What challenges do manufacturers face?
Complex Manufacturing Processes and Customization demands
Manufacturing vehicles and machinery involve complex processes with multiple stages, including assembly, welding, painting, and final testing. Moreover, companies are increasingly under pressure to offer highly customizable products.
- 70% of automotive manufacturers report increased demand for customized vehicles, complicating production and increasing lead times by 50%.
- The average automotive assembly line now handles over 1,500 unique parts per vehicle, with an extremely low error margin.
Labor Shortages and Workforce Transformation
The high physical demands of manual labour combined with the complexity of modern production lines make it difficult to attract or retain workers and ensure consistent output.
- The average age of automotive workers is over 45. This in addition to turnover rates being as high as 30%, implies an impending labour shortage in the near future.
- 50% of employers report difficulties report difficulties in finding skilled workers for their open manufacturing or logistics related roles
Supply Chain Disruptions and Material Costs
Disruptions in global supply chains whether due to natural disasters, geopolitical tensions, unexpected demand spikes, or rising material costs can lead to production delays.
- Raw material costs have risen by 25% in the last two years.
- Nearly 70% of automotive companies reported significant supply chain disruptions in 2023.
- Lead times for key components have increased by over 40%, affecting production schedules.
Rising Operational Costs
Higher material, energy, and labour costs strain profitability.
- Energy costs for manufacturing have surged by 20%, and labour costs have risen by 10% annually due to workforce shortages and competitive hiring
- Manufacturers are expected to invest $200B in new technologies over the next 5 years to stay competitive