Addressing 5 discrete manufacturing industry trends and 11 change drivers

If you’re in the discrete manufacturing industry, you’re all too aware of the pressures for factory digitalization to adapt for Industry 4.0. Even as we emerge from a global pandemic, the need to innovate is only intensified with a supply chain that’s failing you, heightened customer expectations, the ongoing struggle to find skilled labor, not to mention increased raw material costs, company consolidations and increased global competition. 

In Part 1 of our new Manufacturing Series, we touch on 5 industry trends and the important change drivers that must at least be considered. You can also download the e-book here for a deeper dive into the solutions. 

1. Factory Modernization 

Optimized operations and productivity through unified data and processes 

One of the biggest hurdles to growth and innovation for discrete manufacturers is the inability to connect legacy technology and processes with modern solutions. Following in the footsteps of other industries like retail and finance, manufacturers are finally starting to tear down data silos and realize the potential of a fully connected business, one where all of an organization’s data is aggregated into a central database, which both receives and sends data across the organization, in real-time, wherever it’s needed. 

From Bills of Material (BOM) to inventory management, production planning and scheduling, supply chain management and part tracking, quality control and analytics, business leaders need access to real-time data and a global view across the business to make intelligent decisions. 


Automation across factory and warehouse floors has allowed manufacturers to shorten production times, decrease product defects, and reassign their workforce to more value-added jobs. That was a giant first step toward the factory of the future. Now, as more sophisticated technologies become more accessible, they are transforming manufacturing into a highly connected, intelligent, and ultimately, more productive industry. 

The man-powered shop floor of the past is being replaced by smart manufacturing facilities where tech-savvy workers, aided by intelligent robots, are creating the products of the future. 

New technologies like cloud, IoT and AI 

The world is increasingly connected through the IoT (Internet of Things). There’s no escaping it and today’s discrete manufacturers have no choice but to connect and be technologically prepared to adapt and keep up with innovation. As technological advances in cloud computing, remote sensors and connectivity improve, it’s becoming faster and easier for manufacturers to integrate the management of industrial technology and integrate new systems with their legacy systems. 

With a resilient and connected business infrastructure on the cloud, they will be far more advanced to optimize processes and operations for growth, adapt products for changing customer demands, and improve sustainability. 


2. Channels Digitalization

Unified commerce experiences with operations 

Factory modernization isn’t just about connecting systems, it’s about building relationships with suppliers, partners, customers, and employees. A single, unified view across the value chain allows manufacturers to become proactive rather than reactive, allowing them to adapt faster to uncontrollable and unforeseeable changes in supply and demand, as per the ongoing repercussions of the Covid-19 pandemic. 

Unified data also provides manufacturers the ability to track customer interactions across channels and capitalize on changing needs and expectations, as well as be more responsive and pre-emptive in terms of service and repairs. This unified connectivity eventually becomes a bi-directional feedback loop to further optimize operations and processes, and so on. 

Customer service as a differentiator 

Demands on manufacturers are greater today than ever before. Customers want higher quality products at lower costs, and they expect shipping to be faster and cheaper. Not only that, but they’re also now requesting greater transparency into inventory and operations.
 All that aside, it often comes down to quality and speed of service to make or break repeat business, with a majority of customers admitting switching to a competitor because they offer better service. Here are 5 ways to differentiate your customer service

To meet these rising customer expectations, manufacturing leaders must optimize their processes for speed and efficiency. To accomplish this, they are turning to a modern CRM like Microsoft Dynamics CE that makes it easier to gain insight into operations, deliver better and more responsive service, respond flexibly to changes in customer demands, and improve customer satisfaction and confidence in product quality. 

3. Supply Chain Intelligence

Supply chain management 

Supply chain management is no longer just a back- office concern. Today’s manufacturing leaders face new challenges, contending with a supply chain that’s evolving from a linear model to a dynamic network model powered by interconnected processes and systems. Fortunately, ubiquitous connectivity and computing are improving communication across the supply chain, revolutionizing how manufacturers approach planning, inventory management, storage, and fulfillment. 

Leaders are also trying to figure out what to do with the flood of real-time and near-time data that’s now available to them thanks to advances in IoT and AI. Emerging technologies offer the ability to capture data from each phase of the value chain in that the question on manufacturing executives’ minds is no longer “What can we track?” but rather “How do we make the best use of this data?” 

Intelligent and transparent inventory management 

The business of manufacturing is becoming more complex by the day, and for many manufacturers, inventory management can pose a serious challenge. Manufacturers must manage orders coming in from different channels, maintain a high enough stock level to avoid sellouts (but lean enough to prevent markdowns due to overstocking), and ensure fast and cost-efficient fulfillment from multiple distribution centers. 

To handle these challenges, companies are turning to a modern ERP and business applications to make their inventory management more intelligent and transparent. Manufacturers have made significant strides to improve inventory management, warehousing, and distribution to help increase transparency and ensure faster, more efficient delivery. 


4. Workforce Evolution 

Managing a multi-generational workforce 

The workforce is changing. As Gen Z workers enter the workforce, they find themselves up against a growing population of older adults (ages 55 and up), who are now the fastest-growing segment of the North American workforce. By the year 2026, older Americans will constitute 26% of the manufacturing workforce. At the same time, the next generation is entering the workforce with a very different skill set. These tech-savvy workers are essential in this advanced phase of manufacturing, with roles more closely integrated with smart machinery and cobots (collaborative robots), often working side-by-side. 

This multigenerational workforce creates challenges for manufacturers. Many of the older generation started out as manual laborers who are still adapting to new tools and computer technology designed to assist them. With an impending changing of the guard over the next several years, automation will take over many of the dull and dirty tasks, moving human workers to more value-added tasks on the shop floor. 

Attracting and retaining qualified workers 

Not only is managing a multi-generational workforce challenging, attracting, and keeping skilled workers remains a top concern for manufacturing leaders. According to a recent National Association of Manufacturers’ survey, 79% stated that workforce challenges was one of their top concerns. This inability to attract and retain workers is leading to working their existing workforce more in an effort to bridge the skills gap, or even having to turn down work.  

Factory digitalization is no longer an option, not only to accelerate automation to perform many of these tasks, but also offer a safer working environment to encourage workers to stick around with better monitoring and controlling through AI, sensors, computer vision, facial recognition, and the IoT.


5. Ethical and Sustainability Considerations 

Sustainability through innovation

With mounting pressure from consumers, regulators, and shareholders, manufacturers are investing in practices that are more ethical and sustainable. Many leaders are investing in new ways to make their operations and products more sustainable, to prioritize employee safety and satisfaction, and to positively impact the communities they serve. 

Manufacturers that are ahead of the game in terms of smart factory digitalization have a leg up on the competition both in terms of rapidly adapting to new goals for sustainability, as well as unlocking opportunities to produce better products that are more in line with increasing consumer concerns about climate change and protecting the environment. 

A greener, more ethical factory 

Manufacturers are optimizing the greening of the factory floor in several ways such as optimizing facilities and production to reduce overall energy consumption as well as taking steps to reduce the amount of waste. Factory digitalization facilitates connectivity to smart energy-saving solutions like heating and cooling systems, reducing environmental impact while reducing overhead costs. 

Forward-looking manufacturers are also harnessing technology to reduce their environmental footprint. Cloud-based collaboration tools—from shared documents and video conferencing to digital twins and AR training—make it easier for teams to work together no matter where they’re located. Companies are now deploying computer vision and smart sensors on the production line to improve efficiency, detect hazards, and reduce waste. And blockchain technology is proving a valuable tool in ensuring the source and efficacy of raw materials. 

Download the new e-book “Implementing a modern ERP for resilient manufacturing” to tackle these challenges head on.