The 4 Major Challenges Facing Manufacturing in 2019


Despite what amounts to almost an obsession globally with financial services and the services sectors, the manufacturing sector still accounts for almost 1 in 4 of the world’s employees, according to research by The World Bank.

With over 500 K2 customers worldwide engaged in various manufacturing processes, from cars to chairs and beer to jam, we hear first-hand the problems they face and the ways they are exploring how to make things better. Below are the biggest challenges they see facing the manufacturing sector today:

  1. Regulation and Compliance

    Although highlighted by recent GDPR regulations affecting how manufacturers promote their goods, the sector has always faced increasing regulation and compliance measures. From health and safety to waste management, it’s a massive burden to manufacturing companies, particularly when they vary from country to country inside the European Union (EU). Regulations also require the ability to track items and materials used during the manufacturing process, often with a green agenda, and companies have to be able to offer complete visibility throughout their supply chain. Indeed, 40 percent of manufacturing firms were concerned about a lack of visibility into the supply chain, according to a KPMG survey of global manufacturing leaders.

  2. Staff Shortages

    A recent study by Deloitte indicated that nearly 4.6 million manufacturing jobs will become available over the next decade in the United States, while nearly 2.4 million of these are expected to go unfilled. If this was mirrored across the EU as a whole, we could face the prospect of over 50 percent of jobs being vacant. Unfortunately, only 50 percent of manufacturers had implemented better automation as a way of handling this crisis in human skills availability. Fewer still had invested in better ways to recruit and retain staff and increase the effectiveness of onboarding to ensure retention.

  3. Global Competition

    The rise of the internet as a way of doing business has naturally increased the number of outlets a manufacturer can utilize to take their products to market. However, it also enables competitors to offer their products in a country without the need for any setup costs or logistics aside from a delivery mechanism. According to Deloitte, the global competitiveness of manufacturing companies in much of Europe is expected to be static at best, and in many cases, fall by 2020. Something clearly needs to be done to reverse that trend, or European manufacturers will continue to lose out to the increasingly aggressive economies of China and the U.S.

  4. Automation

    The same Deloitte report highlighted the need for businesses to increase the value of the products they produce and, at the same time, add further automation to drive down costs. As recounted in an article in ManufacturingGlobal.com last month, a recent Forbes survey suggested that a high majority (90 percent) of businesses recognize the importance of equipping workers with the best technologies to fulfill their roles, however only 36 percent of executives believe they are meeting these obligations. In the same survey, the potential automation of workforce tasks is highlighted as a positive opportunity, with 43 percent of respondents – the highest segment – believing it empowers workers and allows them to focus on ‘higher-value activities.’

With the majority of manufacturing companies worldwide face similar challenges, including spiraling costs, increasing infrastructural complexity, and difficulty in changing or updating vital processes, agile applications that automate complex, manual processes and span your current IT systems to improve efficiency across the organization can give you the competitive edge you need.

Want to see how other manufacturing companies have handled these challenges using K2’s business process automation platform? Visiting our manufacturing solutions page to see specific examples of processes automated using K2, and stay tuned for future local events specific to manufacturing. Contact us to find out where the nearest one will be for you.