In recent years, technology has caused paradigm shifts in every industry, perhaps none more so than manufacturing. The emergence of automation and artificial intelligence combined with COVID-19 and increased government regulation has created rapid digitization in manufacturing.
At SEG, we stay up-to-date on industry trends to offer expert insights for our clients. To keep a strong pulse on manufacturing SaaS trends, we partnered with manufacturing and industrial asset technology expert Paul Lachance to release our most recent Manufacturing Software Report.
Our findings analyze the state of the manufacturing technology space in 2022. More so than any other time in the recent past, the U.S. is experiencing a wave of expansion within manufacturing that is driven by a series of tailwinds. In this post, we examine how these tailwinds are accelerating the rapid adoption of software in manufacturing and the ways this trend improves efficiencies across the industry.
Major Trends Driving Software Adoption in Manufacturing
Technology supporting the manufacturing ecosystem has received heightened attention as international supply chain disruptions pulled forward the already-increasing need for software to support the digitization of the industry.
In a hyper-connected world, supply chains functioning without modern SaaS solutions become increasingly defunct and, worse, horrifyingly inefficient. An industry that relies on the “just-in-time” manufacturing ethos cannot reliably function without the help of modern software and other high-tech solutions.
Some of the major tailwinds impacting the manufacturing industry include a combination of policymaking and unprecedented events.
- Reshoring: Along with the upheaval caused by the COVID-19 pandemic, reshoring became seen as a smart business move for U.S. manufacturers. Relying more on U.S. suppliers and diversifying operations shored up supply chains against disruptions and allowed companies to further implement lean operational processes, creating larger adoption opportunities for SaaS providers.
- The U.S. Infrastructure Bill: Recent and upcoming federal legislation holds the potential to strengthen existing manufacturing hubs and build continued resilience. The Infrastructure Bill encourages new construction across the U.S. and emphasizes the important role American manufacturers will play in supplying parts and materials.
- “Made in America” Executive Order: This order requires that federal dollars be spent on American manufacturers rather than foreign entities. Leaning into the same principles motivating reshoring, the order encourages the creation of new supply chain options that are less reliant on existing global networks.
- “America Competes” Legislation: This legislation (currently pending passage in Congress) further shores up U.S. manufacturers against international competition with more domestic production of semiconductors.
The positive fruits of these initiatives have already started bearing out with hundreds of new U.S.-based factories opening within the past year. Government investment in infrastructure has led to new plans for clean energy production, better and cheaper utility services, and upgraded transportation systems. Like the post-World War II period, the U.S. is making a concerted effort to make domestic manufacturers a pivotal part of its economic and political policy – a push that only has positive benefits for the industry, including software providers supporting manufacturing.
Software Enables Manufacturing Businesses to Adapt
Digital transformation helps businesses adapt in changing times as it promotes lean processes and mitigates costs via automation and just-in-time product management. The important takeaway for manufacturers is this: as of 2022, the best way to shore up a manufacturing operation in the face of economic flux and external events on the international stage is to utilize SaaS-based manufacturing technologies.
The unprecedented movement toward new tech within manufacturing is not without its challenges. An aging workforce and technical skill gap have made it difficult for employers to find qualified, experienced workers. Between now and 2030, experts are predicting 2.1 million unfilled manufacturing positions – a trend that obviously makes keeping up with demand difficult for companies.
Similarly, the historic levels of resignations following the COVID-19 pandemic’s peak upended multiple industries and made hiring an uncertain prospect. These trends mean that manufacturers are relying more than ever before on SaaS technology solutions to fill the gap and streamline processes in the most efficient ways possible.
Perhaps the most important lesson of the past few years has been the pivotal need to upgrade U.S. manufacturing technology from its previous antiquated state. With supply chain disruption comes inflation, and recent economic woes are a direct reflection of both. Although manufacturers certainly can’t predict the future, creating a resilient network supported by SaaS-enabled technologies gives companies the best bet of weathering unexpected events and keeping America’s economic backbone strong.
Types of SaaS Software That Help Streamline Manufacturing
Manufacturing Operations Management (MOM) technologies refer to a group of several SaaS categories that manage the complex operations of manufacturing and industrial organizations. For example, CCMS software works to calibrate instrumentation and general maintenance needs in an automated and streamlined fashion. Rather than having to rely on manual logs of system updates and equipment replacement needs, CCMS platforms do this work for manufacturing companies and free up employees’ time for other tasks.
Maintenance is a key part of a manufacturer’s overall profitability. Cost-controlling measures that alert managers to potential stock-outs, compliance issues, and downtime can help stabilize production rates and strengthen businesses against unexpected upheavals. In many cases, automated compliance software is now a requirement, particularly for companies receiving federal funding. CMMS and EAM software can help manage assets, report inefficiencies, and complete work orders more consistently and quickly than traditional manual processes.
Other types of MOM software include MES (Manufacturing Execution Systems) which tracks the processing of raw materials to finished goods, QMS (Quality Management Systems), solutions that document product delivery to increase customer satisfaction, and WMS (Warehouse Management Systems), platforms that optimize warehouse functionality and manage distribution centers. At the core of all these systems is their ability to optimize operations and create closed-loop, resilient manufacturing processes.
Ultimately, Industry 4.0 technologies like MOM SaaS solutions not only shore up companies for unexpected upheavals but also help increase profitability. Studies show that businesses with an active CMMS platform see a 28.3% increase in productivity, 20.1% reduction in equipment downtime, and 19.4% cost savings.
U.S. manufacturers can ensure their operations remain cutting edge by taking advantage of a rapidly growing set of software tools. SaaS companies that support the manufacturing industry are needed to streamline operations, offset labor and facility costs, and meet the reshoring demand. In short, manufacturing is “hot” right now, and your manufacturing SaaS business is in high demand. To learn more about how your company can take advantage of these manufacturing tailwinds, contact SEG and reach out for a consultation today.