CHICAGO (May 15, 2023) – Nearly every day, a new issue arises that adds to both domestic and global market volatility – such as inflation, bank failures, recession concerns, talent scarcity and geopolitical tensions. And that’s on the heels of a pandemic that unexpectedly forced work stoppages, supply chain constraints and other unforeseen issues. So, it’s not surprising that the manufacturing industry is feeling that impact of the turbulent market conditions, with 55% of manufacturing companies reporting that they’re currently dealing with volatility within their organizations, according to the Crowe Executive Outlook Study, a joint research project from Crowe LLP and Forbes.
In the study’s debut report, “The Unlikely New Frontier of Enterprise Growth: Why Innovation Leaders Pull Ahead in Times of Volatility,” executives across industries weighed in on current and future challenges they are facing and what their organizations are doing to address them. Feedback was collected from 1,001 C-suite and business leaders and focused on eight industry verticals. 125 respondents identified as part of the manufacturing industry, with 62% of that group reporting as primary decision-makers.
On a positive note, 60% of manufacturers view volatility as an opportunity and 72% are focusing on engaging their people and improving their processes and technology to turn disruption into opportunity. “The pandemic forced manufacturers to get creative, diversify their supply chains and adopt new technologies like automation and robotics to address the labor shortage head-on, which had a profound effect on their current operations,” said Andrea Meinardi, managing partner of the Crowe manufacturing services group. “However, even though prices have stabilized, and the cost of freight has dropped significantly, manufacturers are now dealing with raised interest rates and clients with higher-than-average inventories on hand, which makes their purchasing unpredictable.”
By 2025, 58% of manufacturers expect their organization will go through a significant business transformation, compared to only 53% of all survey respondents. Areas such as industry consolidation, staffing constraints, and rising costs of energy and materials are forcing manufacturers to rethink their business models and operations. “Leadership is doing everything they can to make their floors more efficient in order to increase units per hour. One solution they have been implementing to increase productivity is automation, which is a big up-front investment, but hopefully one that brings sustainable returns,” Meinardi added.
According to manufacturing respondents, the sources of business volatility that their organizations are addressing now and expect to address by 2025 include:
“Coming off the past few years and into today, I certainly understand why manufacturing executives would hope for decreases by 2025 in dealing with volatility in financial risk, talent, supply chain and other factors; however, that could be a rosy perspective. The manufacturing industry has plenty of experience weathering downturns, reinventing itself, and coming out stronger, but 2025 will be here before we know it, and I imagine many of these issues will still be top of mind at that time,” added Meinardi.
For more detailed findings or more information about the Crowe Executive Outlook Study, view the report, “The Unlikely New Frontier of Enterprise Growth: Why Innovation Leaders Pull Ahead in Times of Volatility.”
About the Crowe Executive Outlook Study
In partnership with Crowe LLP, Forbes surveyed 1,001 executives from organizations with at least $500 million in annual revenues. Respondents represent companies across eight industry sectors – banking, government, healthcare, insurance, manufacturing, pharma/biotech, private equity, and technology, media and telecommunications. Most respondents, 71%, are C-suite executives, board members, or partners. Three-quarters (75%) of respondents are primary decision-makers.
Crowe LLP is a leading public accounting, consulting and technology firm with offices around the world. Crowe uses its deep industry expertise to provide audit services to public and private entities. The firm and its subsidiaries also help clients make smart decisions that lead to lasting value with its tax, advisory and consulting services. Crowe is recognized by many organizations as one of the best places to work in the U.S. As an independent member of Crowe Global, one of the largest global accounting networks in the world, Crowe serves clients worldwide. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.