It’s no secret that manufacturers have encountered significant disruption in recent years, and unfortunately, it appears that this trend will persist throughout 2024.
According to a recent report from global market intelligence firm Interact Analysis, it is expected that global manufacturing output will experience only a modest growth of 0.3% in 2024.
Not a surprising statistic when manufacturers must navigate through numerous disruptive factors. In PwC’s latest CEO survey, CEOs were asked to identify the ‘issues’ they believe will affect profitability in their industry over the next 10 years. Changing customer behaviour topped the list with 56%, but changes in regulation (53%), skills shortages (52%), supply chain disruption (43%) and transition to new energy sources (37%) were also on the list.
Those who wish to stay ahead of the competition in such a challenging environment must leverage the latest advancements and innovations in manufacturing processes and technologies. Take a deep dive into our article and uncover the most influential manufacturing trends for the year 2024.
1. Staying ahead of the competition by investing in digital transformation
In this challenging climate, where growth and resilience are essential, manufacturers need to continue to invest in digital transformation to optimise business operations, increase productivity, and enhance the experiences of both customers and employees.
Technology is always changing, bringing exciting opportunities for organisations. However, it also brings new and unknown risks. Manufacturers are focused on modernising their infrastructure, improving the customer experience and achieving better margins through the implementation of smart factories, AI adoption, and exploring the industrial metaverse. These solutions are seen as valuable assets that can provide added value.
Legacy systems and outdated infrastructure need to be modernised, which involves replacing outdated hardware and software, whilst implementing standardised data formats and developing strong APIs for interoperability.
Typical manufacturing processes generate massive amounts of data and manufacturers need to have a solid data management strategy to manage this. This means implementing data governance practices, investing in data integration platforms, and utilising advanced analytics tools as part of the digital transformation process.
2. Empowering data-driven decision making with GenAI
GenAI, short for Generative Artificial Intelligence, is a form of AI that generates new data by leveraging the information it has been trained on. This cutting-edge technology can create text, graphics, audio and videos in a matter of seconds.
GenAI solutions can revolutionise manufacturing operations, boosting efficiency, empowering data-driven decision-making, and streamlining complex processes for frontline workers. With the implementation of these cutting-edge practices, organisations can seamlessly adapt to the ever-evolving manufacturing landscape and experience a remarkable enhancement in their operations.
GenAI also revolutionises productivity in IT operations. According to Forrester Research, ongoing projects have already witnessed improvements of up to 40% in software development tasks. By leveraging the power of AI, GenAI will empower all IT roles, fostering an environment that encourages innovation, interdisciplinary teamwork, continuous learning, and alignment with the broader business strategy.
IDC’s research indicates that the adoption of GenAI by manufacturing organisations is still in the early stages. Still, there is a trend that suggests that GenAI is steadily being integrated into the technology frameworks of organisations, putting them on an innovation trajectory.
3. Enabling agile, resilient operations with a smart factory
A smart factory brings together cutting-edge technologies like AI, 5G, Internet of Things (IoT), data analytics and cloud computing in the production environment. This synergy allows manufacturers to receive real-time insights, complete visibility, and flexible solutions that can scale with their business.
According to a recent study conducted by Deloitte, a remarkable 86% of manufacturing executives surveyed expressed their belief that smart factory solutions will play a pivotal role in driving competitiveness over the next five years.
In the current economic climate manufacturers need to be agile, resilient and able to efficiently manage their manufacturing operations. The advantages of a smart factory are numerous. One major benefit is the significant increase in efficiency as all processes are perfectly aligned. This not only leads to lower production costs but also reduces downtime and waste. Moreover, underutilised production capacity can be easily identified and eliminated.
4. Optimisation of resources and inventory through supply chain digitisation
Digital transformation extends beyond the factory into the supply chain, where processes should be in place to keep track of inventory levels in real time, understand how customers interact with an organisation’s products, monitor equipment and update carrier locations. This information helps to plan and execute operations at even higher levels of performance.
76% of manufacturers are adopting digital tools like Sage X3 ERP to gain enhanced transparency in their supply chain. Relying on historical forecasting has become impractical with today’s rapid changes in demand and supply.
5. Combating cyber threats by prioritising cybersecurity efforts
By embracing the benefits of increased connectivity and digitalisation, the potential risk of cyber threats increases. The manufacturing industry, with its reliance on intellectual property and sensitive data, can be a tempting target for cybercriminals. That’s why safeguarding valuable assets and ensuring data privacy throughout the digital transformation journey in manufacturing is crucial.
According to a recent study by Deloitte, more than half of the manufacturing companies surveyed reported being targeted by ransomware. Unfortunately, nearly seven out of ten of these attacks resulted in malicious data encryption. Manufacturing remains the most targeted sector for ransomware attacks in 2022 for the second consecutive year.
To effectively combat cyber threats, it is crucial for manufacturers to prioritise cybersecurity as much as their digital transformation projects. While it is common to focus on the potential benefits and ROI of implementing new digital technologies, it is equally important to direct attention towards safeguarding systems and data during and after the implementation process. This proactive approach will help establish and strengthen cybersecurity right from the start.
Sage X3 for manufacturing
Many of these manufacturing trends for 2024 rely on having visibility across the company and the ability to adjust to new trends quickly. That visibility and agility are not possible without having a modern Enterprise Resource Planning (ERP) system built for the manufacturing industry, like Sage X3. Sage X3 for manufacturers provides a single-version-of-truth with all relevant real-time data, as well as having the ability to quickly adjust processes in your business system to adapt to changes.
Sage X3 integrates with other business-critical systems, including warehouse management systems, providing you with a single overview of everything that is happening in your manufacturing operation, allowing you to forecast, plan and even schedule predictive maintenance. In addition, it’s highly configurable, providing the ability to adjust processes in line with new requirements.
Sage X3 manufacturing customer portfolio
Inixion collaborates with numerous manufacturers and distributors, assisting them in achieving optimal efficiency in their manufacturing operations while also providing enhanced visibility into their supply chains. View our case studies page for a deep dive into specific benefits realised with Sage X3.