New findings from a recent study conducted by Aprio reveal that many manufacturers in the United States are overlooking crucial avenues for enhancing operational efficiency, particularly in the realms of supplier performance, cybersecurity, and workforce agility. These oversights not only represent lost opportunities for growth but also amplify existing risks that could jeopardise procurement, logistics, and operational continuity.
A significant point of concern highlighted in the study is the inadequate scrutiny of supplier performance amid pressures from global trade dynamics. With nearly one in four manufacturers sourcing more than half of their components internationally, the necessity for rigorous supplier evaluation frameworks becomes critical. Aprio’s data indicates that only 48% of manufacturers actively assess the quality and reliability of their suppliers, and even fewer monitor essential criteria, such as sustainability practices and delivery performance. This lack of oversight is alarming, especially when one-third of respondents report annual expenditures exceeding $1 million on duties and customs fees. A rapidly evolving U.S. trade policy landscape could render many manufacturers unprepared to adjust their sourcing strategies quickly.
Persistent supply chain issues further complicate the landscape. Many companies still struggle with delays and product quality problems. However, a reliance on reactionary measures rather than proactive management highlights a deeper inefficiency. Without robust supplier scorecards or predictive analytics, organisations are left to mitigate risks only after they escalate. Strengthening evaluation standards for suppliers and embedding risk indicators into procurement workflows have shifted from being optional to essential within the current climate.
Adding another layer to these challenges is the issue of workforce management. The Aprio study reveals a pivotal yet troubling trend: 42% of manufacturers report annual turnover rates above 10% among frontline workers. In response, only 67% of companies claim that half or more of their frontline staff are cross-trained, indicating that operational flexibility remains underdeveloped. The need for manufacturers to foster a culture of empowerment for their workforce is evident, as two-thirds of firms indicate that only half or fewer of their frontline employees are authorised to independently resolve issues. This lack of autonomy can significantly hinder operational efficiency and the overall agility of the organisation.
In addition to workforce challenges, cybersecurity poses a mounting risk. The Aprio study underscores not only the frequency of cyber incidents but also the alarming inadequacy of preparedness within the sector. Nearly half of the surveyed firms experienced at least one IT breach last year, with 17% reporting five or more breaches. Yet, foundational cybersecurity measures such as staff training and policy development are alarmingly absent in half of the organisations surveyed. The need for ongoing investment in cybersecurity is critical, as manufacturing becomes the most targeted sector for cyberattacks, accounting for 25.7% of incidents, with ransomware involved in 71% of these cases. These statistics highlight the sector’s struggle to prioritise cyber resilience, which has become increasingly important as operational technologies evolve.
Strategically, many leading manufacturing executives acknowledge the urgency of these issues. According to a survey by PwC, 63% of manufacturing executives rank supply chain agility as a high priority, alongside cybersecurity, which is seen as equally crucial. Thus, integrating these areas into a holistic approach to enterprise continuity becomes not just a recommendation but a necessity. By elevating supplier performance management, fostering problem-solving capabilities among frontline workers, and fortifying digital resilience, businesses can better prepare for future disruptions stemming from trade complexities and labour market fluctuations.
Overall, the challenges confronting manufacturers are far from new; they are entrenched issues that require a paradigm shift in how organisations view governance across their operations. To achieve sustainable efficiency gains, a comprehensive focus on supplier oversight, workforce development, and cybersecurity is essential. The pathway to overcoming these barriers lies in systematic, proactive change, positioning manufacturers for resilience in an increasingly uncertain operating environment.
Reference Map
- Paragraphs 1, 3, 4, 6, 7
- Paragraph 2, 5
- Paragraph 5
- Paragraph 5
- Paragraph 4
- Paragraph 5
- Paragraph 7
Source: Noah Wire Services
Subscribe to Industry Updates
