Yes, inflation is high enough to discourage investing in new machinery. Yes, finding workers is very difficult. Yes, there is a danger that your company will get hacked.
But that’s enough gloom and doom.
A recent survey by consulting firm Wipfli LLP found that despite all those concerns, manufacturers — including a good number of plastics processors — are optimistic about the economy and their own prospects for growth in 2024.
Some 330 manufacturers in 32 states replied to Wipfli’s periodic research report, titled, “State of Manufacturing.” It is available at www.wipfli.com/manufacturing.
About 88 percent of respondents said they expect to increase revenues this year.
In addition to the overall bullishness of the manufacturing executives, about 99 percent said they considered investing in digital transformation and technology advancements for their businesses. That is a clear sign they see manufacturing technologies evolving quickly.
While training and costs are still the biggest barriers, the report said that “starting small but doing so in a way that prepares the company to scale has shown to be very effective in implementing Industry 4.0 and artificial intelligence into manufacturing operations. The real-time data that comes out allows leaders to make better, more timely decisions, which adds value and removes waste from the value stream.”
Wipfli lists five ways leading manufacturers are generating return on investment from implementing Industry 4.0:
- Leveraging data and analytics for continuous improvement.
- Enhancing visibility into scheduling.
- Gaining a deeper understanding of manufacturing profitability.
- Embracing best practices between connected machines and workers.
- Driving environmental, social and governance (ESG) strategies toward zero waste.
Seventy percent of the companies that plan to invest in AI said they would target manufacturing operations.
Nearly all companies struggle to retain good employees and find new ones, and turnover remains high. Manufacturers of durable goods said they rely on better pay, bonuses and benefits, as well as upskilling, to stabilize their workforce.
Addressing the future, Wipfli’s report suggested successful companies will revisit their strategic plan to make sure it recognizes current headwinds. “Successful manufacturers will identify ways to continue to invest in growth opportunities, take costs out of the business, automate core business functions and stay mindful of cash outflows,” the report states.
Plastics processors have been slow to embrace Industry 4.0 practices, according to Mo Abuali, digital director for manufacturing and distribution at Wipfli, in a recent PMM Insight podcast.
“I would say that small and medium-sized manufacturers and distributors, especially in the plastics industry, have been facing challenges around people, process and technology,” Abuali said. “There is good news that those challenges can be overcome with new solutions that are out there.”Abuali said that the 99 percent of survey respondents who said they plan to invest in technology in 2024 included 71 percent who reported they are increasing their technology investment.
“That’s good news, and I think it will slowly start to enhance adoption of Industry 4.0 among plastics processors,” he said. “Marry that with the fact that sensors and hardware are getting cheaper, software is getting more affordable, cloud systems and computational speeds and compute power are also getting more affordable. Couple that with the people and process elements in manufacturing, and I think it could lead to significant increases in adoption of Industry 4.0.”
What are the costs and returns?
