4 Challenges Facing American Manufacturers in 2022 and Beyond

Image of fittings in an American factory

One thing is true about manufacturing in the United States- the only constant is change. However, in this time of pandemics, new technology, and declining unemployment numbers, not only is change constant, but manufacturers MUST be able to adapt to that change quickly.

In this blog, we’ll explore the variety of challenges currently facing manufacturers that threaten American prosperity.

Challenge #1: The War for Talent

According to a famed 2018 Deloitte study, “The skills gap may leave an estimated 2.4 million positions unfilled between 2018 and 2028, with a potential economic impact of 2.5 trillion.”  Many manufacturers add that COVID stimulus money and unemployment benefit bonuses only exacerbate the issue.  When these unemployment benefits end, manufacturers anticipate a surge of applicants for open jobs, which then creates competition between manufacturers for workers.  With unemployment numbers declining to pre-COVID levels, the war for talent is likely to not only continue, but get worse.

Challenge #2: Reshoring the Supply Chain

The pandemic highlighted the need for localized supply chains.  While some companies immediately added equipment and local suppliers to obtain product previously sourced overseas, for many, the transition to a local supply chain and reshoring is a long game.  Many manufacturers don’t have the money or floor space to take on this business internally, and don’t know who to go to in their region or state to source the work to.

Challenge #3: The Cost of Adapting to Industry 4.0

There are new technologies every day in the manufacturing sector, with the most recent being artificial intelligence (AI), additive manufacturing, and innovative training tools using virtual reality (VR) instruments.  While these technologies undoubtedly benefit manufacturers by producing better data, reducing onboarding time, increasing operations knowledge and reducing waste, many manufacturers are still prohibited from capitalizing on these opportunities due to the large investment.

Challenge #4: The Speed of Change

When the pandemic started, manufacturers had to quickly determine how to keep their employees safe while maintaining production levels.  Then, the delays brought on by international supply chain issues demanded a speedy response from the manufacturers that relied on parts that were suddenly not available or weren’t available for many weeks or months.  As the pandemic progressed, manufacturers had to quickly adjust to the loss of workers as they or their loved ones suffered and perished from the pandemic and their children were learning remotely.  The word “pivot” became a dirty word for many manufacturers.  However, the speed of innovation demands that manufacturers continue to adapt and change. Those who don’t will be left behind to perish.

Strength and Resiliency are Key

There is no question that the past year has highlighted existing challenge and brought some new ones to light. Yet time and again, the strength and resiliency of the US manufacturing sector prevails – and it will get through this time of transition, too.

American prosperity depends on the manufacturing community’s ability to step up in the face of these challenges.  Download the free whitepaper below to learn how the manufacturing community is addressing these challenges; how grants support efforts to do so; and the process of finding and obtaining manufacturing grants.

American Prosperity Whitepaper

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