This article is based on a recent conversation I had with leading manufacturers in the Midwest during a roundtable discussion.
As we’re now in the midst of ‘Spooky Season,’ it only seems fitting to share some scary challenges facing the manufacturing and distribution community. This article features three challenges and discusses how other leaders in the industry are facing them.
Robots are Taking Over
Challenge: The labor shortage exacerbated by the COVID-19 pandemic continues to burden the manufacturing and distribution industry.
Trend: Leaders in the manufacturing and distribution industry are struggling to find and maintain a robust workforce, causing their organizations’ efficiency and growth to suffer. To fill this labor gap, many are moving toward robotic automation to staff manual or tedious jobs. Further, this supports businesses’ employee retention, as existing workers have greater opportunities for elevated roles managing the robotics’ production and other strategic initiatives.
The installation of robotic automation can yield downtime that should be considered. Production lines requiring more elaborate automation can be shut down through the entirety of the installation, causing a temporary halt in production that needs to be accounted for. Incorporating more machinery can be costly, but over time, can likely offset the expense of reduced efficiency and wasted materials. In many cases, robotic automation has even increased output by continuing to operate overnight with limited to no supervision.
The Curse of Overpriced Inventories
Challenge: As a plethora of pandemic-induced shortages continue to stick around, the price of materials continues to rise for many manufacturers.
Trend: Many in the manufacturing and distribution industry are experiencing a demand that they are unable to meet, as they cannot obtain enough necessary materials to produce the inventory. This is causing leaders to order any materials they can get in bulk in an attempt to keep production moving and customers happy. Prices of many raw materials have become inflated, and therefore, price increases are passed to customers, who are willing to pay them in this current environment. There is fear that in the future, the current level of demand will decrease along with the cost of materials, creating an abundance of overpriced inventory that will not sell or take significantly more time to sell as customers work through historically high levels of inventory. Therefore, it’s important companies stay in regular contact with customers and suppliers to understand future demand when placing material orders.
Challenge: Cyber attacks are increasing, and additional risks can be introduced as employees continue to work remotely.
Trend: Have you ever had a conversation and later hopped online only to see an advertisement relating directly to that conversation? This is a phenomenon that many have experienced causing them to believe listening smart devices are behind it. While companies deny this is the case, hackers have found ways to access these devices in an attempt to gain information they can benefit from. These and other cyber attacks, including phishing emails, have increased as hackers are aware that some employees continue to work from home. With this understanding, companies are preparing employees for these attacks through training and education. They are also requiring that remote employees sign into VPN when they are offsite, using forms of dual authentication.