February 21, 2023 60% Manufacturer Costs Rise Due to Investment in Staff

35% of manufacturers cite cost increases of over 40%.

60% of US manufacturing decision makers say that their costs have risen by over 20% due to greater investment in people, according to research findings by Visual Components. For over a third of manufacturers (35%), these costs rise by over 40%.

These figures are reflective of a widespread skills shortage in the US market and the wider technology sector. The scale of the problem has been evidenced by over a third (36%) stating that between 21% and 60% of the workforce have departed the business since July 2021, in addition to normal levels of staff turnover. These resignation waves are leaving sizable gaps in the workforce that manufacturers are struggling to fill.

With costs mounting due to talent shortages, pressure on manufacturers is also being applied from elsewhere. Almost eight-in-ten (78%) state that the rise in energy costs has had at least a moderate impact in their operations. Additionally, almost one-in-ten (9%) organizations are also incurring over half a million (£/$/€) in costs due to a mistake in the manufacturing process.

43% of US decision makers also say that between 21% and 60% of their operations are being held back from being updated with new technologies due to continued cost pressures, presenting a blocker to digital transformation strategies. This challenge arises at a time where customer expectations are also escalating, with as many as 70% acknowledging this trend.

“It’s been a tough last couple of years for manufacturers, with the pandemic largely exacerbating the skills gap problem. To ensure progress of digital transformation and future growth, organizations should place a bigger focus on employee retention and upskilling strategies. Connecting and nurturing the intelligence current staff holds with the accuracy and speed of newer technologies such as simulation software will help to address the labor market crisis, ensure increased productivity and operational efficiency,” said Graham Wloch, Director of Business Development, at Visual Components.

Currently, only 28% of organizations use simulation software to understand the financial impact on OEE, cycle times and/or production costs, highlighting its potential in helping manufacturers to reduce costs during turbulent economic periods.

About Visual Components
Founded by a team of simulation experts and amassing over 20 years in business, Visual Components is one of the pioneers of the 3D manufacturing simulation industry. The organisation is a trusted technology partner to a number of leading brands, offering machine builders, system integrators and manufacturers a simple, quick and cost-effective solution to design and simulate production processes. To move to its next stage of growth and enhance its product offering, Visual Components has acquired Delfoi, a pioneer company in robot offline programming (OLP) software solutions. For more information please visit: www.visualcomponents.com

Subscribe to Industry Today