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3 things manufacturers must focus on to thrive in 2023

To date, the Fourth Industrial Revolution has been marked by a deluge of new, and disruptive, technology innovations. In many cases, manufacturers have merely tried to survive this onslaught by either adapting to the changing environment, or piloting and adopting these solutions at speed when possible.

As we head into 2023, however, we are seeing that the ability of industrial players to realize the potential offered by the Fourth Industrial Revolution will depend on how effectively they can embrace three core tenets: 1) a new long-term focus on resilience as the primary driver of productivity, growth, sustainability and inclusivity; 2) technology adoption and workforce empowerment at scale; 3) ecosystem collaborations that unlock new avenues for capturing and delivering value to a much broader stakeholder community.

1. Resilience enables growth, sustainability and inclusivity

Manufacturing and supply chains are the beating heart of industrial societies, so we need them healthy and resilient to tackle the challenges we face today – including poverty, the climate crisis, and current geopolitical tensions. Resiliency is the new foundation for the future and health of our industrial systems, which can then enable growth, sustainability and inclusivity. If we want to fix inequality and sustainability, we need to fix manufacturing’s ability to be resilient and contribute to the well-being of our economies.

Central to any industry’s ability to manage shocks, is the structure of its supply chains. While reactive calls for protectionist policies continue to rise, value chains are – and will likely remain global – but this doesn’t mean they won’t change. We are already seeing a restructuring of these global value chains as companies seek to find a new balance between manufacturing in the places where they can produce the highest quality at the lowest price, with the risks that come from being over-reliant on single supplier sources.

This rebalancing won’t happen in one massive shift, but rather in the form of degree-shifts as global companies reinforce their local manufacturing networks. Companies will find a new way to leverage both macro supply chains that allow for all the benefits that come with scale, and the need to invest in local partnerships that allow for regionalization of supply to enhance resilience, as well as the ability to meet consumer demand for more personalized product offerings.

2. From speed to scale: the next step in technology adoption and workforce empowerment

Adopting technologies has always been a tricky balancing act for manufacturers. They must constantly weigh the potential that could be unlocked through current technology innovations against the resulting need to upskill their workforce and put it at the centre of the transformation [insert link], all while being prepared for the innovations of tomorrow.

While most manufacturers are still focused on looking at specific use cases and how they might roll them out as quickly as possible in a single location, we are seeing some manufacturers who seem to have been reading ahead to a new phase of the Fourth Industrial Revolution. Over the last four years, the Forum’s Global Lighthouse Network has sought to identify the most advanced manufacturing facilities and value chains in the world – there are now 114 Lighthouses [insert link] – including 10 Sustainability Lighthouses.

Of those 114 Lighthouses, we are beginning to see front-runners that have not only one, but multiple Lighthouses in this network as they recognize the multiplier effect that accompanies digital transformation of their facilities around the world. Johnson & Johnson, for example, has 10 Lighthouses in eight different countries. P&G and Unilever each have six lighthouses in the network spanning an additional eight countries.

3. Collaborations of the future

As the world becomes increasingly digitally interconnected, the ability to thrive in the future will be intrinsically linked to a company’s ability to collaborate in new and more effective ways across three critical stakeholder groups: 1) their core supply chain partners; 2) their broader industrial ecosystem, including supply chain partners, but also competitors and complementary industry players; 3) public sector stakeholders.

Most companies, even those who have been successful at scaling new technologies across multiple production sites around the world, still struggle to effectively drive collaborative innovation and share relevant data with their supply chain partners. We are however seeing new collaborations forming that enable collective action on shared ambitions like achieving net zero value chains [insert link]. One such example is the ESTAINIUM Association, that, among other things, is helping to build an infrastructure that would allow companies to securely share carbon data with supply chain partners without putting their intellectual property at risk.

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