Sustainability in manufacturing: How pulp and paper companies can shine
Pulp and paper companies have an opportunity to lead the way for sustainability in manufacturing by focusing on five key areas.
Manufacturers face no end of challenges this year as supply chains continue to wobble, labor remains in short supply, and climate change looms. Production pressures rise as we-the-consumers need more, need it quicker, cleverer, and greener, than ever before.
As we navigate the intricate web of manufacturing trends in 2024, it’s clear that – as ever – the key for success in this rapidly changing sector comes down to a company’s ability to adapt and transform.
2024 manufacturing trends
Despite the challenges, there’s optimism that 2024 will be a year of increased investment and growth for the US manufacturing industry.
According to a survey of purchasing and supply executives by the Institute for Supply Management, 58% expect higher revenue this year compared to 2023. Survey respondents expect a 5.6% net increase in total revenue for 2024 compared to 0.9% last year.
The survey showed that executives expect revenues to improve this year in 15 manufacturing industries, including apparel, paper products, computer/electronic products, and primary metals.
Here are seven key manufacturing trends to track this year:
- Smart factories
- Supply chain disruption
- Servitization
- Labor challenges
- Sustainability
- Cybersecurity
- Industrial policy revival
1. In 2024, manufacturers focus on smart factories
Innovation continues to be the cornerstone of manufacturing excellence, with Industry 4.0 technologies taking center stage.
The integration of artificial intelligence, machine learning, and the internet of things (IoT) is redefining production processes, optimizing efficiency, providing better supply chain visibility, and fostering a new era of smart manufacturing.
Automation, in particular, is witnessing unprecedented advancements, enhancing precision and speed while reducing operational costs.
In fact, a Deloitte study found that 86% of manufacturing executives think smart factory solutions will be the primary drivers of competitiveness over the next five years.
Manufacturers have more digital technologies than ever in their tool chests. Exploiting these will improve agility and resilience, which in turn should help mitigate supply chain and labor issues. Look not only for the technologies themselves, but also at the ways they’re connected and deployed to represent something greater than the sum of their (virtual) parts.
AI is a top manufacturing trend, of course, but we can also expect trends from the last few years become more deeply enmeshed, including IoT, cloud computing, and edge computing.
In 2024, Gartner expects manufacturers to increase their tech spending. Fifty-four percent of manufacturing businesses polled by the research firm said they plan to spend 10% or more on software compared to last year.
2. Supply chains remain shaky in 2024
Global supply chains are reliable in times of peace and prosperity, but vulnerable to pandemic and global conflict. Negotiating this ebb and flow continues to be a challenge for manufacturers.
One positive trend is that this is stabilizing somewhat. According to Deloitte, the average delivery times for production materials was 87 days last August, after reaching an all-time high of 100 days in July 2022.
However, after nearly three years of shortages in critical components such as electrical and semiconductor parts, production and delivery is still lumpy.
With the US CHIPS and Science Act, and its recent EU counterpart, we can expect new semiconductor manufacturers come online in 2024, with more to follow, but these will not be an instant panacea – especially as demand for chips will continue to rocket in multiple industries.
The focus on smart factories and digital supply chains will help companies become more resilient as they face these ongoing challenges.
Some trends we can expect to see: increased use of digital twins to model and simulate processes and optimization; augmented reality and virtual reality working together; advanced robotics and collaborative robots (cobots) that improve precision and efficiency; 3D modeling and 3D scanning to allow rapid prototyping with minimal waste; and efficiencies in remote monitoring and maintenance that anticipate failures and keep things rolling.
3. Driving growth through servitization
Servitization has been a top focus for manufacturers looking for new revenue streams, and is a trend that’s expected to keep growing in 2024.
By adding new value-added services to their business model, manufacturers are differentiating themselves from the competition and carving out a path to sustainable growth.
Smart technologies such as IoT, machine learning, and predictive analytics, are accelerating the servitization trend towards offerings such as bundled support services, subscriptions, and outcome-based services.
For example, with connected, real-time data from IoT sensors on equipment, manufacturers can offer innovative service management that accelerates problem-solving in the field. AR technologies can help on-site technicians improve accuracy to avoid additional site visits.
According to a McKinsey & Company study, industrial companies that prioritize aftermarket sales and know what their customer need can increase their services revenue by 30 to 60% within three to five years without needing to make large capital investments or huge cost reductions.
Servitization in manufacturing: New services drive growth, profits
Find out how manufacturers are turning to new value-added services to drive sustainable growth in a volatile market.
4. Manufacturing industry’s people problem
Labor issues have been a growing challenge for manufacturers as the pool of available talent shrinks. As older workers retire, not enough younger people see manufacturing as source of good, dependable, safe jobs.
So much so that 74% of executives surveyed by the National Association of Manufacturers feel that attracting and retaining a quality workforce is their biggest challenge.
That’s greater than competing issues of weak domestic economy (55.7%), rising health care costs (53.1%) and unfavorable business climate (52.1%).
This leads to a couple of related trends. Upskilling existing employees and improving the employee experience is a key strategy for manufacturers and across industries.
For example, Tyson Foods opened a new bacon production facility in Kentucky that was designed with advanced safety features, including robots that the company says reduce physical stress for workers. Tyson also said it’s offering employees technical training to boost their skills.
Another way manufacturers are building talent for the future is through long-term investment in community building to establish future STEM-ready workforce pipelines.
A study by the Women in Manufacturing Association and Xometry found that 38% of women chose a career in manufacturing after graduating from a STEM program.
5. Trending in 2024: Sustainable manufacturing
Consumer expectations are creating an ever-greater tension between customization and sustainability. Mass customization, enabled by advanced manufacturing techniques such as 3D printing, is becoming a standard practice, allowing manufacturers to cater to individualized consumer needs at scale.
At the same time, environmental concerns and regulatory requirements are propelling the industry towards greener practices, pushing for eco-friendly materials, energy-efficient processes, and circular economy models.
Manufacturers are under a lot of pressure to be more sustainable, which strictly speaking is more of a force than a trend. Plants will have to respond and evolve to the growing emphasis on sustainable and eco-friendly manufacturing practices, including the use of renewables, waste reduction, and circular economy principles.
This will of course have a ripple effect for entities across the supply chain, innovating data storage and more to consume less power, take up less space, and require less downtime.
According to a study by the National Association of Manufacturers, energy efficiency along with the transition to renewable energy sources are top sustainability priorities for manufacturers as they work to meet net-zero emissions goals.
Remanufacturing explained: Definitions, benefits, examples
Remanufacturing is gaining traction as companies look to boost sustainability and drive new revenue. Get examples and learn the benefits.
6. Cybersecurity becomes a top manufacturing trend
A 2023 report by Sophos shows that manufacturing is consistently one of the most popular target of ransomware attacks, with 56% of manufacturers surveyed reported being hit in the last year.
Even more alarming, 68% of the attacks resulted in data being encrypted, so that the company couldn’t access it.
Organizations also were less able to successfully defend before attackers encrypted their data, and more likely to pay higher ransoms than in previous years. So, the bad guys are getting smarter, and more successful.
All this means manufacturers really have no option but to tighten up, and make cybersecurity just as high a priority as digital transformation itself to mitigate the risk of data loss and supply chain disruption.
7. Industrial policy revival drives innovation
Industrial policy – when government supports certain sectors or manufacturers – was major force in the US economy post-World War II. Driven by shaky supply chains, climate change, and competition/conflict from China in particular, it’s making a comeback.
US legislation such as the Inflation Reduction Act of 2022 and the CHIPS and Science Act is driving investment and construction in the clear energy and semiconductor industries.
Still, with China leading in 37 out of 44 critical technologies, Western democracies are being massively outpaced, and industrial policy changes are just one step for them in catching up.
Governments can stimulate growth and innovation if they use it to define their areas of focus. In a massive year for elections, it could prove to be equally so for policy change.
Keeping up and pressing ahead
As they work to improve efficiency through digital transformation and seize new opportunities, manufacturers also are building resilience through collaboration.
In 2024, collaborative ecosystems are also emerging as a key theme, with manufacturers forging partnerships that leverage each other’s strengths and capabilities. The right partnerships will foster innovation, accelerate time-to-market, and address supply chain challenges.
