It’s 2022 and after a turbulent couple of years globally, it finally looks like the world is getting back to normal. It may be a new kind of normal, but it's one with fewer restrictions and more flexibility. The pandemic has brought about a huge amount of change in almost every industry, and it has accelerated the digital transformation and forced industries to adopt new ways of working. So, what does 2022 look like for production?
While health and safety has always been a top priority in the manufacturing industry, COVID-19 has intensified this and only for the better. Not only are people more aware of the spread of disease, sanitisation of products and the importance of simple things such as handwashing, but there is more of a focus on employee mental health, monitoring employees’ mental and physical health and in the manufacturing industry there is a change in the not just the way we produce but what we are producing as there is a demand more health and safety products in other industries too.
Smart technology is no longer new but as more of the newer and smarter products come in and replace the old, smart factories are becoming more commonplace. The cost of smart factory software and equipment is continually decreasing making it more accessible and as more manufacturers adopt smart technology others have to follow suit to keep up with the competition. Smart tech not only gives manufacturers access to big data which allows for a more predictive approach to work, but it can tie in with other trends such as flexible working as the smart tech allows for more opportunities for remote work.
Sustainability and the environment have been hot on the agenda for a while now and this is not looking to change any time soon. Sustainability will only become more of a concern for manufacturing as according to Gartner, 85 per cent of investors regard environmental sustainability goals (ESG) as being key to their investments.
Talking in a recent podcast about The path to net-zero emissions, Dr Mekala Krishnan is a partner at the McKinsey Global Institute said: “With a changing climate and the net-zero imperative, it is important to recognize that there’s a whole set of new risks that companies will need to face, whether they are the physical risks from a changing climate or transition risks, which are risks that ensue as the world undertakes a net-zero transformation—much in the same way as cybersecurity risk, which was not on the radar of companies ten, 15, 20 years ago, but now is on every company’s radar. We’re going to see that happen, and we’re already seeing it happen with both physical risks and with transition risks.”
According to a report by McKinsey, automation could raise productivity growth globally by 0.8-1.4% annually.
Now that the technology is there and it has been proven to reduce human error and boost productivity, it makes sense that manufacturers will turn to automation. While automation has been commonplace in automotive manufacturing, other industries are now seeing the benefits of digitalisation and even robotics. Consumers are driving this behaviour as they are demanding fast delivery and the personalisation of products.
According to the latest monthly CBI Industrial Trends Survey, the balance of manufacturers who expect price rises in the next three months rose to the highest since December 1976 (over 77 per cent in February 2022, over 78 per cent in December 1976).
Anna Leach, CBI Deputy Chief Economist said: “Manufacturers will be buoyed by strong order books and output growth, but amid ongoing cost pressures, almost 4 in 5 firms expect to increase prices in the next three months.”
Unfortunately, in 2022, the cost of living and just about everything else is increasing. While many of the trends mentioned in this blog are cost-effective, the rise in fuel prices, supplies and shopping costs will impact the manufacturing industry.
Are you noticing costs increasing in the manufacturing industry?