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Reviving the US Manufacturing Sector

MANUFACTURING

The erosion of the US manufacturing sector over the past couple of years have been a big blow on the growth of the US economy. Small and midsize manufacturing companies are the most affected, while large companies in the US manufacturing sector have managed to thrive despite the growing headwinds. Although it is widely believed that little can be done to put an end to the ongoing decline of US manufacturing sector, continued losses are not a foregone conclusion. On the brighter side, the rising demand, productivity gains through technology, and finding growth in new parts of the value chain will likely create an opportunity for the US manufacturing sector to turntables. Given how vital manufacturing is to the broader economy, capitalizing on these opportunities must be given national priority.

We examine some of the key factors that will fuel growth in the future of manufacturing in the United States and how manufacturers can leverage this opportunity to revitalize their business.

Attaining success in the manufacturing industry involves the use of market research, demand forecasting, product development, and distribution. Facing predicaments in handling it all by yourself? Request a free proposal from Infiniti’s industry experts to learn how we can help you.

manufacturing sectorGrowing demand

Although the US market is not the same familiar ground it was in the past, it remains one of the most developed and lucrative markets in the world. Furthermore, the US consumers are more diverse and expect higher quality and varieties at lower prices. Beyond the domestic market, the demand is also soaring in developed and emerging economies around the globe. However, for tapping into demand growth in emerging economies, it is vital to know exactly where and how to compete. Markets including Africa, Brazil, China, and India represent enormous opportunities, but they have dizzying regional, ethnic, linguistic, and income diversity. This translates to the fact that manufacturing sector companies must navigate greater complexity than ever before and identify the most feasible strategies to produce a wider range of product models with differing features, price points, and marketing approaches.

Industry 4.0

In order to enhance productivity, the US manufacturing sector must capture demand opportunities coming their way. Innovative technologies will play an integral role in determining how effectively they can achieve this and compete better in the market. The rise of industry 4.0 in the US manufacturing sector is largely driven by the increase in volume of data available, new forms of human–machine interactions such as the use of AR, and the ability to transmit digital instructions to the physical world. These advanced technologies are designed to run smart, cost-efficient, and automated plants that produce large volumes or plants that produce highly customized products.

Rethink and reinvent your business strategies with advanced market intelligence solutions. Get in touch with us to learn how our manufacturing sector experts can help your organization achieve this.

Rethinking business models, footprint, and sourcing

US manufacturing sector companies are seeking new ways to capture value beyond traditional production processes. Moreover, with changing input costs, the gap between labor cost in the US and abroad have also narrowed and the cost of industrial robots are rapidly falling. As a result, several US manufacturing sector companies are moving their manufacturing base to the home country. Advancements such as the internet of things and robotics can effectively handle dangerous tasks and eliminate safety risks. Beyond the factory floor, new applications for coordinating distributed supplier networks improve the flow and tracking of raw materials and manufactured parts.

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manufacturing industry

US Manufacturing Industry: How to Improve Scalability and Compete in Future

The US manufacturing industry is quite different from what it was probably a decade or two ago. The erosion of American manufacturing companies has contributed to approximately two-thirds of the fall in labor share of US GDP. This is primarily due to the fact that the output growth in the US manufacturing industry has been largely concentrated on a few industries such as electronics, pharmaceuticals, and aerospace. Despite the headwinds in the sector, some of the largest US manufacturers have managed to thrive, but several small and mid-size manufacturing companies are facing the heat. The United States must now focus on positioning its manufacturing sector to leverage existing opportunities and prepare to compete in the future rather than making attempts to recreate the past or maintain status quo.

Small and midsize companies in the US manufacturing industry need more mentorship and strategic guidance to understand the market opportunities at stake. Request a free proposal for more insights from our experts.

US manufacturing industryStrengthen supplier base

Keeping suppliers at arms-length often has an impact on the bottom-line of large manufacturers. For instance, take the case of automobile manufacturing. The inefficiencies in interactions between OEM and suppliers can add up to development, tooling, and product costs. These costs are generally seen to be higher for US manufacturing companies when compared to their Asian counterparts. Similar inefficiencies can also impact other industries and are more likely to increase as the need to expand product portfolios and reduce turnaround times increases. Seeking lower bids from suppliers can result in diminishing returns over time. Procurement should be viewed as a source of value rather than simply a means to cut costs. Companies in the manufacturing industry can also benefit from identifying the suppliers that provide critical, high-value components and these may not be the largest suppliers. Rather than restricting themselves to only monitoring suppliers, US manufacturing industry companies must make efforts to solicit their ideas, invest in their capabilities, and build trust to enhance supplier relationships.

Many manufacturers, particularly in advanced industries, often report difficulties in identifying and capitalizing on opportunities before their counterparts in the market. Get in touch with our experts to know how our solutions can help companies grab opportunities and gain a better foothold.

Deeper global engagement

Emerging markets open up new opportunities for companies in the US manufacturing industry to win customer loyalty and build their customer base. However, the number of US companies that sell abroad are much lesser when compared to other developed economies. Small and mid-size companies in the US manufacturing industry must gain a deeper and strategic understanding of the opportunities that their counterparts enjoy in advanced economies and turn it to their advantage.

Improve adoption of digital technology

The US manufacturing industry has been relatively slow in the adoption of digital technologies. This has caused a significant impact on the industry’s productivity performance. When compared to nations such as Germany, Japan, and South Korea the adoption of advanced technologies and robotics in the manufacturing industry has been comparatively lower in the United States. In order to capitalize on modern technology, manufacturers have to capture, analyze, and integrate data flows across operations. Also, consider upgrading and replacing some outdated machinery with the latest ones.

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US manufacturing industry

Market Intelligence Solution Helped a Canadian Manufacturing Firm to Devise a Go-to-Market Strategy to Enter the US Manufacturing Industry

US Manufacturing Industry Outlook

While the revenue for companies in the US manufacturing industry fell during the 2008 recession, the industry’s overall performance was not seriously marred during that period. After years of sluggish growth, the US manufacturing industry is expected to proliferate over the coming years. However, challenges such as labor shortages, inability to keep up with new technologies, and cybersecurity issues continue to exist. As such, manufacturing companies are under the pressure to tackle challenges coming their way and innovate processes to gain a leading edge in today’s competitive marketplace.

US manufacturing Industry Overview

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Business Challenge

A manufacturing firm based out of Canada was eager to understand the prevailing market dynamics in the US manufacturing sector to create an informed market expansion plan to enter the US. Also, the client wanted to explore new market opportunities in the US manufacturing industry and understand the challenges affecting manufacturing firms in the US.

To do so, they needed a research partner to provide them with effective market data and guide their way forward. They approached the experts at Infiniti Research to leverage their expertise in offering custom market intelligence solution.

With Infiniti’s market intelligence solution, the client wanted to tackle other industry challenges such as:

US manufacturing industry challenge #1 – Labor shortages

Recent US manufacturing industry study shows that there could be around 1 million unfilled manufacturing jobs by 2025. Although automation and robotics may help manufacturing companies fill major labor gaps, skilled workers will still be needed to operate complex machinery and manage production. Therefore, with Infiniti’s market intelligence engagement, the client wanted to evaluate the capital requirement for recruiting skilled labors in the US and understand how their competitors managed labor shortage issues.

US manufacturing industry challenge #2 – Keeping up with new technologies

With automation, the Industrial Internet of Things (IIoT), robotics, and cloud computing growing in popularity in the US manufacturing industry, the client wanted to keep a constant watch on all the US manufacturing industry trends and developments.

US manufacturing industry challenge #3 – Cybersecurity challenges

With cybersecurity threats rising in the manufacturing sector, the client wanted to identify all the threats and risks facing companies in the US manufacturing industry.

By providing custom market intelligence solutions, we help our client meet their business goals and address market challenges. Contact us to leverage our market intelligence solution.

Solutions Offered

As a part of the market intelligence engagement, the experts at Infiniti Research conducted a US manufacturing industry analysis. During the US manufacturing industry analysis, the experts at Infiniti Research analyzed certain factors such as market potential, investment environment, market developments, trends, supply-demand requirements, and US manufacturing industry growth rate.

The market intelligence engagement also involved market size analysis. This phase of the engagement helped the client to understand the US manufacturing market size.  Also, the experts conducted a competitive intelligence study, which helped the client to analyze business strategies of the top manufacturing companies in the US.

The last phase of the market intelligence engagement involved risk assessment engagement. This phase of the engagement helped the client to identify all financial and security risks affecting business operations of companies in the US manufacturing industry. Furthermore, the experts helped the client to evaluate the capital requirements for recruiting skilled labors, implementing new technologies, and making a smooth market expansion.

Results Obtained

The client was able to gain insights on critical success factors to devise its go-to-market strategy and route to entry in the market. Our experts also supported the client in identifying the right business partners to support their operations in the United States. They also developed a detailed understanding of the attractiveness of market opportunities for their product offerings.

Within two years of entering the US manufacturing industry, they were able to exceed their sales expectation and achieve savings of over 25%.

Request for more information to know how our market intelligence solution can help you devise a sound market entry or expansion strategy.

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