The year 2020 was no short of surprises. From the global Covid-19 pandemic leading to many businesses’ shutdown to the trade wars between the USA and China, the effects of health, bilateral, and economic challenges have been profound.
As the year nears its end, there are ongoing concerns that a new wave of the pandemic is around the corner. What does this mean for the manufacturing industry? How does the advent of a vaccine shape up next year, and what trends will shape general manufacturing? In this article, we examine the trends that are likely to remain till next year and new developments that will arise as 2021 steadies its course. Here are eight predictions for manufacturing in 2021.
1. More “Work-From-Home”
In the last few weeks of December, news of a new strain of the Covid-19 virus that was 50 percent more contagious surfaced. The implication of this could be renewed lockdown laws. In the early months of 2021, we envision a sustained remote working culture that will see many engineers, product developers, designers, and entrepreneurs collaborate digitally to drive product prototyping and development.
2020 already served as a dry run for remote work, and we can expect an accelerated trend with improved productivity levels. For manufacturing plants, companies may elect to run shifts to physically monitor components that require human supervision.
2. Renewable energy
As more and more companies move away from fossil fuels towards renewable energy, 2021 will see a reduced dependent on hydrocarbons and a gradual tilt toward alternative energy sources. Companies like Microsoft, Apple, and Tesla have demonstrated increasing social and environmental awareness, and we can expect other companies to follow suit.
The reduction in renewable energy costs will also mean lesser overhead costs for modern factories and less dependence on oil and gas-driven supply chain elements. In summary, 2021 should bring more companies towards the global goal of electrification.
3. Financial strategy
If the unpredictable nature of 2020 is anything to go by, we can expect many manufacturing giants to adopt a strategy of limiting exposures, trade receivables, and capital investments. Most companies will look to boost cash and liquidity positions and invest in multiple ways to buffer their supply chain resilience. Until the economy stabilizes, we do not foresee major capital expenditures in the year 2021.
4. Local production
In 2020, supply and logistics during the Coronavirus were significantly challenging. Many companies had to make quick alternative arrangements with an emphasis on regional proximity. In 2021, we expect that companies will shift attention to local options rather than global suppliers and continue their habit of region-first and “made in” to hedge against other macroeconomic factors.
The advantage of local production includes lower tariffs, elimination of border and custom challenges, and avoidance of international trade wars, global shipping and logistic fees. There should also be a more direct and quicker communication line when working with home-based suppliers.
5. Quicker leadtimes
If there’s anything we’ve learned from 2020, it’s that anyone can do anything from anywhere. With Covid-19 crippling the healthcare, manufacturing, financial, and general economies of nations, scientists and engineers explored and established faster methods of making ventilators, testing kits, and face masks. 2020 saw projects that would have ordinarily spanned 24 months shrink into 18 – 20 month accomplishments.
In 2021, we expect more product developers, engineers, and machine shops to amp digital collaboration, drone delivery systems, automated transportation solutions, robotics, and self-driving production setups to help shorten leadtimes and product development cycles efficiently.
6. Additive manufacturing
Additive manufacturing solutions like 3D printing will continue to be on the rise in 2021. 3D printing proved indispensable for the medical industry, allowing for quick fabrication and printing of ready-to-use test kits, ventilator parts, and medical apparatus in the overwhelming wake of the pandemic.
During the lockdown, many product experts and teams were able to keep the work going by using 3D printing to prototype and mock-up their products right from the convenience of their homes.
We expect more and more people to own 3D printers that are user-friendly, safe, and convenient for use at home to harness the power of additive manufacturing, provide on-the-go changes and constantly collaborate in different phases of product development. Companies that embrace digitization, cloud computing, and the internet of things (IoT) along with 3D printing, will find themselves equipped to navigate the challenges that may arise in 2021 and the nearest future.
7. Supply chain diversity
For companies who may not have the privilege of shifting to local/regional suppliers, supply chain diversity will be vital to delivering the robustness of sourcing that will drive their business forward. If you are a business supplier yourself, employ some form of variety to ensure that you’re never caught off-guard by issues like lockdowns in certain regions. Diversifying the supply chain for businesses will not only ensure the availability of raw materials but help to mitigate the risk of shortages, ensure price competitiveness and create a sense of competition that will keep your business partners on their toes.
8. Post-Covid-19 recovery
Generally, businesses and manufacturing outfits can have an optimistic view of an economic rebound next year. While the extent to which things will pick up remains to be seen, the availability of several vaccines to battle the Coronavirus will help cushion the effect of economic recovery.
Many companies that have had their bottom-line collapse in 2020 will have pent-up demand that will lead to massive gains in their books. Some sectors will recover faster than others, while the year should end on a generally positive note for everyone in product development, automotive, engineering, electronics, aerospace, and consumer goods market.