A Real Economy publication

Manufacturing industry outlook: Winter 2023

Dec 13, 2022

Manufacturing industry outlook key takeaways

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Long underrepresented in manufacturing, women are a tremendous potential resource to fill the talent gap in that industry.

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Manufacturers looking to capture more data, provide real-time analytics or deploy more automation on the floor can use 5G connectivity to reach those goals.

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Midsize manufacturers will need to determine whether to delay capital projects and purchases and how automation might be able to help.

Manufacturing Economics

As we begin a new year, there are many opportunities and challenges facing manufacturers. In our latest industry outlook, our senior analysts examine why it’s important for organizations to invest in 5G infrastructure and planning, how manufacturers can continue to navigate inflation, and women’s evolving role in the sector. 

Manufacturing trend #1: Innovation and inflation

Just a year ago, rising inflation seemed to be a transient issue driven by the pandemic. However, the temporary inflation narrative has vanished. Regardless of the size of inflationary increases, which have spanned 7% to 9% throughout 2022, inflation will continue to take a toll on manufacturers through rising costs, labor constraints and supply chain disruption.

To best combat these challenges, manufacturers should focus on innovation and technology. Advanced technologies like IoT, machine learning, artificial intelligence, 5G, digital twins, and augmented and virtual reality will be crucial to improve operations and competitiveness while guarding against rising costs, continued supply chain disruptions, and pervasive workforce shortages.

Manufacturing trend #2: Investing in 5G

For the past two decades Wi-Fi has been the de facto standard for private wireless communications. While new generations have improved overall capacity, speed and latency, challenges persist around Wi-Fi as a shared medium and in the coverage capabilities of each access point.

The improved connectivity enabled by 5G networks is crucial for the industrial sector, especially as tools such as cloud-based data and IoT devices play a bigger role throughout manufacturing operations. Better connectivity throughout operations will enable next-gen Industry 4.0 capabilities, including video analytics, augmented reality, industrial IoT devices, automated guided vehicles or even the ability to relocate traditionally fixed machines for customized or short life-cycle product runs.

Manufacturing trend #3: Women in the workforce

Long underrepresented in manufacturing, women are a tremendous potential resource to fill the talent gap in that industry. The manufacturing sector has been hit hard by the labor shortage, and there’s no sign of that changing.

Closing the gender gap should be a key strategy for manufacturers looking to address the talent shortage and prepare their factories for the future. But successful recruitment and retention of women in manufacturing requires consideration of a number of factors.

RSM contributors

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