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The manufacturing industry in the United States is a critical part of the nation’s economy. This industry is important due to job creation, increasing innovation, and exports. Despite this importance, manufacturers face complex issues, including skilled labor shortages, supply chain issues, technological advancements, new regulations, and changing global conditions.
Talent Shortages and Workforce Development
Manufacturers continue to face skilled labor shortages. Some predict that within the next decade, U.S. manufacturers could require nearly 4 million new team members but struggle to fill those positions due to an expanding talent gap. This is based on the number of baby boomers retiring and a shortage of individuals entering the industry.
Manufacturers will need to address this skills gap, likely with a multi-pronged approach. The first step will be to analyze current team members’ skills. Next, manufacturers must provide training to their team to continuously develop and upskill them. The development of higher-level skills will continue to be necessary. This includes technical, digital, and soft skills. Simultaneously, it will be imperative to implement new recruitment strategies that attract highly skilled team members.
Manufacturers should consider collaborating with high schools, local trade schools, and community colleges on curriculum options as well as internship and apprenticeship programs. This is an outstanding way to develop the talent channel but can also support current team members. For instance, offering current team members training in advanced manufacturing and Industry 4.0 technologies including automation, robotic and digital skills, as well as soft skills like leadership and management training can better prepare the workforce to contribute at a high level. Further, this can not only provide the company with a higher-skilled labor force but can also create a sense of loyalty and pride amongst team members who benefit from the company’s investment in them.
Manufacturers can also benefit from federal and state tax credits and incentives for training and hiring programs. One example is the Work Opportunity Tax Credit (WOTC), which incentivizes employers to hire and employ individuals from certain targeted groups.
For manufacturers looking for assistance, HBK can help. For instance, HBK can help with the federal and state tax credit and incentive programs. In addition, HBK has resources to help explore the competitiveness of a manufacturer’s compensation and benefits package to attract top talent. Another HBK company, HBK High Performance, can implement training in leadership and management to help your team members who could benefit from that training.
Supply Chain Issues
Supply chains will continue to remain complex throughout 2025. Material shortages, increased shipping costs, and geopolitical tensions are expected to persist into 2025. Supply chain disruptions that troubled many businesses during the COVID-19 pandemic have lessened but are still seen. Relying on just-in-time inventory strategies or certain foreign suppliers can cause considerable risk, as a single disruption can cease production and lower related revenue. That, coupled with the potential of looming tariffs, will continue to affect the supply chain. Also, the talent gap in the United States is not unique to the United States. Many other countries are experiencing the same issue, which can cause further delays and complications.
Manufacturers have been rethinking strategies related to their supply chain. Shipping delays related to the Longshoremen’s strike and labor shortages in the trucking industry will continue to plague the supply chain. Near-shoring and reshoring are items to options that may lessen the impact of some of these issues.
Technologies like artificial Intelligence, automation, robotics, and digital tools are becoming increasingly important to predict, analyze, and manage these challenges. This allows manufacturers to streamline their supply chain operations in real-time. Certain ERP systems can incorporate these technologies or provide other data to support inventory management and supply chain initiatives. Vertilocity, an HBK sister company, can help manufacturers with their ERP system and data analysis tools that can help you with these issues. HBK Manufacturing Solutions can also support forecasting and analysis needs.
Technological Advancements
There are many areas in which technology will affect manufacturing. Smart manufacturing, cybersecurity, the Internet of Things (IOT), and others will continue to be important to the manufacturing industry.
While technology will continue to play a critical role, it is not a magic bullet; instead, technology should be viewed as one of the critical tools necessary for transformation and growth. Manufacturers who embrace technology solutions will be better equipped to stay ahead of their competition.
However, as mentioned, technology alone will not solve the issues that manufacturers face. The human component continues to be important. Upskilling employees to better work with technology along with establishing a continuous improvement culture will determine how well manufacturers can thrive and meet the requirements of the future. Emphasizing the human element in leveraging technology and the strengths of the organization will help create opportunities for the team. The confluence of innovative technologies, skilled labor, and a forward-thinking strategy is what will allow manufacturers to flourish in 2025 and beyond. Those who can harness these elements effectively will be the ones leading the next phase of the manufacturing revolution.
As mentioned, Vertilocity can help with technology implementation including breaking down data silos, adopting cybersecurity processes, and implementing ERP software. Deploying the most recent innovative technologies is not always as effective as implementing high value pieces that align with your business strategy. This strategy will come from integrated programs that work together rather than single-point solutions.
New Regulations and Changing Global Conditions
The regulatory standards for manufacturers are constantly changing. Adhering to anticipated changes to tax laws, tariffs, and trade policies is becoming complex. Regulations are rapidly evolving. One must look no further than the recent changes with the Corporate Transparency Act to see this. Complying with regulatory requirements is a challenge for small to mid-sized manufacturers that do not have internal compliance teams.
The President-elect has discussed new global trade policies. Other countries have seen governmental changeover in the past year. Countries around the world are experiencing leadership changes and restructuring. The current U.S.-China trade frictions could intensify as a result of the proposed tariffs by the new administration. This would increase the cost of materials for manufacturers. As a result, some manufacturers both domestic and abroad are ordering supplies and materials currently to avoid possible price hikes later.
Conclusion
Manufacturers will face challenges in 2025 and beyond. Addressing work force development, supply chain resilience, innovative technologies and forward-thinking strategies will certainly help manufacturers to succeed. Manufacturers who address these elements effectively and efficiently will be the ones leading the next phase of the manufacturing revolution, or Industry 4.0. With our experienced insights and innovative strategies, HBK Manufacturing Solutions can assist manufacturers to overcome challenges and become the manufacturer of the future. To contact a member of HBK Manufacturing Solutions or one of the companies noted, please contact us at 330-758-8613 or manufacturing@hbkcpa.com.
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