Almost half (47%) of manufacturing decision makers say that their costs have risen by over 20% due to greater investment in people, according to research findings by Visual Components, polling respondents in the UK, US, Germany and France. For almost one-in-five (18%) manufacturers, these costs rise to over 40%.
These figures are reflective of a widespread skills shortage in the market and the wider technology sector. Organisations are needing to pay more to bring in premium talent and invest in training to upskill current workers. The scale of the problem has been evidenced by over a quarter (27%) stating that between 21% and 60% of the workforce have departed the business since July 2021, in addition to normal levels of staff turnover. These resignation waves are leaving sizable gaps in the workforce that manufacturers are struggling to fill.
With costs mounting due to talent shortages, pressure on manufacturers is also being applied from elsewhere. Almost eight-in-ten (79%) state that the rise in energy costs has had at least a moderate impact in their operations. Additionally, 5% of organisations are also incurring over half a million (£/$/€) in costs due to a mistake in the manufacturing process.
44% of decision makers also say that between 21% and 60% of their operations are being held back from being updated with new technologies due to continued cost pressures, presenting a blocker to digital transformation strategies. This challenge arises at a time where customer expectations are also escalating, with almost two-thirds (60%) acknowledging this trend.
“Manufacturers are fighting the threat of cost rises from all sides, not least due to the shortage of skilled workers. To ease the financial strain, organisations need to focus on how they can help their talented people thrive and ensure retention and attraction of key individuals. Technology such as simulation software can support humans in the business with an intuitive and easy-to-use interface, allowing them to bring efficiencies to the wider organisation,” said Mikko Urho, CEO at Visual Components.
Currently, only 21% of organisations use simulation software to understand the financial impact on OEE, cycle times and/or production costs, highlighting its potential in helping manufacturers to reduce costs during turbulent economic periods.
[Image: Rafael Juarez for Unsplash]