Looking at the Future of Manufacturing Work

One topic we keep returning to here at Industry Today is manufacturing’s labor shortage. A recent report by Epicor Software cites the need for manufacturers to create and execute strategies that both serve customers and ensure worker engagement and retention.Epicor’s The Future of Work in Manufacturing report describes insights gleaned from 1400 manufacturing leaders and 1200 manufacturing workers worldwide during 2024 concerning gaps and alignment between manager and employee sentiment, connected worker technologies, and workforce efficiency and productivity. 

Key findings of the report  include:

  • While 91% of managers indicated that their companies are prioritizing upskilling, only 70% of workers agreed, a 10% decrease from the previous year, highlighting the need for creating and communicating upskilling initiatives at all levels.
  • Despite increasing investments in technology, only 39% of workers viewed their workplace as “very modern”; 52% of managers, however, did view their technologies as very modern, a significant disconnect in perception between workers and managers.
  • Another significant disconnect in perceptions relates to workplace morale; 57% of managers rated their morale as high compared to only 45% of workers, highlighting a potential.
  • Sustainability is reported as a priority for only about half of manufacturing companies; 61% of managers and 45% of workers reported that sustainability is a high priority. 
  • 75% of manufacturing managers identified supply chain resilience as critical to their operations.
  • 73% of managers and 53% of workers expect their jobs to change due to automation.
  • Worker-reported turnover decreased by 6%, while manager-reported turnover increased by 25%. 

Bottom-line conclusion: While the manufacturing industry is seeing tremendous growth, it appears in many areas to be unprepared for their future and need to create new strategies to improve the frontline workers in their organizations.

Read the complete report, The Future of Work in Manufacturing.

How is your organization preparing its future workforce? See our editorial guidelines.

Happy holidays. Looking forward to another year of comprehensive coverage of industry topics and trends in 2025! We expect many interesting developments.

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AI-Generated Value in 2024

AI was perhaps one of the most talked about developments in 2024. It’s gone from a curious experiment to a significant transformative tool. According to a McKinsey survey, 65 percent of respondents report their organizations are regularly using generative AI, nearly double the percentage from a previous survey just ten months ago. AI adoption has dramatically increased after years of little substantive change, with high prospects for increasing adoption with further disruptive innovation.

The online survey conducted from February 22 to March 5, 2024 encompassed responses from 1,363 participants across a range of regions, industries, company sizes, functional specialties, and tenures. Key findings include:

  • Gen AI adoption most often occurs in functions where it creates the most value, most often marketing and sales, product and service development, and IT.
  • The highest AI adoption trends are in the Asia-Pacific and Greater China regions; specific industries that report the largest increase in gen AI use include energy and materials and professional services.
  • More people are using gen AI both at work and in their personal lives.
  • 67 percent of surveyed organizations plan to invest more in AI over the next three years.
  • HR functions report the most meaningful cost reductions using gen AI and revenue increases in supply chain management.

Read the complete McKinsey report, The State of AI in Early 2024: Gen AI Adoption Spikes and Starts to Generate Value. 

Here at Industry Today, we’ve been covering AI development extensively. Some of the latest examples include Reducing the Fear of Artificial Intelligence and Smart Manufacturing: 5G, IoT, and AI Lead the Way. 

How is your organization using gen AI? See our editorial guidelines.

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Trump Presidency Impact on Manufacturing?

In about another month, Donald Trump becomes the 47th president. Expectations are for a business-friendly administration. But what exactly are the likely policy outcomes?

Kevin Rhode, a partner in the Assurance Practice at The Bonadio Group, has some follow-up thoughts in this week’s Industry Today feature about how the President-elect’s proposed approach to taxes, foreign trade, regulations, and tariffs will impact manufacturing and distribution. 

Regarding likely imposition of tariffs, especially on imports from China, Rhode says that, “It is likely that manufacturers who source overseas will need to identify new suppliers in non-tariffed markets or based in the U.S. They may also consider near-shoring to locations that will allow them to remain compliant with these new policies, like Mexico.”  That said, Rhode foresees that in all probability manufacturers will be forced to pass on higher production costs to consumers.

Enhanced tax credits may look to spur infrastructure investment to help U.S. manufacturers remain competitive. However, there is also the possibility that it may add to inflationary pressure. 

Rhode notes that, “Trump has promised to make the Tax Cuts and Jobs Act (TCJA) provisions permanent, and it is likely that, with the House controlled by Republicans, this legislation will pass.” In addition, cut in expect a 15% corporate tax rates for U.S.-based manufacturing operations. On the downside, he points out that, “While these changes sound positive for manufacturers, there is a risk they may lead to public spending cuts and contribute to federal deficits.”

Also expect further industry deregulation, as well as encouragement of cryptocurrencies. “While deregulation will significantly lower manufacturers’ compliance costs, they must keep in mind the impacts to their public perception. Consumers still widely value sustainability and upholding social standards, so putting the environment and worker safety at greater risk simply to reduce costs will likely have unfavorable reputational impacts.”

Trump has also hinted at new trade deals with countries like Vietnam, South Korea, and India as a way to subvert China’s influence on American trade. He also wants to revise trade agreements with Canada and Mexico. All of these will cause short-term disruptions in supply chains and distribution channels. 

Read the complete article, What Manufacturers Can Expect from Trump’s Presidency.

How do you think upcoming Trump administration policies will affect your organization and how are you preparing? See our editorial guidelines.

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The Tariffs Are Coming

Donald Trump campaigned on the promise of imposing new tariffs. According to the Tax Foundation, steep new taxes on trade are likely to include a 10% to 20% tariff on all imports, at least 60% on Chinese imports, and anywhere from 25% to 100% on Mexican imports.  

Which is why, according to a recent CNBC report, U.S. companies are already employing lobbyists to advocate measures to protect their businesses from Trump’s hardline tariff approach. At the same time, companies such as Steven Madden Ltd. are accelerating plans to reduce goods manufactured in China; in the specific case of the shoe retailer, it aims at a 40% reduction within the next year.

As Kevin Rhode, a Partner at The Bonadio Group, recently wrote in an Industry Today feature, How Donald Trump’s Presidency May Impact the M&D Industry,  “While these protectionist policies could benefit certain manufacturers by reducing foreign competition, they could also raise costs for businesses that rely on imported materials or components, creating challenges in sectors with global supply chains. Distributors, especially those handling international goods, could face higher import costs, leading to potential price increases for consumers.”

There’s also the fear, shared among Wall Street analysts and economists, that across-the-board tariffs are likely to drive up production costs and lead to higher consumer prices. According to the National Retail Foundation, proposed tariffs will have a detrimental effect on consumer spending. “Consumers would pay $13.9 billion to $24 billion more for apparel; $8.8 billion to $14.2 billion more for toys; $8.5 billion to $13.1 billion more for furniture; $6.4 billion to $10.9 billion more for household appliances; $6.4 billion to $10.7 billion more for footwear, and $2.2 billion to $3.9 billion more for travel goods.” 

The effects of impending tariffs still remain to be seen. But the likelihood of increased tariffs is only a matter of time, as this was a central Trump campaign promise. Even if Trump did not have a Republican controlled Congress, he has the authority to impose tariffs unilaterally under Section 301 of the Trade Act of 1974, which he did previously in his first administration. 

How are these tariffs going to affect your organization and how are you preparing? See our editorial guidelines.

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Manufacturing Confidence

The National Association of Manufacturers (NAM) is expressing confidence in a favorable business environment continuing under the new administration.

“The NAM has always focused on what’s best for manufacturing in America, and our track record speaks to that,” said NAM Executive Vice President Erin Streeter. “Our approach is consistent because we know what it takes to get results.”

Specific policy wins cited by NAM across both recent administrations include:

While we’re still in the early stages of exactly what to expect from the incoming Trump administration, Industry Today recently published a statement by NAM President and CEO Jay Timmons congratulating Trump and setting his expectations: 

“With competitive taxes, sensible regulation and unleashed American energy, manufacturers are ready to win big. We are prepared to work closely with you and your new administration to build a future where our workers thrive and American leadership remains second to none. Elections may place Americans on different sides, but as we approach America’s 250th anniversary, this can be a moment to renew our belief in each other and in the promise of our nation—the promise we see every day on shop floors across our country. Let’s work together as we did before to define not just your time in the White House but to define a historic moment in our nation’s history.”

How does your organization view the ramifications of the new Trump administration? See our editorial guidelines.

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Call to Address Manufacturing Policies

The National Association of Manufacturers (NAM) just released a timely statement congratulating President Trump on his re-election, but also challenging the incoming administration to enact policies to ensure a strong manufacturing economy.

“Manufacturers congratulate President-elect Donald Trump on his historic victory and strong performance across manufacturing intensive states,” begins the official statement by NAM President and CEO Jay Timmons. “Now it’s time to get to work to address the policies that will define your administration.”

Timmons suggests building on the 2017 Tax Cut and Job Acts, which while not perfect did help manufacturers stay competitive with foreign companies, to further “kickstart the manufacturing resurgence.” He also references a letter signed by NAM and more than 600 business leaders noting that, “We believe in an exceptional America, and that our future is strongest when we are united. As business leaders, we have a unique responsibility to help bridge divides and advance our shared purpose. In this era of challenges and change, we are committed to working together to strengthen trust and collaboration—within our sectors and across the nation.”

Timmons notes that, “Elections may place Americans on different sides, but as we approach America’s 250th anniversary, this can be a moment to renew our belief in each other and in the promise of our nation—the promise we see every day on shop floors across our country. Let’s work together as we did before to define not just your time in the White House but to define a historic moment in our nation’s history.”

The National Electrical Manufacturers Association (NEMA) also issued a congratulatory statement from President and CEO Debra Phillips. “Now is a transformative time for our electrical infrastructure, and NEMA and our members will be laser-focused on working alongside the Trump Administration to modernize our grid, develop resilient domestic supply chains, and create good-paying American jobs for essential electrical workers.”

What can manufacturers expect from a Trump presidency? Kevin Rhode, a partner in the Assurance Practice at The Bonadio Group, has some thoughts. Please see this week’s Industry Today feature article, How Donald Trump’s Presidency May Impact the M&D Industry.

How does your organization view the ramifications of the new Trump administration. See our editorial guidelines.

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Fake Job Scams 

How many times have you gotten an email from a seemingly legitimate source where you go, “Hmm, do I really want to click on this?” Or a phone call from someone pretending to be from a local law enforcement agency who needs your social security number to verify a traffic ticket? Or something equally suspicious that makes you think, “Probably a scam.”

The fact is we are bombarded with these scams every day. And the reason we are bombarded with them is that they sometimes work. In fact, according to a just released Federal Trade Commission Consumer Fraud Report, some $642 million in losses due to fraud were reported in the second quarter of this year. The top contact method for the scam was by phone call.

Unfortunately, the targets of these fraud scams are often those most vulnerable. Case in point, as Abhilash Garimella, VP of Research & Security Operations at Bolster AI, points out in this week’s Industry Today feature article, are more than a hundred thousand frauds targeting the newly unemployed with fake job scams.

Making these scams even more worrisome is the use of generative AI to present fraudulent job posting from seemingly legitimate companies. How can individuals better protect themselves? Garimella points to these warning signs of fake job scams:

  • Urgent or persistent calls for quick responses
  • Unprofessional communications such as misspellings (though AI has significantly reduced the occurrence of ungrammatical language)
  • Websites and social media presence that appear newly created and/or lacking details
  • Too-good-to-be-true job offers

Garimella recommends that the newly unemployed maintain connections with former colleagues and friends who may be aware of potential cyber scams; the more isolated people are, the more likely they are to be victimized by scams.

He also says that businesses should actively offer cybersecurity training to employees and job candidates, and employ proactive scanning to detect fraudulent job-search schemes.

Read the complete article, The Cyber Crimes Targeting the Jobless.

Is your organization actively educating your staff about potential cyber-attacks? See our editorial guidelines to share your thoughts.

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Building a New Workforce

A good portion of our reporting here at Industry Today concerns the labor shortage confronting manufacturers. Estimates are that 2.1 million jobs could go unfilled by the year 2030.

In Why the Future of Manufacturing Depends on a New Kind of Workforce — And How to Build It, Stephanie Dents cites the need for industry to invest in technology and workforce development to better navigate an unpredictable labor market and supply chain.

Almost a quarter of the current manufacturing workforce is 55 or older and on the verge of retirement. “To address this, upskilling and reskilling programs have become imperative for the industry’s long-term sustainability,” Dents writes. “By offering training in areas such as data analysis, robotics and programming, companies can bridge the skills gap and provide existing employees with valuable new capabilities.”

Another strategy to close the labor gap is automation. Dents points out, however, that, “​​While automation offers a path forward to help mitigate the shortage, it will not and cannot replace all human workers…A shift toward automation also frees up workers to engage in more strategic and fulfilling work, creating an environment that can appeal to younger talent. This shift would allow for more strategic roles that would support broader initiatives. For example, a recent project, which included expanding a facility by 245,000 square feet, created 225 jobs and included state-of-the-art production lines that leverage the latest technologies to make the created jobs more attractive to the newer workforce.”

She adds that, “In today’s competitive labor market, traditional recruitment tactics are no longer enough. Manufacturers that succeed in filling open positions often focus on competitive pay, improved working conditions and flexible schedules…While the labor shortages and supply chain disruptions pose significant challenges, they also present an opportunity for meaningful transformation.”  

What strategies is your organization adopting to transform its employee recruitment and retainment?  See our editorial guidelines and join the discussion of a subject that confronts all of manufacturing.

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Shifts in Global Manufacturing

This election year has seen considerable talk about China tariffs; this is actually just one of the many factors why U.S. manufacturers are shifting their sourcing from China to Mexico, Southeast Asia, and India, as well as countries close to the EU market, such as Turkey and Morocco. According to consulting firm BCG in Harnessing the Tectonic Shifts in Global Manufacturing, a half-decade of disruptions—trade wars, the pandemic, natural disasters, regional conflicts, and industrial policies that together have all caused supply chain bottlenecks and rising costs—is “redrawing the map of global manufacturing for export.” 

Indeed, BCG research reports that “More than 90% of North American manufacturing executives we surveyed said that they have moved some of their production and sourcing to different countries over the past five years—and will continue to do so during the next five years.” The report goes on to note that this shift is occurring at the same time as when U.S. domestic manufacturing is ramping up and when the quest to source low cost manufacturing is outweighed by other considerations such as the need to shorten lead times and gain faster time to market.

As companies continue to relocate manufacturing from China, they need to:

  • Develop sourcing strategies and priorities that best support tradeoffs among business models, business units, and regions.
  • Build end-to-end value chain visibility.
  • Compare landed costs of the leading export manufacturing nations.
  • Gauge delivery capacities are based on manufacturing and supply base, as well the business and political environment.
  • Review the company’s global manufacturing network and continuously assess its performance as policies, the global context, and risks change. 
  • Compare the competitive advantages of manufacturing countries.

“Realizing the full potential of such a transformation often requires time and significant investment,” the BCG report notes. “The transformed footprint must also be flexible enough to adapt as contexts and capabilities evolve. As the risk of disruption in the global business landscape increases—and as competition for suppliers and skilled labor in the world’s rising manufacturing havens intensifies—companies that move first and follow a comprehensive footprint strategy will be in the best position to create sustainable competitive advantage.”

How has your organization shifted its manufacturing sources, and what benefits were gained?  See our editorial guidelines and share your experiences with your fellow readers.

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Manufacturing Modernization Incentives

Recent proposals by Vice President Kamala Harris are a good step to support and revitalize the U.S. manufacturing sector. However, Dijam Panigrahi, Co-founder and COO of GridRaster Inc., argues in the latest Industry Today feature article that tax incentives are just one part of a much-needed modernization effort.

“​​At the heart of this modernization effort lies the integration of advanced technologies such as artificial intelligence (AI), robotics, automation, and immersive mixed reality solutions,” he maintains. “These innovations have the potential to further modernize production processes, enhance efficiency, and unlock new realms of possibility for manufacturers.”

A cohesive strategy for manufacturing modernization entails:

  • Technology adoption and integration: Encourage and support widespread adoption of AI, robotics, and immersive technologies.
  • Workforce development: Investment in education and training programs that equip workers with the skills to operate and maintain advanced manufacturing technologies.
  • International partnerships: Foster collaborations with other countries such as India to address labor shortages and promote knowledge exchange.
  • Research and development: Increase R&D funding for advanced manufacturing technologies.
  • Infrastructure investment: Upgrade digital and physical infrastructure to support modern manufacturing facilities.
  • Small and medium-sized enterprise (SME) support: Provide targeted assistance to help smaller manufacturers modernize their operations and compete globally.

“The challenges are significant,” Panigrahi says, but so too are the opportunities. By working together – across industries, borders, and political divides – we can reinvigorate a manufacturing sector that is not only competitive but also sustainable and inclusive.”

Read Panigrahi’s complete article, Why Manufacturing Needs More Than Tax Incentives.

How is your organization modernizing its manufacturing operations?  See our editorial guidelines and share your experiences with your fellow readers.

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