Manufacturing industry trends and issues

Industry-specific, integrated services and insights for industrial manufacturing companies

RSM understands the ongoing issues that manufacturing executives must address. From innovation to expansion, and cyberthreats and profitability challenges, pressures on manufacturers come from all directions. They also affect all segments of the industry—automotive, energy, chemicals, general manufacturing, distribution and more. How chief executive officers and chief financial officers are responding to issues will shape their companies’ fortunes and, collectively, the shape of U.S. manufacturing.

In domestic and global markets, the challenges can be especially daunting for middle market manufacturers. Internal resources may not have enough familiarity with some issues that are critical to the needs of the company. But a closer look at these key issues and trends can often be the bridge that changes those challenges into opportunities.

Manufacturing Insights

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  • Revenue growth and profitability: Top-line revenue growth and profitability are a challenge. In response, manufacturers are seeking to differentiate themselves through value-added products and tailored customer experiences, which affect both products and services, and streamlined and more efficient supply chains that can deliver products to market faster than the competition. Manufacturers are also controlling their materials and labor expenses, and squeezing inefficiencies out of their supply chains.
  • Global expansion: As part of their growth strategies, many middle market manufacturers are evaluating how to play in the international marketplace. They are entering new markets and also sourcing their production and raw materials abroad. In doing so, they face the challenges of international taxation, business culture assimilation, economies that are slowing or shrinking, and regulatory issues.
  • Risk management: Managing internal and external risks—including issues such as currencies, commodities, regulations, cybersecurity, business cycles and global political disruptions—is becoming increasingly difficult. Some are effectively hedging key materials to mitigate the risk of price fluctuations; others invest in robotics and automate production in response to the risk of rising labor costs.
  • Digital transformation: Effective technology enables companies to capture insights that can improve the customer experience (e.g., ordering, configuring and shipping), reduce costs, and automate processes and product development. By driving innovation and market responsiveness, technology can help companies differentiate themselves to attract and retain customers. And technology can continue to improve the efficiency of the production process to maintain or grow margins.
  • Workforce: To keep up with the advancement and integration of technology, manufacturers need to attract a skilled workforce. Today’s high unemployment rate is enabling workers to move around to find the most appealing wage and benefit packages. And fewer young people look at manufacturing as a viable career direction. The lack of skilled workers limits growth and profitability.