Navigating the Storm: Challenges Facing Manufacturers in 2024

As manufacturing constantly evolves, so are the challenges that business owners face every day. Some of these challenges can be financial, but other challenges can be based on external factors, strategic decisions, or internal issues that are specific to the individual business. However, in all cases, advanced planning can help manufacturing business owners be prepared for the circumstances that they face. The following challenges are some of the most prevalent within small and medium-sized manufacturers:  

• Talent Shortages and Skill Gaps
  In the past several years, labor availability has become a significant challenge for manufacturers. These businesses are challenged by an aging workforce, a shortage of skilled labor, and in some cases, the perception that manufacturing is dark, dirty, and dangerous – which oftentimes, is not true. Manufacturers are tasked with attracting and retaining younger, tech-savvy workers, many of whom have little to no experience. To do this, many companies are investing in training programs, collaborating with educational institutions, revisiting compensation and benefits programs, and adopting innovative recruiting strategies.  

• Understanding and integrating Industry 4.0 technologies
  One reason that manufacturing constantly evolves is because of the technologies used in the process and administration of these businesses. This can pose both opportunities and challenges for manufacturers. For instance, Industry 4.0 technologies, such as the Internet of Things (IoT), artificial intelligence (AI), and automation, can provide solutions for manufacturing looking to improve efficiencies or productivity. These solutions can also improve the perception of manufacturing since technological advancement can trump the perception of a dark, dirty, and dangerous working environment. However, adopting these technologies and integrating them into existing systems can be complex, time-consuming, and costly. As a result, manufacturers should consider planning for the adoption of new technologies, by evaluating the process of adopt, developing a plan that will create minimal operational disruption, and assessing the project’s return on investment.  
  
• Mitigating Cybersecurity Threats
  Another challenge that can result from the adoption of Industry 4.0 technologies, digital systems, or other interconnected technologies is an increased risk of cyberattacks. Manufacturers of all sizes must take precautions against this risk since these attacks no longer are directed at just the largest businesses; instead, there is evidence of more cyberattacks against small and medium-sized businesses. For a manufacturer, a cyberattack can be devastating, especially if the company is unable to operate machinery or access records stored on computers. Manufacturers can consider establishing robust cybersecurity protections, instituting training programs, or completing regular assessments of their IT infrastructure to mitigate this threat.  
  
• Complying with Environmental Regulations 
  Many manufacturers are being encouraged to adopt environmentally friendly practices, either due to regulations or due to customer requirements. These practices may include reducing emissions, monitoring waste disposal, eliminating paper via barcodes or other digital tracking, reducing packaging materials without sacrificing product quality, or adopting other green manufacturing processes. Manufacturers should ensure that they are taking actions to understand and comply with all requirements as well as to support any of their environmental initiatives. 

Manufacturers face many challenges. By actively addressing them, manufacturers can position themselves well to capitalize on opportunities and have a positive impact on their future. To discuss your manufacturing challenges, contact a Manufacturing Solutions team member at manufacturing@hbkcpa.com or 330-758-8613.