in bulk, Hitachi Solutions predicts manufacturers will be selling/shipping goods directly to consumers. Doing so can help reduce logistical costs and in turn increase profits while also allowing manufacturers a better understanding of consumer needs.


In addition, going into 2021 manufacturers will seek to make the most of e-Commerce as customers and consumers have only increased their demand for e-commerce goods. For example, according to a 2020 Forbes article, in 2020 USD 710 billion was spent on e-commerce goods, an 18% increase from the previous year.


Sustainability

The World Economic Forum states that prior to the onset of the pandemic, approximately 54% of the world’s energy is consumed by the manufacturing industry and 20% of global emissions also a result of the manufacturing industry.


However, with plant shutdowns and fewer goods transported global emissions saw a significant decline. This decline should serve as a wakeup call for manufacturing companies to reconsider and reorient their environmental sustainability strategy.


This is especially considering the fact that more and more customers are demanding companies take responsibility for their environmental impact, even going so far as to spend more on items produced by environmentally sustainable companies as was discussed in a previous blog article.


Conclusion

Though the pandemic brought with it significant disruptions, it also became an opportunity for the manufacturing industry to innovate and adapt to changing circumstances. The adoption of industry 4.0 technologies, the creation of more resilient supply chains, a more personalized customer experiences, and a more sustainable business model are but a few of the trends going into 2021.

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