Where are the new opportunities for change and reinvention that automation equipment companies have to embrace in the new manufacturing industry?



automation industries opportunity & trends Core key points:
1,Even as the pandemic fades, it leaves a changed economic landscape for manufacturers and their customers
2,A less global, more localized economy offers opportunities for those who can adapt quickly
3, Focusing on automation and targeting areas of the economy where growth is possible can help companies move forward successfully

The coronavirus pandemic has hit manufacturers in a variety of sectors. Companies serving booming industries (technology, healthcare, home repair and remodeling, etc.) have seen a sharp increase in demand, while companies making parts for underperforming industries such as aviation, energy and the automotive industry have languished. At the same time, nearly all manufacturers are struggling to cope with supply chain disruptions.


Like many industries, manufacturers are increasingly aware that even as the pandemic ends, it will bring fundamental changes, such as higher levels of automation and a focus on smaller, more localized factories. This shift presents opportunities. How mid-sized manufacturers can adapt to this new normal and thrive in the long term.


What are the biggest opportunities for manufacturing in a post-pandemic economy?
The pandemic has accelerated the shift from a global to a more local economy - a trend that has already begun due to international trade tensions and other factors. As part of this transition, industries are looking to bring their supply chains closer to home and are creating significant "back-to-basics" opportunities. This means that manufacturers and the industries they serve are building new factories or revitalizing old ones that have lain dormant during years of global expansion. These new plants may be smaller, more automated, and have technology that allows them to change their product lines more quickly as demand changes. This, in turn, means opportunities for other manufacturers - those who make automated components, and "integrators" who assemble automated systems. With the new demand for personal technology products and remote connectivity, manufacturers are increasingly aware that even with the big fads, there is a need for more automation.

Manufacturers are increasingly aware that even if the pandemic ends, it will leave behind fundamental changes, such as higher levels of automation and a focus on smaller, more localized factories.

The healthcare industry offers another opportunity. As healthcare facilities and consumers struggle to procure protective equipment and other medical supplies during a pandemic, demand soars and manufacturers in the region step up to meet demand. Demand for expendable personal protective equipment is likely to continue for some time, benefiting medical supply manufacturers across the board. Purchasers of these products were affected by overseas supply chain disruptions during the pandemic and may seek to expand their relationships with local manufacturers.

In addition, Americans who are spending more time in their homes are investing in home improvements - from infrastructure such as window replacement and plumbing upgrades to high-end categories including new heating and cooling systems, pool products, decorating, home office remodeling projects and other improvements. These trends are driving demand for manufacturers of home improvement products and construction equipment. 

What challenges do companies face in preparing for the new economy?
The pandemic continues to pose obstacles, especially for manufacturers serving industries hurt by reduced travel and the resulting downturn in energy production. Specialty companies that may only produce a single part for one manufacturing segment for struggling industries are looking to reduce their exposure in those segments while aggressively reconfiguring their products and processes for other, more lucrative markets. As part of diversification, manufacturers also need to look ahead and identify categories that are likely to perform well in the new economy. 

Liquidity is also an ongoing challenge as companies look to remain viable or make investments to move into new areas. In some cases, forecasts of when things may return to normal have proven too optimistic, and it is important to prepare for the possibility that current disruptions may continue. In addition to these challenges, uncertainty about further government stimulus measures in the year ahead has increased. 


What can companies do now to ensure a brighter future?

As they move forward in a changing environment, manufacturers must adapt to multiple transformations, often by changing the processes and practices they have become accustomed to. In the explosion of online shopping, consumers are demanding faster delivery and more choices than ever before. Meeting these demands will require manufacturers to adapt quickly, whether through new product innovations or modifications to existing products - for example, by allowing consumers to customize products and arranging for manufacturing processes to be flexible enough to respond to product changes.


Preparing for new consumers

Automation can help protect the health of workers by minimizing contact with each other, and it can also help companies further reduce labor costs. While they may not be able to invest in full automation all at once, mid-sized manufacturers can explore the edges of their manufacturing processes, identifying one or two areas that can be automated and modularized.

To thrive in a post-pandemic world, in part by implementing these and other changes, manufacturers should maintain an ongoing dialogue with their bankers. A detailed dialogue can help ensure that they are financially prepared for any challenges or opportunities that arise in the months and years ahead. Read more...