While 2018 has been a banner year so far for equipment manufacturers, the long-term future of the industry and the markets it serves is – and likely will remain – far less certain.
A number of issues have presented themselves this year, and many indicate economic growth for the industry will not continue into 2019 and beyond. Whether it’s the future of NAFTA, the potential for more stringent immigration policies limiting labor availability, or the ever-increasing fear of trade protectionism as a result of recently implemented tariffs, questions and concerns abound for the heavy equipment industry.
As a result, equipment manufacturers must be willing to ask themselves tough questions regarding their future, as they will most certainly will affect their businesses in some form or fashion moving forward. But more importantly, companies need to be able to definitively answer these questions in order to make strategic decisions with confidence and ensure continued success for both their own operations and the industry as a whole.
Let’s take a look at three questions that should be on every manufacturer’s minds…
1. How do we effectively attract, engage, retain and replace skilled workers in our organization? – The skilled worker shortage is the biggest challenge facing manufacturing today, and it’s also beginning to reach a crisis mode in the construction industry.
According to the Manufacturing Institute and Deloitte, roughly 22 percent of the skilled manufacturing workers employed today (about 2.7 million employees) will retire at some point in the next 10 years. With about 3.4 million workers needed due to industry growth, manufacturing is looking at a shortage of 2 million employees.
But simply attracting skilled workers won’t be the only issue manufacturers will be forced to grapple with moving forward. Developing employees within their own organization and turning them into the industry leaders of tomorrow should also be a top priority for companies today.
Addressing the skilled worker shortage is certainly a tall task, but it’s certainly one the industry cannot afford to ignore. Simply stated, manufacturers must be committed to establishing work environments within their organizations where employees can obtain the skills they need to do the job – both now and in the future.
2. Are we aware of changing regulations and developing standards, and how they could affect our business?
Standards play a role of tremendous significance in the equipment industry. Without them, companies would be forced to develop, design and manufacturer several different iterations of the same piece of equipment or component in order to comply with regional or national regulations.
For example, starting on Aug. 30, 2018, California’s Proposition 65 regulation will bring many products into scope. Prop 65 is a huge issue for equipment manufacturers right now, as it requires the public to be informed when a certain chemical is present above a designated threshold. As of now, there are more than 850 Prop-65 listed chemicals, and Aug. 30, the warning requirements change dramatically.
Manufacturers need to be aware of the implementation of certain regulations (like Prop 65) to ensure they can be competitive in different markets. They should also stay abreast of the development of standards to ensure offerings from different markets can be directly compared, facilitating entry by companies into new markets and assisting in the development of fair global trade.
3. How do we efficiently capture machine data and use it to our advantage? – A consequence of an increasingly connected world is the incredible amount of data being generated that now has to be both processed and managed.
However, thanks to machine-learning algorithms, applications and platforms, manufacturers are now able to develop new business models, enhance their product offerings, and optimize their operations.
In addition, the information gleaned from equipment can be incredibly useful to companies trying to improve their relationships with customers. Because end users often lack the time and resources to harvest and interpret equipment data, they look to OEMs and dealers to do it for them.
By collecting and processing machine data and providing their customers with relevant and useful operational information, manufacturers can better meet the needs of those who use their equipment and positively impact customer satisfaction and loyalty.
Knowledge is power, and manufacturers need to be able to gather, process and manage machine data in order to advance safety, efficiency and productivity. But more importantly, it they need to use the data to determine the informational needs of end users and address their customers' needs more effectively.
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