Page 36 - BusinessWest July 25, 2022

Making Change
Manufacturing Industry Anticipates Growth Despite Recent Turbulence
The manufacturing tech industry is building back fast, undeterred by significant labor and supply-chain chal- lenges. To maintain this momentum, manufacturers
should navigate elevated risks while advancing sustainabil-
ity priorities. That’s the takeaway, at any rate, from a recent Deloitte report exploring five manufacturing industry trends that can help organizations turn risks into advantages and cap- ture growth.
It’s unusual to see positive economic indicators paired with his- toric labor and supply-chain challenges. But this is the trajectory for the U.S. manufacturing industry in 2022 emerging from the pandemic. The recovery gained momentum in 2021 on the heels of vaccine rollout and rising demand. As industrial production and capacity utilization surpassed pre-pandemic levels this year, strong increases in new orders for all major subsectors signal growth con- tinuing in 2022.
However, optimism around revenue growth is held in check by caution from ongoing risks. Workforce shortages and supply-chain instability are reducing operational
efficiency and margins. Business
WE TALKING CLASSIC ROCK? WE’RE TALKING ROCK 102!
SPRINGFIELD’S CLASSIC ROCK
agility can be critical for organiza- tions seeking to operate through
the turbulence from an unusually quick economic rebound — and to compete in the next growth period. As leaders look not only to defend against disruption but strengthen their offense, our 2022 manufactur- ing-industry outlook examines five important trends to consider for manufacturing playbooks in the year ahead.
“Shrinking the industry’s public perception gap by making manufacturing jobs a more desirable entry point could be critical to meeting hiring needs in 2022.”
1. Preparing for the future of
work could be critical to resolving current talent scarcity. Record numbers of unfilled jobs are likely to limit higher productivity and growth in 2022, and last year we estimated a shortfall of 2.1 mil- lion skilled jobs by 2030. To attract and retain talent, manufactur- ers should pair strategies such as reskilling with a recasting of their employment brand.
Shrinking the industry’s public perception gap by making manu- facturing jobs a more desirable entry point could be critical to meeting hiring needs in 2022. Engagement with a wider talent eco- system of partners to reach diverse, skilled talent pools can help off- set the recent wave of retirements and voluntary exits.
Manufacturing executives may also need to balance goals for retention, culture, and innovation. As flexible work is taking root in offices, manufacturers should explore ways to add flexibility across their organizations in order to attract and retain workers. Organi- zations that can manage through workforce shortages and a rapid pace of change today can come out ahead.
2. Manufacturers are remaking supply chains for advantage beyond the next disruption. Supply-chain challenges are acute and still unfolding. There’s no mistaking that manufacturers face near- continuous disruptions globally that add costs and test abilities to adapt. Purchasing manager reports continue to reveal systemwide complications from high demand, rising costs of raw materials and freight, and slow deliveries in the U.S.
Transportation challenges are likely to continue in 2022 as well, including driver shortages in trucking and congestion at U.S. con- tainer ports. As demand outpaces sup-
ply, higher costs are more likely to be
passed on to customers.
Trends
Continued on page 45
36 JULY 25, 2022
MANUFACTURING
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