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A Comprehensive Guide to 2024 Manufacturing Risks

A Comprehensive Guide to 2024 Manufacturing Risks

By: Dean Dorton | January 15, 2024

Navigating the 2024 Manufacturing Landscape: A Comprehensive Guide to Mitigating Supply Chain, Talent, Cybersecurity, Technological, ESG, and Economic Risks

Manufacturing & Distribution

Supply Chain Agility

  • Acquire logistics companies or develop in-house logistics operations.
  • Greater supply chain visibility and higher quality as well as reducing shipping costs and time due to more streamlined logistics networks.
  • Consider new suppliers and sourcing options.
  • Create more connected supply chains through digitizing that help overcome global geopolitical issues and global pandemics.

Battle for Talent

  • Labor challenges are to be expected due to a shrinking pool of applicants, an aging workforce, and a shortage of highly skilled workers.
  • More emphasis will be placed on outsourcing.
  • Diversity, Equity & Inclusion (DEI) approach to attract more women and racially and ethnically diverse groups.
  • Considerable void when it comes to skills and experience. Manufacturers need to work with schools and universities in their communities to ensure that manufacturing-focused subjects are being well promoted and taught, including the integration of advanced technologies.

Cybersecurity

  • Rise in cybersecurity incidents across manufacturing companies. RSM survey of middle market businesses in 2023 indicated that 20% of companies experienced a data breach in the past year and 35% claimed a ransomware attack.
  • Cybersecurity assessments are a must to identify critical information and intellectual property that needs to be protected.
  • Education of employees of potential phishing schemes is paramount to a successful cybersecurity campaign.

Technology

  • Data analysis predictive maintenance and use of data analysis to identify anomalies in equipment performance.
  • Data decision-making around sourcing, production, fulfillment, and cost reduction.
  • Adopting generative artificial intelligence (AI) will help with predictive maintenance and quality control.
  • Controls around AI including ethics.
  • Autonomous vehicles in warehouses to move materials and products.
  • Investments are needed to support advanced technologies.

ESG

  • Legislation has placed more emphasis on green/clean technologies (tax credits, grants, government financing)
  • Manage waste
  • Smart buildings
  • Electrifying fleets

Inflation

  • Inflation has slowed with an expected 2.5% rate in 2024.

Possible Recession

  • Recession is still possible but at a lower probability in 2024 compared to 2023.
  • Geopolitical risks provide elevated uncertainty in 2024 that could provide unfavorable economic results.

Source

RSM “Top 2024 Manufacturing Trends to Watch”; Federal Reserve Bank of St. Louis 2024 Economic Report

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