In the next five years, the manufacturing landscape could completely change, according to Deloitte’s 2013 Global Manufacturing Competitiveness Index.
Most of the highest-producing members of the European Union are also expected to drop significantly in their ability to compete with other nations. These include Germany, Britain, France, and Italy. The United States may also fall, unless it takes certain steps to maintain its edge in several areas.
What is driving these changes in the manufacturing industry? Here are several of them:
State-of-the-art technology – The U.S. still leads the world with its technological advances, making manufacturing safer and faster. But the rest of the world is catching up and adopting new practices.
Skilled Workforce – More advanced technology is leading to low-skill jobs being replaced by high-skill ones. Workers with extensive training and/or college degrees in engineering are highly sought-after by manufacturing companies. Unfortunately, these workers are increasingly difficult to find in the U.S.
Material Costs – Companies may not have direct control over market prices for goods and materials, but they can control some things. For example, they can shop around for suppliers offering the best deals and they can optimize their inventories to avoid overstock.
Government policies – Countries like South Korea and Taiwan, which have favorable governmental policies for manufacturing, are outperforming heavily regulated countries like those found in the European Union. Liberty breeds innovation.
Labor Costs – New technology can help manufacturers trim their workforce and be more efficient. High-skilled workers require higher pay, so the technology tradeoff must be a balancing act.
To stay ahead of the game and make sure your business remains competitive in the ever-changing manufacturing industry, you should make sure you’re in control of every part of your operations as you possibly can. That means:
- Using manufacturing inventory software to optimize inventory levels and manufacturing processes.
- Keeping a close eye on costs across the board.
- Running cost-benefit analyses and then updating your software and hardware where appropriate.