Following years of supply chain disruptions, global tensions, and a recent drive to adopt artificial intelligence (AI), a Fictiv survey indicates that the manufacturing industry is at an inflection point—poised between innovation, growth, and the drive to reduce costs and increase profitability.
"The last four years have redefined what a world-class operations or supply chain team needs to operate successfully in a tough economic environment,” says Dave Evans, co-founder and CEO of Fictiv. “It’s become the expectation for supply chain teams to decrease costs and get products to market faster, all while doing more with less due to lower expenses as companies push to profitability as their number one metric. With all the headwinds faced in navigating risks over the last four years, supply chain leaders have one of the world's toughest jobs. Now, these leaders are battle-hardened and looking for efficiencies everywhere, turning to technology and regionalization strategies.”
Key takeaways:
- Manufacturing leaders report economic headwinds (47%) as most impacting their 2024 strategy, as well as labor costs and shortages (39%). Other factors include increasing competition, increasing pressure to drive profitability, and changes in consumer behavior and spending.
- For the third year in a row, improving manufacturing and supply chain visibility (54%) is the top priority for leaders, followed by increasing supply chain resilience and agility (48%).
- 88% of companies have implemented AI into their manufacturing and supply chains, and 84% of those implementations already provide value.
- Overall, prioritizing investments in sustainable manufacturing remains steady for a second year in a row, with 42% of respondents continuing to cite it as a priority. This is likely because sustainability has been embedded into company values and practices (53%).
- 87% of respondents agree that implementing AI into manufacturing is “...vital to my company's future success.” Notably, nearly half of companies say that AI has enabled them to reduce planned hiring, and 34% expect AI to impact hiring in the next two years.
- The focus on increasing the speed of innovation (45%) remains high, and reports of barriers to innovation have decreased across the board. In fact, the number of respondents reporting no barriers (15%) more than doubled since last year to its highest level in four years.
- 86% of respondents say global tensions are long-term planning considerations. However, while it is still important for U.S. manufacturers to onshore (66%), this trend has fallen since last year (77%), even as diversifying global manufacturing operations have increased this year.
- Increasing U.S. manufacturing (onshoring) remains the leading supply chain strategy for the third year (66%), yet it has fallen substantially since last year. At the same time, North American production (near-shoring) has increased again this year (53%).
