While numerous economic headwinds pose challenges for manufacturers, custom automation solutions create new opportunities for growth
With increased interest rates, ongoing supply chain disruptions, labor shortages and price increases to contend with, optimism among manufacturing leaders for 2023 has “certainly declined,” as the National Association of Manufacturers (NAM) President and CEO said in a press release announcing the organization’s third quarter Outlook Survey.
“The challenges of inflation, supply chain strains and the workforce shortage are taking a toll,” NAM President and CEO Jay Timmons said.
But the survey also revealed a continued optimistic mindset among manufacturers: “Three out of four respondents still have a positive outlook for their businesses,” Timmons noted in the release.
While manufacturers are likely to experience obstacles throughout 2023, custom automation solutions create new opportunities for growth and profitability – particularly for those fearless enough to act while others sit on the sidelines, and wise enough to bring new products to market and implement factory automation to reduce operating costs.
The Road Ahead: Challenges & Trends
Throughout 2022, U.S. manufacturing “demonstrated continued strength,” according to Deloitte’s 2023 Manufacturing Industry Outlook. However, significant challenges related to staffing, raw materials, inflation, and economic uncertainty continue to loom.
Here’s a look at the most common challenges manufacturers identified:
- 78.3% of manufacturing leaders surveyed cited supply chain disruption as a primary business challenge and 80% of executives experienced a heavy or very heavy supply chain disruption over the past 12-18 months
- 76.1% reported struggling to retain a quality workforce and raw material costs
- 65.9% saw increased transportation and logistics costs
- 72% of surveyed executives say the “persistent shortage of critical materials and the ongoing supply chain disruptions present the biggest uncertainty for the [manufacturing] industry”
How to Navigate Manufacturing Uncertainty in 2023
Maintaining momentum in manufacturing, protecting long-term profitability, and expanding capabilities while retaining a skilled workforce will be serious concerns for manufacturing executives in 2023.
Many will turn to automation. Digital investments will continue to grow as automation and artificial intelligence (AI) bring increased speed, productivity, and consistency. According to IBM research, the integration of artificial intelligence (AI) in commerce and manufacturing will increase from 40% to 80% within 3 years and 62% of Deloitte’s survey respondents plan to implement robotics and automation in 2023 – hallmarks of what some are calling Industry 4.0.
Onshoring manufacturing and outsourcing specialized manufacturing to partners will also provide opportunities for ongoing profitability and growth despite the obstacles.
According to Deloitte, 62% of surveyed manufacturers investing in growth initiatives for 2023 will outsource work to a partner with custom automation capabilities. These methods for building resiliency will help to alleviate the negative effects of overseas supply chain issues and production capabilities related to staffing shortages.
Partnering with Owens Design for Design & Manufacturing
Outsourcing to an experienced, custom automation solution provider allows you to focus on what you do best, reduces your lead time and risk, and provides highly skilled and experienced resources. At Owen’s Design, you have access to a team of engineers that average ten years of experience and 45 custom automation projects.
“The need for automation is only increasing, and now is the time to invest in manufacturing technology that will increase your competitive advantage and differentiation for the coming years,” said Bob Fung, CEO of Owen’s Design. “Forward-thinking investing during a downturn can bring large returns when the economy improves and volume increases. Outsourcing custom automation design and manufacturing allows you to capture this opportunity with reduced lead times using expert, variable resources that can be turned on and off as needed. Additionally, OEMs can bring new products to market in record time with the right custom automation partner.”
Fung adds, “Those that don’t invest in automation in downturns can find themselves perpetually behind market opportunities.”
Our team of automation experts can extend your engineering team with design, production-ready prototyping, and manufacturing of complex technologies. Contact us to learn how we can help you meet your challenges in 2023.