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Manufacturers Must Embrace Agility for Growth

In today’s fast-changing global environment, manufacturers are encountering a mix of challenges and opportunities. A recent survey by Aprio, the 24th largest business advisory firm in the U.S., highlights that manufacturers must adapt quickly and efficiently to navigate a volatile geopolitical landscape characterized by trade wars and other uncertainties.

Key Findings of the Aprio Survey

The U.S. National Manufacturing Distribution Study conducted by Aprio calls attention to critical areas where manufacturers can enhance performance. The study collects insights from executives in a diverse range of industries across 34 states, covering everything from supply chain challenges to workforce management.

Supply Chain Challenges

One of the prominent issues identified is supply chain inefficiencies. Nearly half of manufacturers are currently grappling with problems such as product defects and delays. Remarkably, more than 50% of companies do not evaluate their suppliers on essential criteria. Out of those who do, only 48% consider quality and reliability, while a mere 36% share forecasts with major suppliers that could mitigate future challenges. This lack of communication and assessment reflects a significant gap in operational practices.

Information Technology Risks

The survey also highlights cybersecurity concerns, with 48% of companies reporting at least one data breach in the past year. Alarmingly, 17% indicated experiencing five or more breaches. Despite these figures, many essential cybersecurity best practices, such as conducting audits and implementing training, are still neglected by a large number of manufacturers. Companies must prioritize rigorous cybersecurity measures to safeguard their operations and data.

Workforce Management Dilemmas

Labor turnover is another pressing issue, with 42% of companies citing turnover rates exceeding 10% among frontline employees. The issue isn't exclusive to lower-tier workers; turnover in management and executive roles is significant as well, suggesting a widespread challenge in workforce retention. Companies are encouraged to foster a stable work environment to prevent the loss of skilled labor.

Operational Enhancements Needed

Furthermore, operational efficiency is lacking, as two-thirds of manufacturers do not empower frontline employees to address critical issues effectively. Only 33% report having a workforce that is multi-skilled, which limits their ability to respond to challenges swiftly. Empowering employees with more responsibility could be key to enhancing problem-solving capabilities within organizations.

The Path Ahead

Given these findings, Aprio's Manufacturing and Distribution Leader, Adam Beckerman, emphasizes that despite challenges, there exists an untapped potential for manufacturers to adopt better practices. Automating processes and improving supply chain communications can significantly boost efficiency, reduce costs, and position manufacturers for growth in an increasingly complex global market.

The call to action is clear: manufacturers must embrace agility, enhance operations, and implement robust measures across all aspects of their business functions. By taking proactive steps, they can set the stage for sustainable growth and resilience in the face of ongoing industry challenges.

For more insights from the Aprio survey, visit Aprio’s website.