The Year Ahead: Decoding 2023 for Manufacturers

Feb 20, 2023 1:14:00 PM . Julia Walsh

Strategic Digitization Investments and Workforce Intelligence Solutions for More Digital and Resilient Operations

2022 was a far better year for manufacturers than the preceding two years. But as the world emerges from the pandemic, 2023 is staring down the barrel of a global recession, increasing market volatility, and workforce churn. Manufacturers already understand the value of digitization and the promise it brings. The challenges 2023 poses will determine whether or not the investments they have already made are the right ones. 2023 will also determine what new investments they must make to ensure that digitization is completed end to end and encompasses their biggest asset: their workforce.

From a strategic viewpoint, operational resilience is essential not only to better business outcomes but also to survival itself. This operational resilience is a direct result of the steps organizations take to digitize their processes and partners. Furthermore, it stems from enhanced, real-time decision-making driven by facts and not gut feelings. In 2023, manufacturing leaders need to take a long and hard look at their existing digital infrastructures and ask three vital questions:

1) Is my value-creation process fully digitized?
2) Are my personnel equipped to make decisions based on intelligence from the available digital tools?
3) Is my frontline workforce equipped with a proper digital platform that can not only help them do their jobs better but also help manage the industry’s widespread voluntary workforce churn?

2023 Explained:

Deloitte recently published a report that explores the manufacturing industry outlook for 2023. In this post, we will examine the key takeaways from this report from a digitization perspective in order to guide manufacturing leaders toward taking the right steps in 2023, decisions that might shape the next five to ten years for their organizations. 

The report highlights that while manufacturers the world over have experienced a boom in demand and have had to increase their capacities, current trends of inflation, uncertainty, global logistics backlog, workforce churn, and stronger regulations all point to a more challenging year in 2023. Manufacturers need to invest in emerging technologies. Everything from AI to automation should be a point of discussion in boardrooms. Workforce churn is at its highest, and dealing with that will require retention and training solutions that go beyond the traditional methods of hiring experienced staff/workers and training them over a span of several years.  

Technology- Investing in technology is a key trend for 2023. However, manufacturers need to align their investments with strategic business priorities. Blind pursuit of automation or advanced AI deployment might be less fruitful than anticipated if the proper data and IT infrastructure base does not exist to support high-tech and advanced application deployment. 2023 should be a year of wise choices and building a solid base for automation and AI to thrive in an integrated application infrastructure that connects the value chain end to end.

Workforce Churn- Manufacturers are facing large-scale voluntary exits. The Deloitte report points out that while hiring remains at an all-time high in manufacturing, so do current vacancies. In 2023, manufacturers need to look at workforce digitization platforms as a strategic move to outmaneuver their competitors. The right frontline platform meets the need for highly skilled and trained manpower by augmenting the work of relatively new and inexperienced workers with a standard set of digital SOPs, tribal knowledge from existing process owners, and interaction with senior colleagues. This allows for faster development of new hires.  

The Smart Factory- Deloitte points out that one in five manufacturers is already working on some aspect of the industrial metaverse and incorporating smart-technology initiatives. This number will most likely grow to 100% of all manufacturers by the end of 2023. However, understanding the definition of a smart factory is perhaps more important than incorporating so-called smart technology within the process. A smart factory is not a fully automated plant where autonomous machines and robots work in sync with the supply chain and market-based inputs to align a manufacturing process. This might be the case in the future, but not today. Today’s smart factory is a place where better decisions are made by a workforce assisted by smart IT apps and where automation eliminates the need for frontline workers to perform risky and repetitive jobs. Manufacturing leaders should establish a clear path toward the smart factory of today before investing excessively in full automation and large-scale AI projects.

Supply-Chain Considerations and ESG- 2023 will require manufacturers to reevaluate their supply chains and current partner ecosystems. It will be essential to have local sourcing and tighter control of inventory. Manufacturers need to consider that supporting functions like logistics and warehousing also need to be controlled and digitized to ensure that the supply chain works at an optimal level. Again, this requires the aid of digital tools. Traditional SCM applications often focus on RM inventory, FG inventory, and WIP, and don’t focus on logistics and management within warehouses and DCs. These areas should not be neglected.

ESG efforts are also getting attention. This is in part due to manufacturers’ drive to improve, but it is also because regulatory bodies around the world are seeking nonfinancial data from industries. A best-in-class frontline digitization platform would be extremely helpful to manufacturers who are collecting ESG data and preparing for current and future regulations.

Webalo Insights:

2023 clearly seems like it will be the year of technology and IT upgrades for manufacturers. Our advice to manufacturers is to seek out base technology platforms first. Workforce-digitization platforms will be critical to developing resilient value-delivery ecosystems.

The trends highlighted by Deloitte place a lot of weight on emerging technologies and workforce crunch. Both of these factors can be addressed with the right frontline platform, which acts as a bridge between the enterprise and the shop floor while allowing workers to leverage fully digital forms, SOPs, and work instructions. This in turn  allows them to perform tasks faster and far more accurately without having to worry about ever putting pen to paper.

Having a solid base with contextualized process data is essential to unleashing AI and automation. Webalo does exactly that. It prepares an operation for the deployment of new tech and automation, thereby addressing the two most important strategic action items highlighted by Deloitte. The platform also acts as a training assistant and augments work by allowing existing employees to pass on their knowledge in the form of new-employee instruction. This neutralizes some of the effect of workforce churn. 

Having Webalo as a tool also creates a Workforce Intelligence Center that allows all process data to be collected, analyzed, and contextualized through the platform itself. When this happens, decisions made by workers are faster, better, and most importantly, data-driven. Our understanding of a smart factory in 2023 is just that–a factory aided by intelligent IT that allows for work to be done in a more controlled, proactive, and efficient manner.

Furthermore, meeting the requirements set forth by regulatory authorities requires process data and evidence of claims with proper digitally signed and time-stamped images and records. Webalo enables such data collection and record keeping while allowing frontline workers to create their own apps and dashboards to record and report data based on the requirements laid in front of them. This is true worker empowerment with a clear commitment to improving ESG performance.

2023 is the year to create the right foundation for the future. This should be the year manufacturers look to frontline workforce digitization as a stepping stone toward AI-driven, more automated, and smart manufacturing value chains. This is when changes must happen in order to create a better and more resilient future. Remember, a connected, intelligent frontline workforce is a prerequisite for a successful digital transformation!