According to Deloitte’s newly issued 2022 Manufacturing Industry Outlook, “The manufacturing industry is building back fast, undeterred by significant labor and supply chain challenges.” Deloitte recommends that manufacturers carefully navigate some of the elevated risks and challenges to keep the momentum moving forward.

Deloitte says, “It’s unusual to see positive economic indicators paired with historical labor and supply chain challenges.” They believe that business agility will be critical for manufacturers to remain competitive. They warn that companies must strengthen their offense, defend against disruption, and keep an eye on ongoing risks in the year ahead.

The Outlook outlines five (5) important trends that they recommend that should be watched closely by manufacturers. Those trends are:

• WORKFORCE SHORTAGE – Preparing for the future of work could be critical to resolving current talent scarcity. “Record numbers of unfilled jobs are likely to limit higher productivity and growth in 2022; we estimated a shortfall of 2.1 million skilled jobs by 2030. To attract and retain talent, manufacturers should pair strategies such as reskilling with a recasting of their employment brand. Shrinking the industry’s public perception gap by doing manufacturing jobs a more desirable entry point could be critical to meeting hiring needs in 2022. Engagement with a wider talent ecosystem of partners to reach diverse, skilled talent pools can help offset the recent wave of retirements and voluntary exits.”

• SUPPLY CHAIN INSTABILITY – Manufacturers are remaking supply chains for advantage beyond the next disruption. “Transportation challenges are likely to continue in 2022, including driver shortages in trucking and congestion at US container ports. As demand outpaces supply, higher costs are more likely to be passed on to customers.” “Root causes for extended US supply chain instability may include overreliance on low inventories, rationalization of suppliers, and hollowing out of domestic capability. Supply chain strategies in 2022 are expected to be multipronged. Digital supply networks and data analytics can be powerful enablers for more flexible, multitiered responses to disruptions.”

• SMART FACTORY INITIATIVES – Acceleration in digital technology could bring operational efficiencies to scale. “Manufacturers looking to capture growth and protect long-term profitability should embrace digital capabilities from corporate functions to the factory floor. Smart factories, including greenfield and brownfield investments for many manufacturers, are viewed as one of the keys to driving competitiveness. More organizations are making progress and seeing results from more connected, reliable, efficient, and predictive processes at the plant.” Given the right mix of vision and execution, emerging and evolving use cases can continue to scale up from isolated in-house technology projects to complete production lines or factories.

• CYBERSECURITY – Rising threats are leading the industry to new levels of preparedness. “Manufacturers should look not only at their cyber defenses but also at the resiliency of their business in the event of a cyberattack. Cybercriminals can cause harm beyond intellectual property theft and financial losses, using malware that now ties in AI and cryptocurrencies. They can also shut down operations and disrupt entire supplier networks, compromising safety and productivity.”

• ESG INVESTMENT – Manufacturers are likely to bring more resources and rigor to advancing sustainability. The fast rise of environmental, social, and governance (ESG) factors is redefining and elevating manufacturing sustainability. “Cost of capital can be tied to ratings on ESG, making it a priority for organizational financial health and competitiveness. Expectations for reporting on diversity, equity, and inclusion metrics in manufacturing will likely continue to rise.”

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