Current issues affecting the global manufacturing industry

Globalization has had a massive impact on manufacturing for decades, and outsourcing from major players such as the USA, the UK and other Western countries led to economies in Asia – particularly China and India – pursuing rapid manufacturing growth. For the outsourcers there was the advantage of cheap materials and cheap labor, in comparison to what would be paid on home soil, and even the costs of transporting manufactured goods was a worthwhile investment.

You could be forgiven for believing that everything would continue to carry on as normal but that’s not the case. Many parts of the world are in turmoil, through war, migration due to conflicts, and from huge changes to commodities that were once banked on as a safe bet for investment and continued high profits.

Change and uncertainty are the watchwords for manufacturers and many are waiting to see what will happen over the next year, effectively keeping their powder dry until they are ready to move forward. Yet there are massive opportunities for those manufacturers prepared to invest and innovate rather than tweak their operations. Transformation doesn’t come easily, but if you are prepared to innovative and embrace new technologies, harnessing them to develop your business could put you ahead of competitors.

The oil crash

The financial crash of 2007 and its aftermathwas a major hit on economies worldwide. Banks and other financial institutions made serious mistakes in their lending policies that government regulators failed to spot. Economies contracted and so manufacturers were squeezed because lenders were cautious and many thousands of jobs were lost. Though economies began to grow again, one of the major advantages recently has been the huge decrease in oil prices. It’s not good for oil producers and all the ancillary services that refine and transport the fuel, but it has helped reduced costs both for industry and for individual consumers. If consumers have more money in their pockets thanks to this they are more likely to buy goods and products.

Uncertainties in the global economy have also led to stock markets worldwide losing value as investors bail out of stocks, with many company share values plummeting. Is it all swings and roundabouts? You could argue that values will rise again as economies strengthen but there have been warnings that there is another potential financial collapse not far away.

So what should manufacturers do to ensure they are in the strongest possible position to capitalize on whatever happens to global markets?

Transform and innovate

When you consider what technological advancements have done for the manufacturing industry throughout history you know that new breakthroughs are always about to happen. The Industrial Revolution in Britain changed the face of the world in terms of automating tasks and the innovation has never stopped. The advent of IT was also another revolution as powerful as the Industrial Revolution and changed the way business operated. Who now doesn’t have a website, either for marketing their services or selling products online? Only those that are effectively going nowhere.

Developing manufacturing

Without successful manufacturing the global economy would seize up. There are essentials that businesses and individuals need as well as those that are useful, helpful but not necessarily essential. So manufacturers need to look at what the main needs of businesses are as well as those individual consumers, and what they can export successfully as well as sell in their own economic environment.

The automotive industry has had a tough time recently with the scandal about altering or suppressing details about toxic exhaust emissions from vehicles made bya major motor manufacturer. It’s the type of problem that is likely to cost any manufacturer adjudged to be guilty of manipulation of data many billions of dollars. It also makes investors wary because share prices in those companies can drop rapidly, but the need for vehicles globally will probably counterbalance current difficulties.

Technologies for making clothes and other textile fabrics will always be a prime market for any manufacturer in that industry. If you think about the technology originally developed, once again in the UK, to mass manufacture textiles, then new developments have moved that on over the years so that there are technologies that provide instant solutions to producing high quality products and reducing costs. If you check out the latest ultrasonic cutting machines and components you will get a picture of how manufacturers are employing these new technologies for their benefit.

Heavy industry needs to keep up with innovation Utilities, whether nuclear, electric or gas powered, as well as water and sewage treatment systems need to constantly evolve to provide the highest quality equipment and services.

Investment and training

Without the people who have been trained to a high level, understand the particular manufacturing industry they have chosen, and are prepared to contribute their expertise as they work up through the industry, nothing will happen. Operations can be maintained but in the end everything needs to be renewed. That doesn’t just mean the plant and equipment, it means thinking ahead for what will be needed in the future. So colleges and universities, manufacturing businesses that offer apprenticeships to develop young talent, are key to the development of the support mechanisms they need as well as providing opportunities for new thinking.

There is an issue around recruiting people who are highly employable. If you look at a sector such as pharmaceuticals, it’s a global business and researchers have spent many years working towards their goals. They can easily be poached by another global business so it’s worth considering how people are employed if you want to keep them, what benefits they will have, and thus how they can be retained to contribute to the business.

There are no easy answers. Manufacturing is the lifeblood of economies but has to exist in a world where, for example, cheap steel from China is dumped on the market and cheap oil skews the way stock exchanges operate. These and others are issues that won’t go away.