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The Future in the Making. After four years of unprecedented global disruptions, the industry has redefined what battle-hardened, world-class manufacturing and supply chain teams need to succeed in 2024 and beyond: Greater speed and efficiency, higher revenue, lower costs, and more resilience and agility than ever before. For some, that means integrating AI solutions into operations. Others are leveraging regionalization to find some kind of equilibrium. These teams face numerous pressures ranging from election uncertainty to heightened concerns about trade wars and the global economy.
As in prior years, optimizing supply chain management and minimizing risk is the focus of most manufacturing leaders in 2024.
However, spurred by efficiencies identified using AI and other technologies and some reduction in barriers to new product innovation, there are signs that the industry has found something closer to firmer ground in its quest for further stability and predictability.
"The last four years have redefined what top performing operations and supply chain teams need to succeed in a tough economic environment.”
Dave Evans
CEO, Fictiv
This election year, economic challenges most impact company strategy, labor costs, and shortages.
89%
say they are concerned trade wars might escalate in the next few years.
47%
report economic headwinds as critical to overall company strategy.
39%
note that labor costs and shortages remain a concern for manufacturing leaders.
21%
expect election uncertainty to impact their strategy.
Supply chain management is entrenched at the forefront as barriers to innovation ease.
54%
say improving manufacturing and supply chain visibility is the top business priority for the third year.
48%
report improving supply chain resilience and agility comes in a close second.
15%
report they have no barriers to innovation—its highest level in four years.
86%
are considering global tensions in long-term planning.
Last year’s enthusiasm for AI has been operationalized and is substantially impacting the industry.
88%
of respondents have implemented AI in manufacturing and supply chain operations.
87%
of respondents agree that “Implementing AI into manufacturing is vital to my company's future success.”
78%
report that the long-term impact of AI will enable a reduction in planned hiring.
84%
say AI implementations are currently providing value.
Results show continued prioritization of sustainability goals and programs.
77%
report that the importance of sustainable manufacturing is increasing at their companies.
53%
have embedded sustainability into their company goals.
42%
are prioritizing investments in sustainable manufacturing, which has been holding steady since 2023.
45%
have developed or adopted standardized reporting models.
In 2024, the global manufacturing industry is navigating significant economic challenges, including supply chain disruptions, geopolitical tensions, and labor shortages. These factors influence decision-making and strategic planning at every level. Economic fluctuations in consumer demand can swiftly alter production schedules, investment plans, and market strategies.
Given the instability of the last few years, it’s not surprising that concerns about the economy continue to impact company strategy.
Survey respondents report that “economic headwinds” (inflation, interest rates, and the risk of recession) are most likely to influence their 2024 strategy, along with labor costs and shortages (39%), increasing competition (33%), and pressure to drive profitability (30%). Driven by a volatile economy and shifting company goals, companies are looking for ways to navigate significant challenges. These trends are consistent with prior years.
“In the past four years, we’ve noticed a big shift away from growth at all costs to revenue at all costs.”
Sabrina Paseman
General Partner,
Omni Venture Labs
It’s an election year in the U.S., but uncertainty around the election outcome only impacts a modest percentage (21%) of company strategies. Still, 89% are either “somewhat” or “very” concerned about the possibility of escalating trade wars in the next few years, and 86% say global tensions are a consideration for long-term supply chain planning. These findings make sense, given that both candidates have a track record of trade policies that impact the manufacturing sector.
It’s also apparent that the broader geopolitical uncertainty of the last few years persists.
This election year, economic challenges most impact company strategy, along with labor costs and shortages.
In light of these concerns, it’s not surprising that supply chain visibility is the number one business priority for the third year in a row, followed by supply chain resilience and agility. After all, knowing where materials, goods, and parts are within the supply chain enables leaders to optimize each project and respond quickly to potential disruptions.
“With global trade increasingly susceptible to extreme weather and regional conflicts (e.g. Houthi attacks on container ships in the Red Sea), supply chain visibility and agility are as important as ever."
Andy Sherman
GM-U.S., Fictiv
“Manufacturing and supply chain leaders are focused on improving supply chain resilience. Improving supply chain visibility and, by extension, efficiency are keys to making that happen.”
Sabrina Paseman
General Partner, Omni Venture Labs
Despite the focus on supply chain priorities, companies haven’t lost sight of the importance of clearing speed bumps in the path of new product innovation and introduction (NPI). While barriers to new product innovation are a persistent theme between 2021 and 2024, there are some signs of hope here. It seems that improvements to rigid internal supply chain processes have contributed to the fewest reported barriers to NPI in at least 4 years.
Barriers are still a concern, however. Specifically, sourcing fast, high-quality options to manufacture low-volume builds (43%), slow feedback loops with manufacturing partners that extend production time (41%), and friction created by poor cross-functional visibility into projects (37%).
We see additional improvements in the time engineers spend on vendor sourcing, management, quote, and order activities every week. There’s a notable decrease in the percentage reporting 8 or more hours, with the most significant percentage spending between 4 and 6 hours per week doing these tasks. The hope is that as more technologies take hold, automation will help defray some of the time spent on procurement.
To solve similar challenges, many manufacturing leaders are turning to on-demand manufacturing (72%) and/or are actively evaluating technology solutions to increase company-wide operational efficiency for new product development (77%). This speaks to the general drive to find more efficiencies overall, as well as the need for lower operational costs associated with manufacturing and supply chain management.
The benefits of using on-demand manufacturing pair well with top business priorities, with most respondents reporting faster development cycles (57%), improved manufacturing quality (49%), and improved transparency and visibility (48%).
Another benefit is the ability to shift production to a variety of manufacturing regions around the world. Let’s look at how regionalization strategies are evolving this year.
"These results show that on-demand manufacturing offers greater agility, cost-effectiveness, and responsiveness to market demands."
Uday Shenoy
GM-India, Fictiv
It appears the momentum towards on-shoring caused by recent years’ global disruptions, trade policies, and other economic drivers has slowed. While increasing U.S. manufacturing (on-shoring) remains the leading supply chain strategy for the third year (66%), it has fallen substantially since last year. At the same time, North American production (near-shoring) has increased again this year (53%). In this case, near-shoring is defined as manufacturing in Canada and Mexico. Diversifying global manufacturing operations (off-shoring) has also gone up slightly since last year.
“Onshoring is important from a sustainability standpoint, but it’s still costly and just isn’t within the realm of economic possibility for many companies.”
Sabrina Paseman
General Partner,
Omni Venture Labs
“We believe companies are trying to make their supply chains more resilient to potential geopolitical volatility, in part by moving more manufacturing to North America.”
Valerie Shen
Partner & Chief Operating
Officer,
G2 Venture Partners
When asked where they’re most likely to outsource, most manufacturing leaders indicate Mexico and Latin America (47%), with additional interest shown in Northeast Asia (36%) and Eastern Europe (31%).
Another area of focus for survey respondents is the scarcity of supply chain resources. In fact, 81% identify insufficient budgets, high workforce costs, and labor shortages as hindering effective supply chain management. Coupled with the identified priorities around supply chain visibility, this is a crucial area for continued improvement. And companies are turning to novel solutions to address these shortages.
The top business priority is improving manufacturing and supply chain visibility, followed by resilience and agility.
INDUSTRY INSIGHTS
We surveyed over 178 leaders in engineering, supply chain, manufacturing, and product development to identify developing trends and gather key insights — so you can succeed in 2024 and beyond.
By signing up, you agree to our Terms of Use and Privacy Policy. We may use the info you submit to contact you and use data from third parties to personalize your experience.
Last year, excitement about AI and other technologies drove some notable developments, including implementing and applying AI to manufacturing and supply chain operations.
Building on last year’s excitement around new technologies and spurred by continued challenges with labor costs and shortages, improving supply chain operations has become the leading focus of AI implementations for most of the industry. This makes sense given that 84% of leaders say implementations of AI are currently providing value, although they’re split on the degree of value provided.
“We have historically believed that manufacturing is an old-school industry that is harder for new technology to break into. Despite this, data in this year’s State of Manufacturing Report indicates manufacturing leaders are broadly recognizing the importance of AI.”
Valerie Shen
Partner & Chief Operating
Officer,
G2 Venture Partners
When rating the value they receive from the use of AI in manufacturing and supply chain operations, 43% state the value is “high” while 41% report it’s “marginal.” In 2024, it’s clear that expectations for AI have become implementations that are already generating some value.
87% report that “implementing AI into manufacturing is vital to my company’s future success.” And AI is the second most cited impact on companies’ 2024 strategies (45%). Supply chain management, product design, and quality control and inspections top the list of implementations.
Part of the ongoing excitement about AI relates to finding a solution to persistent labor shortages. AI can help fill some of the labor gaps by automating routine, time-consuming tasks and freeing skilled workers to be more productive and innovative. At the same time, the majority of companies report AI is already enabling hiring reductions, with 78% reporting that AI will help them reduce planned hiring and/or will impact hiring in the next two years. The long-term impacts of AI remain to be seen.
“The value of AI is the ability to take on rote, mechanical tasks that happen in manufacturing and supply chain management, and refocusing individuals on doing higher-level, more productive, creative work.”
Dave Evans
CEO & Co-Founder,
Fictiv
Leaders continue to be excited about AI but have moved toward implementation- especially in supply chain operations.
Given the continued economic and workforce concerns highlighted since last year’s Sustainability in Manufacturing Report, it’s notable that prioritizing investments in sustainable manufacturing remains steady for a second year for 40% of respondents (fig. 4, Supply Chain Risk Management.)
Smaller companies still trail their larger peers, and there’s a continued rounding-out of the stated importance of sustainable manufacturing since 2021, with fewer reports of it increasing to the highest levels of corporate history and a significant increase in those who report no change in importance.
Compared to last year, this year’s responses indicate a better consensus among executive leadership as functional leaders tackle the realities of championing sustainability in a challenging economic environment.
The tension between sustainability aspirations and the reality of the true costs is a factor that has huge implications for the ability of companies to achieve their sustainability goals.
“From a carbon reduction standpoint, on-shoring or near-shoring makes sense.
From a cost perspective, it might be more economical to manufacture in China or Mexico. That’s what most supply chain leaders are confronting - the tension between sustainability and cost.”
Nate Evans
CXO & Co-Founder,
Fictiv
Whereas last year’s survey focused on challenges, we wanted to learn more about how companies are tackling their sustainability goals this year. Although only 34% have set a net-zero or carbon reduction goal, embedding sustainability in company values (53%) and developing a formal plan (52%) are critical to progress. In contrast to the 31% who reported having “no practical plan” last year, 45% of this year’s respondents have developed or adopted standardizing reporting models.
“It’s clear that companies are setting sustainability goals and taking action, and the vast majority feel sustainable manufacturing is increasing in importance.”
Valerie Shen
Partner & Chief Operating
Officer,
G2 Venture Partners
Results show continued prioritization of sustainability goals and programs.
Supply chain and manufacturing leaders face persistent challenges and economic uncertainty, which is heightened by election year considerations. Yet there are reasons to be optimistic, including the increased availability of technology solutions like digital, on-demand manufacturing and AI.
Gaining visibility, resiliency, and agility and embracing new technologies to solve manufacturing and supply chain challenges is critical to success.
“To meet their increasingly aggressive revenue and cost targets, supply chain teams need to be agile, find operational efficiencies, and utilize technology to surface opportunities for savings in 2024. It’s clear we’re at an inflection point where those embracing change will win!”
Dave Evans
CEO & Co-Founder,
Fictiv
Every year, we ask experts to offer insights and analysis of the State of Manufacturing findings. This year we were assisted by the following:
Valerie Shen
Partner & COO, G2 Venture Partners
Dave Evans
CEO & Co-Founder, Fictiv
Sabrina Paseman
General Partner, Omni Venture Labs
Nate Evans
CXO & Co-Founder, Fictiv
Uday Shenoy
GM-India, Fictiv
Andy Sherman
GM-U.S., Fictiv
This is Fictiv’s ninth annual report conducted with Dimensional Research. The report surveyed 178 Director-level decision-makers who work in engineering, supply chain, R&D, and digital innovation roles for companies that produce consumer electronics, medical devices, automotive, industrial and robotics, aerospace, or energy.
Fictiv is a global manufacturing company that simplifies sourcing for custom manufacturing, from prototype to low-volume production. Through its highly-vetted manufacturing network, AI-powered technology platform, and global operations centers across the USA, Mexico, India, and China, Fictiv delivers fast, high-quality custom manufacturing services from quote to delivery. Fictiv’s capabilities span the full mechanical bill of materials, including Injection Molding, Compression Molding, 3D Printing, CNC Machining, Urethane Casting, Die Casting, and Sheet Metal. To date, Fictiv has delivered more than 30 million commercial and prototype parts for early-stage companies and large enterprises alike, helping them innovate faster, free up precious resources, and drive profitable growth.
Dimensional Research® provides practical market research to help companies make smarter business decisions by delivering actionable information to reduce risks, increase customer satisfaction, and support growth. Whether launching a new product into the marketplace or desiring fresh insights from buyers, our research services help companies gain a clear understanding of customer and market dynamics.
G2 Venture Partners is a venture and growth firm investing in transformative technology companies, like Fictiv, at their inflection points building a sustainable future. We support entrepreneurs who are unlocking new paths to environmentally and socially responsible economic growth.
Omni Venture Labs is a “first check” DeepTech VC. Led by former Apple product and manufacturing experts, our mission is to invest at the frontier of Sustainable Industrials + AI, Robotics, and Automation.
INDUSTRY INSIGHTS
We surveyed over 178 leaders in engineering, supply chain, manufacturing, and product development to identify developing trends and gather key insights — so you can succeed in 2024 and beyond.
By signing up, you agree to our Terms of Use and Privacy Policy. We may use the info you submit to contact you and use data from third parties to personalize your experience.
Fig. 1: Macroeconomic trends impacting 2024 strategies
Fig. 1: Macroeconomic trends impacting 2024 strategies
fig. 2 Concern about potential trade wars
fig. 3 Global tensions & supply chain planning
fig. 4 Top business priorities 2022 - 2024
fig. 4 Top business priorities 2022 - 2024
fig. 5 Barriers to new product innovation
fig. 5 Barriers to new product innovation
fig. 6 Engineering time on sourcing activities
fig. 7 Technology for efficient product development
fig. 8 Use of on-demand manufacturing partners
fig. 9 The benefits of using on-demand manufacturing
fig. 9 The benefits of using on-demand manufacturing
fig. 10 Regionalization strategy 2022 - 2024
fig. 11 Regionalization strategy geography
fig. 12 Lack of supply chain resources
fig. 13 Importance of AI in manufacturing
fig. 14 The value of AI in manufacturing and supply chain operations
fig. 15 2023 expectations of AI in manufacturing
fig. 16 2024 implementation of AI
fig. 17 Sentiment toward AI on your business
fig. 18 Importance of sustainable manufacturing
fig. 19 Actions to achieve sustainability goals
fig. 19 Actions to achieve sustainability goals
