Manufacturing is evolving faster than ever and the competition is heating up. Are you ready? Each year we compile a list of the top 5 disruptors for the manufacturing industry to help ease the burden.
In Five Manufacturing Disruptors in 2020, you’ll learn about what forces are disrupting manufacturing and how you can rise up to meet the challenges. Here’s a little taste of what you’ll find inside:
1 – Marketplaces will change B2B selling
As consumers, we’re spoiled by the experience of marketplaces in our personal lives. We use one website to reach many sellers through Amazon. We have access to a hyper-personalized experience. We have the power to compare products and prices. We can place orders with a single click. Then we get the goods within 48 hours.
Now buyers are looking for this experience in their B2B purchases. According to findings from B2BecNews, roughly 8 in 10 U.S. B2B buyers used Amazon to research and buy B2B products. And it’s not just Amazon – other marketplaces like Alibaba and TradeIndia, and niche marketplaces, are on the rise.
Insite’s CEO Steve Shaffer says, “Marketplaces actually present a huge opportunity for manufacturers. They force manufacturers to examine how much value they’re deriving from their own data, determine where they can maximize profit and build better customer experiences.”
Our guide to B2B marketplaces will walk you through how to make the most out of the marketplaces disruptor.
2 – Customers want to buy from manufacturers
Technological advances and evolving customer expectations mean now customers want you to make and sell the goods.
This phenomenon is largely driven by millennials. Brooke Yamini, VP of global insights for UPS said, “Millennials show a growing preference for buying directly from manufacturers.” They may lead the charge, but if this option became widely available, buyers of all ages would most definitely take advantage of it.
In our personal lives, we’re used to self-service, and this bleeds into our expectations for B2B buying. Manufacturers have to get up close and personal with their customers using data, and prepare for direct sales if they want to stay on top of the competition. It’s time to say yes to eCommerce.
3 – AI and IoT are the way forward
Manufacturers who embrace cutting-edge technologies powered by AI, IoT, cloud computing and machine learning are more likely to succeed than those who don’t. Be bold and fearless in adding these technologies to your arsenal, or you’ll be left behind.
Technological change in 2020 will happen incrementally, but vitally. Manufacturing is complex, so there are a lot of facets in the industry that will take time to change. But as they revolutionize how we do business – from overhead to workplace safety to how we buy and sell goods – stay open-minded.
By 2025, Statista Research Department projects that we’ll see 75.44 billion connected devices. According to McKinsey & Company, the economic impact of IoT applications within the factory environment will be between $1.2 to $3.7 trillion by the year 2025. In other words, AI and IoT are poised to make big change.
A well-planned strategy to incorporate more AI and IoT will lower costs and increase efficiency, and enhance customer experience.
4 – Skilled labor will be harder to find
Is anybody looking for jobs in manufacturing? Realistically, not many – largely because the unemployment rate has reached a 50-year low at 3.5 percent, according to the U.S. Bureau of Labor Statistics. And college graduates are not as interested in manufacturing. Plus, there are more jobs open in the U.S. than there are people unemployed.
We honestly don’t know why the shortage hits manufacturing hard. Theories range from a skill gap to young workers preferring higher tech, white collar careers. This 2019 Industry Today article does a good job examining this unfortunate trend.
The shortage of skilled labor is problematic. Employees burn out. Retention is difficult. But there are things you can do to put more attractive vacancies in front of new audiences.
5 – Fluid geopolitics is causing uncertainty
We live in uncertain and concerning geopolitical times. From Brexit to China to ever-changing tariffs, so much of this is beyond our control as businesspeople. But we can be ready to adapt.
Post-Brexit trade barriers will become an issue. Chancellor Michael Gove said, “Businesses need to prepare for significant change with inevitable border checks for almost everybody who imports from the EU.” Elsewhere Chinese technology is creating turmoil over the roll-out of 5G, since Chinese company Huawei is the second largest smartphone manufacturer in the world. It’s not getting any less complicated, especially with the new U.S. and China trade deal. Not to mention the Coronavirus outbreak is making a huge impact across many industries, causing even more strain and uncertainty.
Speaking of the U.S., the outcome of the 2020 U.S. election will change geopolitics further in the next four years. All manufacturers can do is prepare to address what comes from geopolitical chaos.
Check out Five Manufacturing Disruptors in 2020 for a deeper dive into each of these trends.