An earlier blog post introduces the humanist commitment to global awareness. The definition was "I will be a good neighbor to the people who share the Earth with me and help make the world a better place for everyone." As a child, I knew little beyond roughly a twenty-mile radius of the farm that was my home. I was clueless about what happened on the farm, let alone what happened around me with local economic, environmental, legal, political, social, and technological issues. However, fifty years later, I am aware of significant global issues. Leading manufacturing operations must also shift from a local to global perspective to remain competitive in an ever-increasing challenging industry.
"We cannot become what we want to be by remaining what we are."—Max DePree
The Patagonia supply chain issues were an excellent segue to global awareness in the manufacturing industry in last week's blog post on ethical development. In addition to their problems in their supply chain, we have also touched on global environmental and later will look at social issues. A humanist manufacturer will need to have a thorough understanding of the impact of its operation on the worldwide community. In addition, the inverse is essential as we must be aware that global industry shifts will impact individual manufacturing companies.
Deloitte has published a report on the 2022 Manufacturing Outlook projecting the manufacturing industry's challenges. In addition, they present five trends that, if addressed well, will allow those in the sector to compete with business agility in the new market. These global trends are:
1. Worker shortage – As baby boomers retire, there is an estimate that by 2030 there will be a labor shortfall of 2.1 million skilled workers. As a result, executives in manufacturing will need to engage in a larger talent ecosystem to recruit, retain, and engage a more diverse workforce pool. Future blog posts will include alternatives to help with this objective. In addition, while automation will solve some of the employment gap, it brings the need for employees with higher technical skills. Therefore, the manufacturing industry needs to evolve significantly to attract new entrants into the workforce.
2. Supply chain instability – Global disruptions in getting more expensive and less available raw materials into a plant and finished products to customers will be an increasing challenge. In addition, civil unrest, environmental issues, global warming, pandemics, worker shortages, and other threats will increasingly strain the objectives of production operations. As a result, manufacturing executives must evaluate the current state of their supply chains, determine alternatives that can lead to a more desirable future state, and then build out and implement a successful transition plan.
3. Smart factory initiatives – Industry 4.0 will bring smart manufacturing to scale for companies that can successfully adopt and integrate digital technologies. Leading global manufacturers are implementing additive manufacturing, embedded metrology, Industrial Internet of Things, robotics, and other evolving process technologies. Those operations unwilling or unable to adopt these new advances in manufacturing processes will slowly become less competitive.
4. Cybersecurity – Cyber-attacks in recent years are increasing as a business risk for manufacturing. As digital technologies expand in plant operations, building firewalls that protect them from data breaches will be essential. Manufacturing operations of every size are susceptible to cyber-attacks, including ransomware attacks increasing by 229% since 2019. The expansion of 5G-connected devices, telecommuting, phishing, social engineering, insider threats, and a lack of cybersecurity insurance protection are key issues of concern.
5. ESG investment – Manufacturers will increasingly face expectations to advance rigorous environmental, social, and governance (ESG) goals. These global objectives include increased benefit to global citizens through better health and wellbeing, gender equality, poverty elimination, quality education for all, and inequality reduction. All align with the humanist manufacturing framework we are developing through these blog posts.
Manufacturing leaders should proactively embrace these challenges as opportunities. Successful innovation will allow production operations to become more competitive in an increasingly complex marketplace. Doing this will simultaneously improve their environmental, financial, and social impact.
The ever-increasing demands of keeping an operation on target to meet escalating customer demands can be all-consuming. However, manufacturing companies of all sizes should become globally aware of emerging industry challenges. Maintaining the status quo is not a good option as the industry must develop solutions to these serious challenges.
A proposed first step is to download the full 2022 Manufacturing Outlook report and do a current state evaluation of your manufacturing operations. Then, look at the areas of most concern to your company. Of which issues should you first become more globally aware?
I am grateful that the manufacturing industry continues to evolve. While keeping up with others in our sector adds additional pressure to already challenging work, doing it well leads to better products and services for consumers. Ultimately, it should also lead to a better world if we embrace becoming globally aware and responding with proactive good.
Next week's blog will integrate humanist principles into leaders' roles, shifting to understanding the importance of the humanist commitment to humility.
To learn more about our work or read more blog posts, visit emmanuelstrategicsustainability.com.
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