In today’s unpredictable economic environment, supply chain issues are no longer just logistical concerns. They are strategic challenges that impact everything from production timelines to a company’s ability to take out loans. For decision-makers in manufacturing organizations, these disruptions can create significant uncertainty, both in the short term and when planning for long-term capital investments.
A recent survey by Mitsubishi HC Capital America illustrates the evolving challenges manufacturers face as they attempt to modernize their operations amid rising costs, outdated infrastructure, and labor shortages. Importantly, the survey reveals how strategic financing can be a powerful tool for navigating uncertainty while driving forward-looking growth.
Supply chain disruptions as a strategic concern
It’s no surprise that global supply chain instability remains a top concern for manufacturers. However, what’s more urgent is how those challenges impact financial health and strategic decision-making. Supply disruptions don’t just delay shipments; they raise production costs, hinder modernization efforts, and ultimately affect a borrower's ability to repay loans. These effects can derail project timelines and disrupt a company’s ability to make sound, future-focused decisions.
According to the survey, 90% of manufacturers report that integrating new technologies with outdated systems remains one of their biggest hurdles. This isn’t just a technical challenge, but a financial one. Equipment is more expensive, transportation expenses are rising, and the cost of putting off important decisions due to uncertainty is growing.
The shifting landscape of policy and technology
Interestingly, while emerging technologies like automation and AI aren’t considered immediate disruptors, policy changes and tariffs are impacting operating environments. These external pressures are causing many organizations to reevaluate their strategies. While some anticipate minimal change in their equipment needs, others are preparing for significant reinvestment to stay competitive.
Despite these pressures, manufacturers remain optimistic. About 70% of respondents consider their organizations “on track” with modernization efforts, even as they navigate mounting challenges. Still, progress is uneven. Only 37% of respondents assess their technology needs annually, suggesting that many are still taking a reactive, rather than proactive, approach to transformation.
Financing as a turnkey solution
One of the most compelling takeaways from the survey is the evolving role of financing in modernization. An overwhelming 90% of respondents said they plan to use financing to purchase new equipment, signaling a significant shift in how companies manage both immediate needs and long-term strategy.
Notably, 68% of those planning equipment purchases prefer long-term, low-payment structures. These financing models align with planning over a long time period and help ease near-term financial pressure. This is especially critical as 48% of respondents cited high equipment costs as their most significant modernization barrier.
Although 74% of companies still rely on traditional bank loans for equipment purchases, their interest in more flexible alternatives points to a clear opportunity. Financing providers offering tailored, strategic solutions are likely to see increased demand.
Labor and modernization challenges
Beyond supply chains and equipment, workforce issues also remain a major concern. Nearly half of respondents (46%) reported struggling with a skills gap or talent shortage. To that point, 53% of those working to address this issue are investing in equipment as a workaround and using automation or advanced technologies to offset labor shortages.
This approach reflects a broader trend in manufacturing: the realization that modernization is as much about people as it is about products. As skilled labor becomes harder to find, investing in more innovative equipment becomes necessary, and financing makes that possible without compromising short-term cash flow.
The impact on transportation and logistics sectors
The transportation and logistics sector, in particular, is under intense pressure. Half of the respondents flagged this area as needing the most urgent modernization. Concerns about fuel costs, transportation rate volatility, and overall instability in logistics are driving companies to look for ways to modernize fleet operations and supply routes.
These challenges compound existing stressors across the supply chain. As companies strive for resilience, investment in transportation infrastructure, from vehicles to route optimization technologies, will be essential. But these upgrades don’t come cheap, making flexible financing solutions even more crucial.
Continued investment despite economic challenges
Despite all the obstacles, manufacturers aren’t remaining complacent. Nearly 90% of organizations surveyed have purchased new equipment in the last three years, with 47% doing so in the past 12 months alone. These investments suggest that companies remain committed to innovation and growth, even when market conditions are challenging.
At the same time, the business outlook remains relatively strong. About 69% of respondents report stable or growing business pipelines, and 44% expect continued growth in the next six months. This confidence reinforces the idea that while the path forward is complex, many companies see opportunity amid the disruption.
Financing is a strategy
The most important takeaway from this research is that supply chain disruptions and modernization challenges are directly tied to a business’s financial strategy. Traditional financing methods are no longer sufficient on their own. Manufacturers need flexible, creative solutions that support longevity and transformation.
For manufacturers to remain successful, they need to understand how these disruptions impact repayment risk, asset planning, and balance sheet health. They also need to align financing strategies with the real-world pressures facing their organizations.
By embracing innovative financing models, manufacturers can build the resilience they need to weather near-term challenges while positioning themselves for long-term success. In a landscape where stability is rare, adaptability that is backed by strategic financial planning is the most valuable asset of all.
