Gaps in Tech and Labor are Impacting Global Manufacturers’ Competitiveness

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Most manufacturers don’t have end-to-end supply chain planning solutions, nearly all of these companies need more employees to support their digital transformation efforts and most aren’t using data to make the decisions necessary to outpace their competitors.

These are just some of the eye-opening results of Rockwell Automation, Inc.’s 8th Annual State of Smart Manufacturing Study. The company surveyed more than 1,350 manufacturers in 13 countries to get an updated picture of the global production environment.

Rockwell Automation says this year’s report reveals a focus on delivering profitable growth without sacrificing quality; an emphasis on accessing data’s true potential; and increasing adoption of technology to build resilience, enable agility, increase sustainability and address workforce challenges.

• Twice as many manufacturers believe their organization lacks the technology needed to outpace the competition, as compared to 2022.

• Four out of five manufacturers aren’t using end-to-end supply chain planning solutions.

• Cybersecurity risks rank highest as the obstacle respondents are looking to mitigate with smart manufacturing initiatives.

• 45% of manufacturers cite “improving quality” as the main positive outcome they want to achieve with smart manufacturing initiatives.

• 89% plan to maintain or grow employment due to technology adoption.

• 36% of respondents believe they will be able to repurpose existing workers due to their increasing use of technology.

• Of the 95% of manufacturers who have formal or informal ESG policies in place, 42% cite “improving efficiencies” as the top driving factor for pursuing these initiatives.

“Manufacturers are continuing to seek opportunities for profitable growth but are realizing that uncertainty in workforce availability is impacting quality, along with their ability to meet evolving customer needs,” said Rockwell Automation’s Veena Lakkundi in a press release.

 “The survey found that smart manufacturing technology is enabling manufacturers of all sizes to optimize more resilient, agile and sustainable solutions that accelerate transformation,” Lakkundi continued. “If we’ve learned anything from history, it’s that organizations that invest in innovation, with a bias for action, during times of uncertainty can outpace competitors.”

Quality Improvements Wanted

Jerry Foster, founder and CTO at Plex—a Rockwell Automation company that makes software that connects, automates, tracks and analyzes manufacturing operations—says this year’s survey turned up some surprising facts. Compared to last year, for example, 40% more manufacturers say they lack the ability to use data to make the decisions to outpace the competition. “The report also found that on average, more than 30% of the data being collected goes unused,” Foster says.

Asked which areas manufacturers are making progress in when it comes to technology and automation, Foster says 97% of survey respondents reportedly plan to use smart manufacturing technology in 2022. “Manufacturers cite many areas of technical investment, however improving quality is the greatest need to accelerate digital transformation,” he adds.

Despite being impacted by supply chain disruption in recent years, four out of five manufacturers say they currently lack end-to-end supply chain planning. And 50% of these companies are still using manual tools like spreadsheets to manage their supply chains. “In this sense, supply chain planning is an area where there is great opportunity for investment in technical advancements,” Foster notes.

Delivering for their Customers

The survey also found that 23% of operating budgets are invested in technology, although the spend varies from industry to industry. Highly regulated manufacturers, like aerospace engineering, invest about twice as much in technology (34%) as those in less regulated industries like packaging (18%).

“Some of the lower-invested industries have very slim margins and are looking for ways to cut costs,” Foster points out. “However instead of tightening purse strings, they should consider further investments in smart manufacturing which can help cut costs long term and boost revenue.”

Looking ahead, Foster expects the proliferation of smart manufacturing to continue. “Of the respondents yet to adopt smart manufacturing, 45% of them plan to be using the technology within the next year and another 39% plan for the next one to two years,” he points out. “These organizations know that a failure to adopt smart manufacturing will not only hinder their current competitive advantages, but also dramatically impact their ability to deliver for their customers.”