In the fast-paced world of manufacturing, staying up-to-date with industry developments is essential. Just like fashion brands will fall out of favour if they don’t keep up with the latest trends, you need to be fully aware of where your industry is heading if you’re to continue to innovate.
The Annual Manufacturing Report 2017 is one publication that should be on your radar, as it provides an insight into current attitudes to key trends within the manufacturing industry.
Standing at a mighty 44 pages in length, you may not have time to read the full report from cover to cover.
To help, I’ve done the hard work for you. In this blog post, I discuss the report’s key findings, covering the opportunities and threats facing manufacturers.
Increased investment in Industry 4.0
Industry 4.0 is the hot topic on every manufacturer’s lips, and a regular point of discussion on our blog. It seems we’re finally realising the importance of Industry 4.0, with two-thirds of survey respondents now aware of it. 23% were already moving towards Industry 4.0, while 62% had plans to do so.
Over the past 12 months, survey respondents spent £106,000 on average on their connectivity investments. 68% said that this level of spending would continue or increase over the next 12 months. However, what’s interesting to note is that 64% of manufacturers cited high initial development costs as their key concern about Industry 4.0.
Despite this, the survey found that manufacturers who have invested in connectivity will generate an additional £775,000 over the next 12 months. Taking the £106,000 initial spend as a benchmark figure, this would deliver a 631% return on investment — an impressive figure by any standards.
Of course, while these figures are based on averages and so will vary on a case-by-case basis, it’s clear that Industry 4.0 is worthwhile investment for manufacturers.
For a real-world example of Industry 4.0 in action, look no further than a recent IoT project with Arlington Automotive. The project won the 2017 Software Innovation Solution of the Year Award at the European IT & Software Excellence Awards.
The next generation of manufacturers
As we've discussed in our Future Supply Chain post, just 38% of manufacturers already have the competencies their supply chain needs within their existing workforce. As such, recruitment and talent development is high on every manufacturer’s list of priorities.
The Annual Manufacturing Report 2017 details the factors manufacturers believe will make a career in manufacturing more appealing, especially to the younger generation. Of these, almost 40% of respondents believed that less negative reporting of manufacturing would help, while 20% cited greater access to manufacturing for young people through work experience as an important factor.
This opens up an area of opportunity for manufacturers. While changing perceptions is a slow process and negative coverage will still exist, you can play your part in inspiring the next generation of manufacturers through positive brand promotion and actively engaging with the local community.
Emphasis on intelligent IT systems
Manufacturing is becoming increasingly dependent on technology. The report found that over the past 12 months, 71% of manufacturers had spent more on their IT systems than they had done in the previous year.
ERP software was the most significant investment made by those surveyed, with 42% investing. In addition, 38% planned to invest in ERP software within the next 12 months, with an additional 38% aiming to implement specialist software.
With many manufacturers actively engaging with IT infrastructures, what about those who are less keen on implementing new IT systems? What exactly is holding them back? The greatest proportion of respondents named the following as the top three barriers to ICT implementation within organisations:
- Lack of the skills required to implement and maintain ICT solutions.
- Lack of confidence/understanding in the potential return on investment.
- Rapid pace at which technology becomes obsolete.
Although these are indeed barriers, it’s pleasing to see that they can be addressed fairly simply. For example, the lack of skills barrier can be directly remedied by encouraging the next generation of manufacturers and harnessing the skillset they possess, as we’ve already discussed.
A greater level of research and understanding of prospective IT solutions can combat the second most-cited barrier, while the third can be eradicated by choosing a solution that is flexible enough to react to technological developments and business expansion.
Staff retention tactics
As we’ve already discussed, one difficulty manufacturers are facing is plugging the talent gap. If the answer lies in millennials, what plans does your organisation have to retain this ever-mobile demographic?
When examining training and skills, 38% of respondents said that less than a quarter of their workforce receives formal accredited training and development annually. In fact, just 18% said that three quarters or more had done so.
However, despite the current training landscape within many organisations, introducing further training and development opportunities was the main method taken by manufacturers to overcome retention and recruitment difficulties (64%). Clearly, manufacturers are aware they need to do more in order to retain their staff and are working towards eliminating this issue.
From embracing Industry 4.0 and new IT systems to working towards plugging the skills gap, on the whole, the Annual Manufacturing Report 2017 was largely positive and delivered plenty of food for thought for manufacturers.
Thinking of investing in ERP software but need to know more? Our team can help — contact us today.