January 13, 2021 Six Manufacturing Trends for 2021

There are many manufacturing trends we hope will continue in to 2021, here are six of them.

REMOTE WORKING IN MANUFACTURING

The most important factor affecting manufacturing in 2021 for me is the lasting impact of COVID-19 and how it has forced such a large percentage of the workforce to work in a different way, remotely. Many of these workers have adapted to working from home and have achieved a better work-life balance. They will be reluctant to return to the old ways of working. Travel will become necessary again, but I think that we have seen a cultural and cost-related shift in behaviors that will remain after the pandemic is over. From a services organization point of view, I don’t think we’re going to see a return to people getting back to extensive business traveling, traveling to either visit or work on behalf of clients all the time. The days of services consultants traveling extensively, and having only a few days at home could be a thing of the past. So I think there will be more limited travel, focusing on added-value discussions and relationship building. The disruption caused by the pandemic has changed the services business model. The interesting thing for me is that this move to working at home will be different than the kind of offshoring that’s been successful, where repeatable tasks have been undertaken remotely. We will be in a situation where we can do high value-added tasks remotely because the technology to enable it has rapidly adapted to manage a sophisticated level of interaction.

ENVIRONMENTAL SUSTAINABILITY DRIVES DISRUPTION

The second big trend I see is that sustainability will return to the fore as a disruptive business issue and the reduction of travel is aligned with this. We saw during the first lockdown that the skies over many industrial cities cleared and the hole in the ozone began to mend. Although reduced industrial emissions were a major contributor, people were acutely aware that less travel was also a key factor. Remote working pressure will continue in support of the environmental agenda. Ironically, the pandemic initially saw an increase in the use of plastics and single-use, non-recyclable items for safety reasons, most notably the return to plastic bags in supermarkets and disposable face masks, which contribute to waste and landfills. Innovation kicked in, however, and already we are seeing environmentally friendly products related to COVID being developed and sold.

IMPROVING RETURNS ON INVESTMENT

From a technology point of view, because of the economic impact of COVID-19, there will continue to be huge pressure on companies to justify investments. There will be a desire to realize a return on investment in a shorter time period. I think we’ll see increased investments in projects that show results quickly and provide a return on the investment within a year. The days of waiting three years for something to show benefits are over and that will be a significant change.

GLOBAL TRADE CHALLENGES IMPACT MANUFACTURING

There are some pretty substantial global trade challenges in the world at the moment, and I believe that 2021 will see even more changes. The UK is rapidly moving towards the end of the transition period out of the EU at the end of the year with little progress on new European or alternative global trade deals. The change in US administration may also herald a change in the trade war with China. If this situation improves, it will have a major impact on manufacturing and the fortune of US-owned companies in the Chinese market.

PREPARING FOR THE NEXT DISRUPTION

My company started talking about the huge amount of disruption in the world and how companies have to be able to adapt to it three years ago. The rapid decline in single-use plastics following high-profile environmental campaigns saw major disruption in the plastics and packaging industries and in other industries as well. Now our predictions look prophetic because the world is facing disruption on a major and broad-reaching scale. Companies need to implement contingency and risk planning so that they’re prepared for the next disruption before it happens. This relates to what I was talking about in regards to much shorter returns on investment and remote working as a different way of doing things. Agility will become the keyword in terms of markets, products and investments. Who knows what might come next? It could be another pandemic. It could be a major political upheaval somewhere in the world or an unexpected conflict. The point is, we’ve seen some big extremes happening and I think disruptive events are going to become more normal. Businesses need to double down on finding ways to increase their resilience to disruption as well as the agility to reinvent themselves.

THE RISE OF ANALYTICS

With the increasing pressure on businesses caused by disruption, analytics will become a key tool companies can use to predict, react to and benefit from trends. Software solutions will need to be able to take data and make sense of cause and effect, including scenario planning. Analytics will enhance business systems ranging from long term market planning, to supply chain disruption scenario reviews, to the adjustment to shop floor operating procedures to reduce scrap. This reliance on analytics will mean that services companies will increasingly need to employ consultants who understand enterprise software and industry issues, but can also design analytics to cope with the above scenarios.

Robin Riordan

Robin Riordon, Senior Vice President, Consulting and Transformation Services, QAD
Robin leads QAD’s Consulting and Transformation Services team to deliver rapid, agile and effective QAD solutions to its customers. He has over 35 years of experience of business change, systems integration and consulting, gained in manufacturing, professional services and government. He enjoys spending time with his wife, four children and two dogs in the British countryside, travelling the world and bringing home recipes to cook at home.

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