Manufacturing Predictions for 2022
Reshoring, Supply Chain Strategy, and Rebuilding American Infrastructure
There have been dramatic shifts in both the needs and the realities of manufacturing in the United States over the past two years. These changes are reflected in the expected trends in manufacturing we are seeing in 2022. In the recent past, US manufacturing trends were driven primarily by technology, such as the implementation of Industry 4.0, and the technologies it embraced. These dominated in the last decade. The onset of COVID-19, and shortcomings in the capabilities of our domestic manufacturing industries that it revealed, have shifted the focus from just using advanced technologies to improve existing manufacturing installations. After discovering the shortcomings and risks of foreign manufacturing, especially in China, a trend has begun to reshore the manufacture of pharmaceutical and medical equipment. Included in this was a realization that energy-related infrastructure such as solar cells, biofuels, and lithium batteries are also important national security items. Shortcomings in the supply chain, as well as the increased cost of fuel for transport, have added to the impetus to make more in America.
At Re:Build Optimation, our partners, clients, and investors are working closely to reshore manufacturing in the United States like it hasn’t seen in a long time. Re:Build Manufacturing CEO Miles Arnone explains, “our goal at Re:Build Manufacturing is to invest in the growth of manufacturing businesses in North America and to help our country re-establish the ability to compete in this critically important part of the economy.”
As a member of Re:Build Manufacturing, Optimation must work with the latest emerging trends in manufacturing. Keeping American industry at the cutting edge of innovation is why Optimation Technologies works. We provide state-of-the-art automation systems for clients building new manufacturing facilities in the US. Together at Re:Build Manufacturing, our teams of engineers and manufacturers are supporting reshoring efforts. A highlight of our services is creating highly optimized and automated assembly line facilities, among other services such as machine guarding for manufacturing clients. The latest industrial engineering and strategies are at the core of Optimation. We are proud to be at the forefront of manufacturing innovation.
Reshoring, Nearshoring, Supply Chain Strategies
“The most dominant trend taking place in American manufacturing in 2022 is the effort to bring manufacturing back to the U.S. It is all about onshoring instead of offshoring. Much of the focus will be to minimize dependence on China and to strengthen disrupted supply chains. Additionally, the results will capitalize on Made in America pride.” – Bill Pollock, Director of Operations at Optimation.
After Biden’s State of the Union Address on March 1, 2022, the President championed reshoring efforts to bring back “made in America” in a big way. Reshoring means American-owned companies are shifting away from outsourcing global supply chain strategies to localize supply chain strategies with American-made solutions. Reshoring American manufacturing aligns with a similar concept called nearshoring which actively partners US brands with foreign producers geographically near the United States like Mexico or Canada. Reshoring and nearshoring efforts work together for material supply chain security and reduce logistic strains that limit capacity. The less dependent manufacturers are on global supply chains, secures American-made manufacturing for sustained economic growth. Limiting risks to supply chain logistics by localizing and insourcing labor is a significant trend facing US manufacturing. The global supply chain economy has been more volatile than ever since the worldwide pandemic started in late 2019 and since Russia’s invasion of Ukraine on February 24th, 2022.
In a dramatic case study, the Wall Street Journal reported nearly immediate factory shutdowns and furloughs of factory workers at VW due to supply cut-offs. Ukraine is an essential supplier to VW for electrical wiring and other raw materials needed for electric car production. The wiring was once a minor component for most VW car models made in Germany. Ukraine’s relatively overlooked contribution to car manufacturing has become a critical commodity for VW. The war has shut down Ukraine’s ability to operate free trade ending their ability to supply the German automaker with crucial electrical components needed in automotive manufacturing.
Recently, calls from American leadership to bring US-owned manufacturing home to the United States are driving new interest in US-owned business and foreign partners to re-shore manufacturing in the US. In recent reports, intelligence communities report that Chinese government cyberattacks violate intellectual property rights. “According to some reports, Chinese IP theft has cost the United States $225 billion to $600 billion a year.” The US and foreign partners investing in US-based manufacturing work to avoid predatory practices from foreign competitors. Surveillance state interferences have affected manufacturers who have outsourced manufacturing or other resource supplies to China and Russia over the past few decades. Reshoring manufacturing facilities in the US can protect against corporate theft while actively building new American jobs. The US’s commercial laws work for everyone to help ensure fair use of valuable intellectual properties. High standards in ethics codes and legal norms have proven to help drive profitability and innovation for manufacturers based in the US. When your property is protected by law, competition can thrive, passing on better conditions for the end-consumer in the global economy.
Reshoring is not a policy of isolationism. It’s the opposite. Reshoring American-Owned businesses to move their production capacity into the US is about building a stronger and more resilient economy that serves the American people. Reshoring is an economic strategy strongly linked to manufacturing. Reshoring and nearshoring are meant to increase the viability of foreign partners investing in US-based and North American-based manufacturing. A fortuitous by-product of reshoring will increase the employment of skilled labor in the US. Historically, American manufacturing excellence has been a source of security and economic prosperity for itself and its trade partners around the world. Biden’s SOTU Address mentions, “companies are choosing to build new factories here (in the US), when just a few years ago, they would have built them overseas… we created 369,000 new manufacturing jobs in America just last year.”
Unfortunately, war is stirring in Eastern Europe causing supply chain shortages. This volatile situation is driving more urgency than ever before to secure supply chain logistics. Supply chain security is essential for the US to sustain long-term economic recovery and development. The worst-case scenarios of vulnerable globalized supply chains impact critical resources for markets around the world. Reshoring in the US is a significant trend in the manufacturing sector. In 2022, and light of recent events, the reshoring of production means and supply chain resources inside the US is poised to accelerate the economy.
The New Age of American Manufacturing and Infrastructure
“In 2022, US manufacturing will continue to see substantial demand from reshoring efforts and hard-tech innovation making its way into production (think EV, light-weighting, mobile applications, smart devices and networked systems, biotechnology, etc.). However, this renaissance faces considerable headwinds in the form of a very tight labor market and inflation. Finding enough qualified tradespeople, engineers, and technically oriented professionals generally will be a challenge. Those companies that can staff up, and that have the systems in place to quickly and effectively integrate new staff, will benefit from increased demand, while those who cannot, will see margin pressure as prices rise and supply chain and human capital constraints negatively affect output.” – Miles Arnone CEO at Re:Build Manufacturing
Perhaps the most important trend of manufacturing is making automation more accessible to users. The highly technical systems powering automation rely on a complex digital information network. The Industrial Internet of Things (IIoT) is a reasonably new development impacting the manufacturing industry in some important ways. IBM Watson Internet of Things solution, Cognitive Visual Inspection (Watson), helps workers maintain quality control. IBM uses Watson with their IIoT database to review manufactured components at an inspection rate that is too costly to employ humans to match. IIoT allows a manufacturer near-complete digital control of the manufacturing process. IIoT creates an ample interconnected digital space to improve production efficiency, productivity, and quality at more incredible speeds than before. Lean manufacturing methodology and IIoT work together to eliminate wasted time and resources that enable large and small operations to maximize efficiency and quality and excel in productivity.
Gaining a competitive edge on a world stage in America’s manufacturing sector is dependent on US-based manufacturers adopting tech-driven innovations. The latest computerized technology and digital systems management can help large and small manufacturers increase productivity and efficiency. The Industrial Internet of Things (IIoT), systems automation, AI-powered quality control, high-speed communication, and human-centered integration among these powerful tools will drive American industry into a leading role in the global manufacturing market.
Humans remain the most significant factor in manufacturing. Machines and humans work together during production to alleviate the physical strains on the workforce. In recent times such as the Coronavirus recession, automation helps factory owners absorb human time-losses by incorporating automated assembly line processes. Automation is not a replacement for human labor. Machines supported by Human-made programming and maintenance can create excellent production efficiency. Automated systems help position human talent away from repetitive and perhaps dangerous assembly line roles. While humans move into new positions to support these automated systems, these same people will perform more sophisticated and customizable tasks.
Automation is a trend affecting more than the manufacturing industry. From office administration to higher education and retail management, automated technology helps build more efficient processes virtually in any industry. Machines can tirelessly manage quality control processes to lower a manufacturer’s risks. Automation has been a popular solution in the manufacturing industry since labor shortages impacted production capacity. Manufacturers can weather human labor shortages and afford their existing employees greater job satisfaction with automation services.
Automated machines working alongside humans is a popular system known as Cobots companies use on their assembly lines. The intangible value of a trained professional to monitor product completion is manufacturing done right. Automation trends will not be replacing entire human workforces. Just like humans, machines have weak spots. Machine programming is something uniquely human and automated machines are dependent on humans to perform at production. Automation-supported jobs pay higher and have greater longevity and flexibility since the machine’s spare humans the heavy lifting. Automation is supported best with human hands nearby. The new technology can maximize product quality and expedite product delivery.
Finally, Artificial Intelligence (AI) has been the underlying force that pushes automation and the IIoT into new manufacturing areas. Late innovations in visual recognition software enable large and small teams to replace human inspections with software and affordable cameras to inspect products for quality. AI-powered analytical systems set the framework needed for a successful IIoT to optimize manufacturing productivity fully. Without AI, automation would be dependent on more human workers to maintain production. AI is the “brain” that communicates manufacturing processes. AI can be used with the IIoT to optimize even more than manufacturing aspects of the industry inventory. Supply chain logistics, maintenance schedules, and ecologically responsible tasks can be monitored and implemented with powerful AI software and the IIoT.
Rebuilding American Infrastructure
In late 2021, the Biden administration passed The Infrastructure Investment and Jobs Act securing over $1 trillion in federal funding for general infrastructure improvements around the country. The bill allocates about $110 billion for transportation infrastructure. The dire need for infrastructure reinvestment in the US could not be illustrated more clearly than in late January 2022. Outside of Pittsburgh, President Biden had arranged a press briefing on an aging bridge to emphasize critical infrastructure investments that the Infrastructure and Jobs act had targeted for funding. Known as the Fern Creek Bridge, the whole structure collapsed during heavy traffic before Biden arrived for the expected press briefing. This instance of critical infrastructure failure highlights the existing condition of the US transportation system that is supported by dilapidated infrastructure. Within the US highway system, there are about 617,000 vehicle-bearing bridges, and over half of these bridges are more than 50 years old.
Rising needs for critical infrastructure investment will be a driving force in American manufacturing efforts. New and efficient models for project delivery have been tried and tested. Project delivery models such as Design-Build rely on fast and efficient communication, reliable access of available resources, adaptable and skilled labor and personnel, and sustainable project designs. Optimation is an active participant in Design-Build processes bringing adaptable solutions to bear for sustainable engineering designs. Optimation embraces a mission to bring American manufacturing back to Americans. America’s infrastructure makes an ideal industry for Optimation to find like-minded partnerships to make quality investments in US industries that create American jobs.
With other emerging trends such as Reshoring, America’s infrastructure has a central focus for manufacturing and general economic development in the immediate future. As already we see billions of dollars of federal spending commit to US infrastructure projects, US-based manufacturing can take advantage of these funds to break out of the stagnation that has neglected US infrastructure. Global supply chain trends are repositioning into more localized strategies, and without new investments in US infrastructure, incidents such as the Fern Creek collapse will deliver shocking blows to the American economy. New investment in infrastructure creates the perfect pretext for a revitalization of American manufacturing. More contractors want to work with reliable supply chains, and engineering firms may find “working-from-home” to have a whole new meaning when they find partners like Optimation in the US to provide expert solutions for the development of sustainable infrastructure improvements in the US.
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Read more about emerging trends in US manufacturing:
The National Institute of Science and Technology (NIST) and its subsidiary department, the Manufacturing Extension Partnership (MEP) is a public institution that publishes free materials on emerging trends in all sectors of the US manufacturing industry.
- NIST: https://www.nist.gov/
- MEP: https://www.nist.gov/mep
- Infographics: https://www.nist.gov/mep/manufacturing-infographics
Private Institutional research on Manufacturing Trends
- Industry Statistics | IBISWorld – paid service highly detailed market reports on micro and macro reports of manufacturing sectors | Domestic and Global
- The Future of Manufacturing Archives | Navigate the Future – Dassault Systemes North America | Regional and Global
- McKinsey & Company | Global management consulting – a private consulting firm that delivers free resources and monthly reports on various heavy industry sectors and large scale economic factors
Emerging Trends Research
- 5 Key Manufacturing Trends in 2022 | Navigate the Future
- 2022 State of the Union Address | The White House
- Re:Build Manufacturing Accelerates Onshoring with the Acquisition of Cutting Dynamics, Inc. | Business Wire
- Car Parts, Chips, Sunflower Oil: War in Ukraine Threatens New Shortages – WSJ
- https://storymaps.arcgis.com/stories/92b2ae1a9f11492189d6e9b5fa8ad07e – interactive data sets on critical US infrastructure
- Rockwell Automation – Optimation
- Automation & Controls Engineering and Design – Optimation
- IBM Tasks Watson IoT with Quality Assurance on the Factory Floor | Engineering.com
- At the Edge: Vision AI Software Improves Quality Inspections | Machine Design
- Global Economics Intelligence executive summary, January 2022 | McKinsey
- War in Ukraine will compound global supply chain problems – Insider Intelligence Trends, Forecasts & Statistics
- China’s Record on Intellectual Property Theft Is Getting Better and Better
- Globalization Brings New Risks into the Supply Chain | IndustryWeek
- Aligning Domestic Sourcing Efforts with Business Success | NIST