Just when manufacturers had begun to bounce back from pandemic-related supply chain disruptions, the Russia-Ukraine war and inflationary pressures introduced more uncertainty and new roadblocks.
The cascade of setbacks in an increasingly volatile global economy underscores the urgent need for investment in digital technologies to help with everything from improving supply-chain visibility to securing confidential data.
In our Quarterly Executive Poll, we dug deeper into what industry respondents see as their key challenges and how they plan to overcome them. Here are some key takeaways.
Nearly half (48%) of respondents named supply shortages as their top challenge, closely followed by cost of goods (39%). Those results come as the war in Ukraine has exacerbated shipping disruptions and driven up prices for raw materials, food staples, and energy products, while extended COVID-19 lockdowns in China are also roiling global supply chains.
Despite a longstanding skills gap cited by many U.S. manufacturers, only 11% of respondents named talent/labor issues as their top challenge. In July 2021, that number was 63%. While it could simply be that such matters have taken a backseat to supply and cost issues, the finding could stem from employment gains in the manufacturing sector, which added 55,000 more workers in April.
To combat geopolitical and supply chain instability, more than half (52%) of all C&IP respondents are increasing their focus on cybersecurity, paring back operations or investment in certain countries (50%), or nearshoring/reshoring suppliers (45%).
They’re also making additional investments in digital technologies and processes—including those related to supply chain (56%), labor tracking (16%), customers (11%), and data collection and governance (10%). We find it encouraging that executives are remaining proactive and moving forward despite the difficulties they’re currently facing.
With supply-chain visibility a top priority, manufacturers must push their suppliers toward a digital mindset while implementing technologies that offer insights all along the value chain. Whether it’s using artificial intelligence to improve forecasting or monitoring real-time changes in the prices of raw materials, the aim is to deliver a more accurate view of what’s needed, when, and where to meet customer demand.
See what all industries said about inflation, the war on talent, and more—and learn about the poll respondents—in our main Quarterly Executive Poll.