5 Megatrends That Have Riveted the Attention of Manufacturing CEOs

So the Manufacturers Alliance for Productivity and Innovation (MAPI) asked CEOs and other senior-level manufacturing executives to assess how these trends are affecting their business.

“Recognizing the impacts these forces are already having on manufacturing companies, we wanted to better understand which hindered businesses the most last year and which trends may offer more opportunity than risk,” said Jenn Callaway, MAPI’s director of councils and business research.

“Respondents were overwhelmingly positive about the benefits of automation (84%), robotics (75%) and remote monitoring with IoT devices (75%).”

Here are the 5 big issues that manufacturing leaders told MAPI are affecting their companies the most.

1. The manufacturing workforce is changing. The skills gap is having a negative impact on 64% of companies surveyed, according to senior manufacturing leaders—but from the perspective of middle managers, that number is 100%. Nearly half of CEOs and presidents, or 46%, said a wave of baby-boomer retirements was hurting their firms, while 34% reported a negative impact from the work-life expectations of millennials.

2. The digital revolution is helping immensely. MAPI respondents were overwhelmingly positive about the benefits of automation (84%), robotics (75%) and remote monitoring with IoT devices (75%). But a small minority of manufacturers are concerned about security risks associated with cloud computing (11%) and employee use of connected devices (10%).

3. The global economy presents both risks and opportunities. Nearly half of U.S. manufacturers’ revenue is generated overseas, MAPI said. So it was little wonder that 86% of senior manufacturing leaders reported a negative impact from global economic uncertainty—an uncertainty that continues to reign in 2016. But even at home, 75% of the executives said, U.S. economic uncertainty is a negative. And about the same proportion said the strong U.S. dollar was a problem.

4. Information is a powerful new currency. Because of “unparalleled access to information on pricing and profitability,” MAPI noted, customers have “never been better informed on the total cost of ownership.” But some 75% of senior manufacturing leaders said that understanding total cost of ownership actually had a positive impact on their business.

5. Regulations are hampering growth. A complaint of business leaders that has been heard across the land and is echoing in the presidential campaign, a majority of manufacturing leaders complained about the impact of regulation. About 64% of them cited tax policy, which they said was hurting their business, while close behind was the Affordable Care Act (60%) and proposed environmental regulations (43%).

Editor’s note: There are a number of ways in which CEOs of manufacturing firms can work to overcome the above-mentioned challenges. One way we would recommend would be to participate in closed-door meetings with peer manufacturing CEOs who are dealing with the same challenges you are. There are several organizational options available to CEOs today. One of those options is Chief Executive Network. For more information, click here.

Dale Buss :Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other business publications. He lives in Michigan.