What Manufacturers Need to Overcome in 2017
Manufacturing is one of the most important sectors that benefits everyone in the world. It’s also one of the most challenging to operate in.
Although manufacturers are smarter and more efficient than ever, the challenges manufacturing companies face aren’t going away or getting any easier. Below are five of the biggest challenges affecting manufacturers right now.
1. Lack of Skilled Manufacturing Employees
With the baby boomers starting to retire and less emphasis on manufacturing jobs in education, the manufacturing industry is suffering from a significant skills gap. According to 2014 research on the issue, over 75% of manufacturing companies reported a shortage of skilled workers – especially in positions that required certifications or degrees beyond a high school diploma, but less than a four-year degree.
This problem is expected to get worse over the next decade as more baby boomers continue to retire and fewer people have the interest, and the skill sets to replace them. In fact, estimates project that up to 2 million manufacturing jobs will be unfilled by 2025.
While this is a serious problem for manufacturers, it also presents an opportunity for technology to fill a bigger role than it already does in the manufacturing process. Manufacturers are also investing in better training programs and offering internships to people who lack the necessary skills
2. Rising Healthcare Costs
Increased healthcare costs are hurting many businesses, but the manufacturing sector got hit especially hard. Manufacturing is labor intensive and often comes with safety hazards that health insurance providers don’t like.
In other industries, many businesses aren't offering healthcare to their employees anymore because it's not required and they just can't afford it. However, this isn't an option for most manufacturers.
Manufacturers have to be more diligent when planning their yearly budgets to find areas where they can cut back or be more efficient so they can afford to provide their employees with the health care coverage their people need. The incoming presidential administration aims to change the current healthcare system, but it's still too early to know what that means for manufacturers.
Manufacturers face increasing regulations and compliance requirements. In addition to strict safety regulations, manufacturers have to cut through red tape at every angle from waste management to transportation.
For this reason, manufacturers require full visibility in their supply chain to ensure they meet all compliance that could negatively impact their business or those they supply. Certain laws require manufacturers to track materials (such as chemicals) through the entire manufacturing process, updating at each step.
As the regulations and red tape continue to increase, technology companies are adapting by inventing new methods of tracking materials with computer chips and reader machines that record every move with less human intervention.
4. Protecting IP
Considering the need to be efficient while meeting strict regulations, it's no secret that manufacturers rely on their proprietary process and other intellectual property to maintain a competitive edge. All business data, especially IP, is susceptible to cyber attack and needs to be protected.
Manufacturing companies spend hundreds of thousands of dollars and years of time perfecting their processes. The last thing you want is for a future competitor to get that information and start using it with little to no money or time invested at all.
The threat typically comes from foreign competitors who often target smaller manufacturing firms that lack the political connections to pursue recourse. The best move is to protect your IP as aggressively as you can from the beginning – if you wait until you're under attack, you can likely recover the data for yourself, but the real damage is the stolen data.
5. Automation Technology
Robotics and automation software actually make life easier for manufacturing companies. In fact, they provide a significant competitive advantage when the competition isn’t utilizing the same technology.
The challenges arise in the costs associated with automation, and the learning curve manufacturers must overcome to put this technology to use. Although prices will continue to go down as more technology hits the market, manufacturers need robotics and automation now to overcome the skills gap and to compete with manufacturers overseas.
Fortunately, an affordable technology that helps solve many of these problems is already available – EDI. However, EDI comes with its own set of compliance issues that are a hassle to manage.
That's where Alpha EDI comes in. Our EDI OptiPacs allows you bypass the process of translating and mapping EDI so you can become fully compliant in minutes.
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