Key Manufacturing Predictions for 2020


Despite some signs of contraction in recent months for the U.S. manufacturing sector, the outlook is promising, according to the Industry Week study The Future of Manufacturing: 2020 and Beyond.

In Connecticut, a Moody’s Investors Service report indicates that while the state’s economy continues to work on gaining momentum, its defense-related manufacturing sector is a “bright spot.”

With a well-educated, highly skilled workforce in the state, the foundation is in place to support industry needs.

While baby boomers will continue to retire in increasing numbers, education and training opportunities are also becoming more prevalent to help mitigate the loss of qualified workers.

Portfolio Optimization

According to the 2020 Industry Outlook study by consulting firm Deloitte, many industrial companies are “focused on streamlining businesses and realigning around key markets or customer segments to further drive results.”

Some are turning to mergers, acquisitions, or divestitures to get their “houses in order.”

M&A activity appears to have slowed, but the overall deal value has increased compared to the previous year.

In the Industry Outlook study, M&A activity appears to have slowed in recent months but the overall deal value has increased compared to the previous year.

In 2020, “this trend of lower overall deal volume is expected to continue, but for those deals that do occur, they will likely be of higher value.”

Digital Journey

To increase flexibility in their supply chains, manufacturers are turning to “digital muscle building.”

Deloitte states that, “applying artificial intelligence, cloud computing, advanced analytics, robotics, and additive (3D printing) manufacturing to the value chain can lead to greater visibility and transparency, allowing manufacturers to make faster changes to operations to respond to market-based threats and opportunities.”

Early successes have whetted the appetites of many companies for digital automation exploration and investment.

These efforts build agility and scaleability to help them manage risk.

Supply Chain Ecosystem

More manufacturers are seeking partnerships to hasten their digital transformation, realizing these efforts are more difficult in isolation.

Cultivating a strong supply chain ecosystem is an emerging trend that is showing signs as an effective strategy for manufacturers particularly as it relates to digital momentum.

By actively mobilizing collaborative relationships, companies can more readily apply digital and automated technologies.

By actively mobilizing collaborative relationships within their ecosystem, companies can more readily apply digital and automated technologies to existing manufacturing processes to create new business models and new value for customers.

It also allows them to more easily achieve targeted business goals and drive higher productivity and output.

Going Green

The commitment toward green and clean energy continues in 2020 as a growing number of manufacturers explore multiple renewable energy resources including solar, wind, hydro, and geothermal.

In a Deloitte 2019 social responsibility study, a majority of manufacturers indicated they “plan to source a significant percentage of their electricity from renewable sources over the next five years.”

 A majority of manufacturers plan to source a significant percentage of their electricity from renewable sources.

“Apart from reducing their carbon footprint, many manufacturers agreed this transition will help them diversify their energy dependency and reduce costs,” the Deloitte study says.

Manufacturers would be wise to increase resilience in their operations and strengthen the core of their portfolios in an ever-changing competitive and economic environment. 

Leaders of these organizations can minimize risk by expanding digital and automated technologies, enlisting partnerships within their supply chain ecosystems to drive targeted business goals, and leveraging their social responsibility.

For more information about digital and automated technologies for your business, contact CONNSTEP | 800.266.6672.


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