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10 Manufacturing Pain Points for 2023

Posted by IndustrySelect on Wednesday, January 18, 2023

Manufacturing Pain Points to Know in 2023

9 MIN. READ

There’s no doubt about it. The U.S. manufacturing sector has faced and overcome huge challenges over the past few years. While you admire their resourcefulness, you want to help your manufacturing partners succeed.

With the beginning of a new year, you may wonder if the pain points in the manufacturing industry have retreated or at least diminished. Unfortunately, American industrial companies still have more than enough headaches ahead.

Address these ten major manufacturing pain points for 2023 through your website, emails, meetings and other touchpoints. These simple steps can help you cement your relationship with your current clients and find new clients most in need of your products and services.

Top 10 Manufacturing Pain Points in 2023

1. Interest rates

As the Federal Reserve fights to keep inflation down, the result is rising interest rates. This change will affect not only your company’s ability to purchase materials but also your customers’ ability to purchase your product. For your prospects in manufacturing, look at putting together as favorable a financing deal as you can. You may also offer options such as leasing.

If you provide financial services, you may find heightened demand in the U.S. manufacturing sector. Now's the time to reach out to CFO's and business owners in industries most affected by high prices. Additionally, you can help you clients by referring them to an industrial marketplace like IndustryNet, where they can source and quote multiple companies for the best price.

2. The Labor Market

While the chilling effects of COVID are reduced, if your company employs machinists, you know how hard it still is to find skilled workers. Job openings in manufacturing are at historic levels. Many master craftsmen chose to retire or are considering doing so. When you’re competing with behemoths like Amazon, even finding warehouse workers can be a struggle. If you can’t make and adequately store your product, you can’t sell it. Consult with HR to strategize the deployment of limited personnel to produce sufficient merchandise. Then concentrate on selling what’s easiest to turn out.

Additionally, if your company provides staffing, training or workforce development services, now is the time to take a proactive approach and reach out to manufacturing companies in need of labor solutions. IndustrySelect can help you reach the decision makers most relevant to your type of business. Types of executive decision makers in IndustrySelect's database of nearly 400,000 manufacturers, include those in Human Resources, Health & Safety, Research & Development and more,

Further reading: How Staffing Agencies Can Find More Clients in Manufacturing

3. Supply Chain Disruptions

Although supply chain disruptions have largely eased as we move into 2023, challenge remains.

Decades ago, many manufacturers decided to outsource parts and electronics manufacturing. At the time, Asia could make small parts more cheaply than American manufacturers. Poor quality control and raising wages overseas have since made outsourcing less inviting. Increased shipping times also make it hard for manufacturers to plan accurate production schedules. And, of course, COVID was the ultimate icing on the supply chain disruption cake.

If you’d hoped that as concern for COVID recedes, supply chains would lose their kinks, you’re in for a disappointment. The pandemic was not the only event disrupting the flow of raw materials and components. Other disrupters remain evident:

• The U.S./China trade war
• Natural disasters, including severe flooding, hurricanes, and droughts
• Logistics complications, such as national railway strikes

So how are sales and marketing professionals to navigate the bumpy road ahead?

First, if you are in manufacturing, keep fully abreast of any hitches with your company’s production. If you’re not seeing products coming off the line, you’ll know better than to make promises you can’t keep. However, if the merchandise is warehoused and ready to be shipped, ensure that you and your team press for every deal you can make. Slowdowns may occur at any time.

The Reshoring Initiative offers resources to manufacturers who want to bring their work home to America. A shorter supply chain carries less risk of disruption. If your company provides products and services that are in short supply, now is the time to reach out to more manufacturers. See IndustrySelect's intent data resources to discover what products and services are trending right now.

If you are not in manufacturing, but sell to manufacturers, familiarizing yourself with manufacturing terminology can help you speak your client's language. See this informative glossary of 80 manufacturing-related terms and definitions.

4. Materials Shortage

Manufacturing pain points like supply chain disruptions lead to materials shortages for many small- to medium-sized manufacturers. Although the severe shortages of 2021-2022 have begun to ease, shortages are still an issue for many industrial companies. Even though it is not "lean," manufacturers should consider strategic stockpiles of vital parts. Just-in-time ordering frees up warehouse space. However, it can also leave your manufacturers without the parts they need when they need them.

Help your companies take a close look at the parts that keep their production lines humming. It is worth the cost of extra storage space to keep major parts on hand. If your company provides products and services that are in short supply, now is the time to reach out to more manufacturers. See IndustrySelect's intent data resources to discover what products and services are trending right now.

5. Automation Challenges

Industry 4.0 promised to ease some manufacturing pain points. Unfortunately, the research and investments required have turned into issues in and of themselves. Manufacturers still don't have a full picture of what smart automation actually does, with the industry adopting solutions without a unified vision.

On the plus side, factory and warehouse automation do ease the labor shortage. Wireless networks make some of this automation possible. RFID chips track parts throughout the warehouse until the finished product ships. Wireless also gives floor managers a clear overview of every production point.

So, small- to medium-sized companies can see the benefits of automation but aren't yet positioned to take full advantage of them. If your company provides automation solutions, now is the time to step up your prescriptive selling efforts and hone in on sutomation solutions for your clients.

6. You Against the World

In manufacturing, you increasingly face the challenges of globalization. While the U.S. was once on top of the manufacturing sector, its output has fallen from 29% to 18% since the 1980s. China moved in to fill the gap, but it is not alone. The Internet made searching the globe for desired merchandise a matter of keystrokes on a computer or taps on a phone. More and more countries are selling equipment at lower prices than U.S. manufacturers can offer.

This is the time to concentrate your pitch on your company’s ability to monitor and guarantee the quality of its goods. While anything can happen in an overseas factory, your inspectors will be on top of the fabrication at every production stage. Many U.S. companies still want to buy American-made goods if they can afford them. Do your best to come up with a way that they can.

7. Backlog of Orders

The backlog for manufactured goods continued to rise in the latter half of 2022 as manufacturers struggled to keep up with a high-demand environment coupled with labor shortages and supply chain disruptions. Nationally, the backlog for manufactured goods now stands at $1.1 trillion.

It’s always better to have extra work rather than no work. As high as it is, the current backlog might overwhelm smaller manufacturers. Without a change to their business model, they may not be able to keep pace with the demand for their goods.

8. Regulations

One of the most exhausting manufacturing pain points is regulations. Manufacturers face strict regulations about plant operations, and most of them (a shocking 297,696 restrictions) come from the federal government.

Some of the regulations protect the safety of our nation’s food and drug supply. Others, such as the Buy American Act, boost America’s economy by relying on U.S. manufacturers as much as possible.

However, many regulations simply make it more difficult for manufacturers to operate efficiently. The National Association of Manufacturers estimates that federal regulations alone cost manufacturers $19,564 per employee every year.

It's important that manufacturers stay in compliance with any regulations that govern their business in order to save where possible. Turn their attention to compliance solutions and encourage them to conduct audits to resolve any potential non-compliance issues in the future.

9. Sustainability

As consumers grow more aware of their own carbon footprints, they expect a small carbon footprint from the products they buy. Manufacturing is one of the largest causes of environmental pollution. From toxic emissions to dangerous chemicals, manufacturing can be a hazard to the community.

While changing to a more sustainable business model may not be cheap, manufacturers should know that 76% of millennials surveyed are very concerned about environmental issues. They are also happy to pay higher prices for products from sustainable manufacturing plants.

Switching your manufacturing clients to wind or solar may not be feasible or practical. However, as their partner, you could give them some tips and small steps towards a more sustainable model.

10. Cyberattacks

Industries have been experiencing more attacks through operational technology (OT) and the Internet of Things (IoT). While manufacturing relies on these networks to automate production, businesses often have few safeguards in place to protect them from sabotage. Investigate the effectiveness of your company’s cybersecurity before a hacker leaves you holding an empty bag.

If your company provides IT services, consider an email outreach campaign educating manufacturers on this growing threat and on the services you have to offer.

Finding Manufacturers With IndustrySelect

Keep IndustrySelect on hand as your partner as well. With detailed profiles of nearly 400,000 U.S. manufacturers and one million executive contacts, IndustrySelect can help you connect with the manufacturing companies in need of your products and services. Click here to try out a free demo, loaded with a few hundred sample profiles.

Editor's Note: This post was originally published in September 2021. It has been updated to reflect new manufacturing pain points and approaches to take in 2023.

 

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