How is the manufacturing industry set up for 2024?
03/01/2024 Augury Systems Ltd
By Brian Fitzgerald, CRO of Augury
Looking back at 2023, Industry 4.0 and automation were among the most talked about topics in manufacturing. Within those broad subjects, the focus was often on process optimization, predictive maintenance, and using real-time data to increase efficiency. The industry also saw an increase in the use of digital twins, or virtual replicas of physical systems or products. Many manufacturers integrated automation and robotics, helping them move toward Industry 4.0 goals. The UK manufacturing sector did well in 2023, raising its output to £224 billion and, in the process, climbing from 9th to 8th place in the global manufacturing rankings, cementing its role as a key player in the industry.
The year had its share of obstacles, too. Global financial risks introduced uncertainty and confusion into the manufacturing landscape, setting off a chain reaction of negative effects that slowed production processes. Tariffs and sanctions led to raw material shortages, increased costs, and delays in production. And a slew of other challenges–geopolitical tensions, advancements in automated tech, and attitudes toward ESG–have all contributed to a changing manufacturing landscape.
As the industry continues to evolve, let’s take a look at the trends that will impact manufacturers in 2024.
2023 challenges will only get harder in 2024
Augury’s State of Production Health report shows that 23.3% of manufacturers say their biggest challenge is upskilling talent. This is no surprise given that most manufacturers are still using outdated Industry 2.0 or 3.0 technology, leaving them with a massive skills gap when the time comes to upgrading to Industry 4.0 technology.
In the UK, 36.7% of manufacturers say their biggest challenge is adopting new technologies successfully, which puts both the companies and the workforce at a disadvantage. Making matters worse, manufacturers also face challenges due to an aging workforce and immigration restrictions, which make it even harder to attract young talent. EU countries do a lot better when it comes to balancing worker rights and democratising worker engagement and safety. While the UK isn’t falling far behind yet, if manufacturers don’t find new ways to attract fresh talent, this may start to happen.
Last but not least, 21.7% of manufacturers in the UK say that rising supply costs are their biggest challenge, evidence that pandemic-era supply chain problems persist and increases in demand make it difficult for some organizations to operate at full capacity.
2024 will be about AI, but not AI as we know it now
In 2024, manufacturers will face many familiar challenges, such as the ongoing skills shortage and supply chain disruptions. New obstacles will emerge, too, including the need to introduce Industry 5.0 and AI to their plants and machines, which will require massive tech upgrades. However, it’s not about AI next year. AI won’t be about AI next year. Instead, it’s about the processes behind it and business outcomes. AI technology will be less visible and more effective. All in all, AI itself will not be a competitive advantage but a tool that can help solve business problems, and the winners will be those who apply it better to real-world issues.
Having narrowly avoided a recession, manufacturing investment will likely return to a normal cycle, with a focus on technology that drives efficiency, productivity, and sustainability–though not necessarily capacity expansion.
There will be an additional shift in focus from AI to the business outcomes it enables, with less visibility and more value in 2024. With the growing emphasis on sustainable practices, and pressure on companies to disclose their carbon footprint and ESG credentials, there will be several changes to the UK manufacturing industry. The focus will remain on ESG, but in a more business-centric way, shifting to an emphasis on attracting mission-oriented workers and reducing waste to counter the cost of raw materials.
2023 has not been an easy year for the industry. While the adoption of AI will be the main focus of 2024, companies will need to find the right balance of tech and talent investment, while also taking a proactive approach to regulatory changes. And there will be surprises, too. Manufacturers that prioritise adaptability, as well as innovation and sustainability, will be better positioned to thrive, not just cope, with what’s sure to be a year of change.
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Augury Systems Ltd
39 Haatzmaut Street
1st Floor
Haifa
3303132
Israel
Tel: +972-77-4395527
Email: info@augury.com
Web: https://www.augury.com/
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