As we venture into the new year, the manufacturing industry stands on the brink of significant change. The year ahead promises to be a time of innovation and evolution as manufacturers adapt to a new set of challenges and opportunities. From advanced technologies like generative AI and automation to a heightened focus on sustainability and supply chain resilience, the data and analytics technologies and initiatives shaping the next year will be transformative. In this exploration of the manufacturing trends of 2024, we will delve into the key drivers and developments that will define the industry.
Let’s dive into the promising horizons and discover what’s in store for the manufacturing sector in the upcoming year.
Trend #1: Hyper-personalization
Today’s customers expect products that cater to their unique preferences to feel valued and to justify their loyalty. The high-tech industry understood the value of hyper-personalization to grow engagement and trust. There is a reason Amazon knows what you want to buy and Netflix is able to predict what you are likely to watch. Manufacturers who understand the value of hyper-personalization to create tailored products and experiences will gain market share. A strong customer analytics strategy not only helps you understand buyers’ preferences but also their lifestyle, interests, and behavior outside your direct interactions. Holistic customer analytics can enable the development of customer journeys and the ability to better measure and improve the lifetime value of your customers.
Another integral part of this trend is incorporating third-party data to enhance the accuracy of your customer personas. Forrester reports that as of 2020, expanding the ability to source external data was a priority for 70% of organizations. In practice, external data has been transformative for manufacturers. There have been examples across the industry, ranging from a glass manufacturer analyzing crime data to predict window repair needs to Goodyear using external data for digital twins to predict tire performance to Hershey using Covid-19 case counts to predict demand and increase sales during the global pandemic.
By integrating data from external sources, you can gain deeper insight into and identify new customer segments, create highly relevant products with remarkable accuracy, and gain market and competitive intelligence. External third-party data fills gaps by providing additional attributes like firmographic data, technographic data, intent data, and more. All of these data types can help manufacturers develop and scale hyper-personalization efforts.
Here’s why this trend is a game-changer:
- Enhanced customer satisfaction: More personalized products and services result in happier customers. When individuals receive products that align perfectly with their needs and tastes, it fosters brand loyalty and positive word-of-mouth.
- Competitive edge: By embracing hyper-personalization, you set yourself apart in a market dominated by mass-produced goods. This can make you a preferred choice for customers who seek products tailored to their tastes.
- Efficiency and cost savings: AI-driven customization, driven by the trends you uncover with customer analytics, helps you develop products that better fit your market while making you less likely to overproduce products that miss the mark. This benefits both your business and your customers.
Trend #2: Automation and advanced analytics to address labor shortages
Despite rising labor pay scales, manufacturers are finding it increasingly difficult to find and retain skilled workers. A study by the manufacturing institute projects 2.1 million unfulfilled jobs by 2030 due to a lack of skilled labor. This trend has far-reaching implications for the industry, and it will prompt more and more manufacturers in the coming year to explore innovative productivity solutions with automation at the forefront.
With the labor shortage in mind, manufacturers will increasingly look to automation, smart factories, and the integration of advanced analytics as part of the solution. These technologies address labor shortages while preparing the manufacturing industry for a more automated, efficient, and data-driven future as part of Industry 4.0.
Here’s how the trend will impact manufacturers:
- Investments in automation: Automation and robotics are key routes to address labor shortages by producing more with less manual effort. They offer a way to enhance operational efficiency, reduce human errors, and handle repetitive tasks, putting less stress on a smaller labor force.
- Demands for reskilling and upskilling: By investing in training programs to equip your workforce, you can better prepare existing employees to adapt to more automated environments and bridge the skills gap. Some manufacturers are even using generative AI to accelerate training and answer technicians’ questions in real time.
- Pushes for smart factories: Advanced analytics, including machine learning and predictive maintenance, play a critical role in the smart factory concept. They provide real-time insights into production processes, enabling you to make data-driven decisions while reducing manual operational burdens. For example, predictive maintenance can be used to forecast when machinery is likely to fail, reducing downtime and optimizing labor schedules and maintenance activities.
Trend #3: Sustainability
Sustainability is no longer a buzzword; it’s a fundamental requirement for manufacturing practices. Consumers are becoming more environmentally conscious and expect sustainable products and practices, and manufacturers that satisfy these expectations gain a competitive advantage. This growing trend is reflected in manufacturers’ priorities, with 87% of leaders in a study led by contract manufacturer Fictiv responding that sustainability grew in importance in 2023.
By extracting valuable insights from data, manufacturers can make informed decisions to minimize environmental impact while tracking and proving their sustainability claims. Through data-driven insights, manufacturers can identify operational inefficiencies to reduce resource consumption, emissions, and waste, thereby contributing to a more sustainable manufacturing process.
Here’s how this trend will make a difference:
- Resource efficiency: Sustainability isn’t just about environmental responsibility; it also leads to efficient resource utilization. By optimizing resource usage in your manufacturing process, you can lessen environmental impact while reducing operating costs, contributing to long-term profitability.
- Visibility into raw material sourcing: Knowing where your materials came from, how they are produced, and their impact on the environment will help you get complete visibility into the sustainability of your product. This level of transparency will help to reinforce the credibility of your sustainability claims.
- Supply chain certification: Sustainability efforts often involve obtaining supply chain certification to provide a clear signal to consumers that you adhere to stringent sustainability standards in your production processes, further enhancing your brand’s appeal.
- Net zero manufacturing: Nearly half of the largest companies in the world have committed to net zero targets, but most do not have the digital infrastructure to measure, track, and verify their progress nor are they equipped to get sufficient insights to make the necessary changes.
Embracing change: A new horizon for manufacturing
The manufacturing industry is poised for a transformative journey, with new analytics and AI tools and technologies at the helm. However, as leaders evaluate investments in the coming year, they may use greater scrutiny.
The industry may be guided by federal investments in domestic manufacturing over the coming years. Key areas of investment include:
- CHIPS and Science Act: The US government is incentivizing manufacturers to bring semiconductor production back to the states through the CHIPS Act, which promises to invest more than $50 billion in the semiconductor industry. This shift will inject new vigor and innovation into the sector as domestic manufacturers evaluate opportunities to improve on traditional methods. In addition, the CHIPS Act incentivizes manufacturers to partner with minority businesses like Wavicle as part of its investment criteria.
- Inflation Reduction Act: As the specter of inflation looms, this act promises to mitigate the financial strains posed by inflationary pressures and restore economic balance while investing in domestic manufacturing and building more resilient supply chains. This support may offer manufacturers increased opportunities to innovate and grow amid the current high-inflation economic environment. Since the act was passed in 2022, the private sector has announced investments of more than $110 billion in clean energy manufacturing.
- Infrastructure Investment and Jobs Act: With a sweeping infrastructural development agenda and a $550 billion investment, this act is poised to benefit industrial suppliers and supply chains across the country.
With robust federal support for manufacturing, the industry is better positioned for continued development. These investments signal an era of self-reliance, economic stability, and infrastructure-driven growth.
In the years ahead, greater shifts and advancements in manufacturing will unfold. Hyper-personalization will become more precise, automation more pervasive, and sustainability more ingrained. Overall, the future is bright, and the manufacturing sector is on the cusp of remarkable innovation and progress. However, new developments may leave many manufacturing companies looking for help implementing new technologies, modernizing their data strategies, and leveraging analytics to drive growth.
Ready to kick off the next stage of your data and analytics journey and harness the power of these 2024 trends? Get in touch with our manufacturing industry experts.