business 2022 Manufacturing Industry Update August 15, 2022 Supply chain disruption, labor shortage and more continue to impact the manufacturing industry. What does the remainder of 2022 look like? How are manufacturers coping? We explore here. Supply chain issues- Ongoing supply chain issues continue to have a big impact on manufacturing. Several factors are to blame, including the COVID-19 pandemic, labor shortages and surge in demand for goods. Many businesses trimmed inventories and halted production during the height of the pandemic, but consumer spending was higher than ever, leading to long lead times and inventory shortages. How can manufacturers cope? Automate your supply chain processes- Automation is a key method to increase supply chain efficiency. Order processing is one task that can be really time consuming—automating this process can free up time for product development and other high-priority tasks. Consider implementing supply chain software- Your team will work more efficiently if you implement the right software and technology. Implementing a warehouse management system can help automate order processing and give you an inside look at data reporting, analytics and inventory tracking. Go green across the supply chain- Establishing initiatives to reduce your carbon footprint can help you save time and money. One example is using SIOC (Ships In Own Container) packaging. As the name suggests, this form of product packaging allows a product to ship to a customer in its original packaging, thus reducing excess packaging materials. Rising cyber threats- The pandemic introduced a whole new slew of cyber threats that impact manufacturers. This includes:The shift to remote work- Criminals are looking for insecure home networks and devices. Thus, remote workers have become a prime target for phishing scams via email, text, voice and third-party apps. Remember to remain vigilant when working from home and do not let family members use your work computer, and never use your work computer for personal reasons.5G connected Devices- More 5G networks are being built, and with that comes an increase in the number of connected Internet of Things (IoT) devices. As your digital footprint expands, so too does your cyber risk. Make sure all your connected devices have the right “patches” in place, which are software updates that address security vulnerabilities in a program or product. Environmental, Social and Governance (ESG) Initiatives- More and more companies are implementing ESG initiatives in their supply chains. This includes creating products that are more efficiently made and more durable. By eliminating waste and only adding steps to your production process that add value, you can improve operational efficiency, lower costs, and attract green-minded consumers. Our blog, https://kahnlitwin.com/blogs/business-blog/5-key-benefits-of-esg-initiatives has some great insight on ESG initiatives and how they can benefit businesses. Labor shortage- A recent study shows that 2.1 million manufacturing jobs could go unfilled by 2030. The COVID-19 pandemic introduced many disruptions to the manufacturing industry, as many manufacturing jobs are located indoors in confined spaces with lots of people. This resulted in huge employee turnover, not to mention others having to leave due to childcare necessities, illness, and more. Additionally, in recent decades, technology, globalization and recession erased some lower-level positions, meaning those in the manufacturing industry do not have the skills for today’s jobs (which require knowledge on operating sophisticated machinery). Also, an aging workforce has made the manufacturing industry struggle as well. Experts say it takes months or even years to train a machinist or other skilled laborer, but DECADES to train a new CEO. How can manufacturers cope? With the labor shortage, many manufacturers are turning to machines to supplement human jobs that are going unfilled. One example is robotic arms, which help undertake the monotonous tasks, improve speed and process quality, all while reducing the risk of injury associated with working too closely to heavy machinery. Additionally, many companies have started offering retraining or advancement opportunities to keep employees engaged and motivated, and apprentice programs to attract younger talent. The remainder of 2022 will be a challenge for manufacturers as these setbacks continue, but ongoing technological advancements will present opportunities. We will keep you updated. Questions? Contact us.