These 5 Manufacturing Trends Are No Joke

April 10, 2014
Recent statistics measuring economic performance have put many in the manufacturing sector in a dour frame of mind. Fortunately, however, factory managers aren't sitting idle.

For as many fits and starts as they have suffered over the years, manufacturers can be forgiven for not participating in the annual prankfest known as April’s Fool Day.

Recent results have left some in the sector understandably humorless. For example, while both the U.S. and Canada enjoyed manufacturing growth in March, Canadian input costs rose to their highest levels in nearly three years due to a weaker currency.

Smaller U.S. factories are taking a cautious approach in response to the uncertainty. Only 36% of those polled in the second annual Sage Manufacturing Survey said they expect the economy to improve over the next six months. That’s up from 27% last year at this time, but still a dour result overall.

The good news? Factory managers aren’t sitting idle. According to the Sage survey, 46% of those polled are investing resources to support top priorities. In fact, 53% are aiming to boost sales while 36% are focused on developing markets and improving productivity. Here are five trends to keep in mind as you evaluate projects:

1. Increased reliance on automation and robots. Technology improves with every generation, of course, but the newest promise vastly more automation for concentrating human effort on details and customization. Automated guided vehicles (AGVs) for shuttling loads around the factory floor are a good example, and may be worth investing in if your floor is tasked with regularly moving heavy loads along a predefined path.

2. Reshoring. Growth in the North American sector is largely due to work that had been domiciled in China and other parts of Asia “coming home.” That’s good news, certainly. Consider making investments that allow you to tackle projects in chunks, scaling to meet demand on a conservative pace that doesn’t put the entire business at risk.

3. Rapid prototyping. Similarly, new technology such as 3D printing has changed how easy it can be for a would-be innovator to design a prototype needed to attract outside investment. Cater to this group by setting up a small 3D printing practice. Create performance incentives for workers involved.

4. Smaller orders. Prototyping isn’t the only instance where orders are getting smaller. In fact, there’s at least anecdotal evidence that China’s insistence on high minimum orders pushed some to return to North American factories. Consider investing in tools that allow for efficient production at any scale.

5. Leaner factories. Volatility can cause undue pain on the factory floor. Automation can certainly help, but there also comes a point when human creativity is required to a manufacturing job well. Consider offering workers flexible scheduling for maximizing hours at the busiest times on the factory floor.

And in everything, consider the human element first. Are you investing to improve outcomes? If so, does the line have a stake in the outcome? Do you have a plan to recognize and reward outstanding achievement? The times may be changing, but some business practices remain timeless.

John Mills is executive vice president of Business Development at Rideau Recognition Solutions, a global leader in employee rewards and recognition programs designed to motivate and increase engagement and productivity across the workforce.

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