It’s here! It’s finally here!
Thanksgiving? Holiday drinks at Starbucks?
Nope, even better – The 2024 Advanced Manufacturing Report by Plant Magazine and Canadian Manufacturing!
We’re here to break down all the great insights for Canadian manufacturers as we head into the new year.
If you do have the time to read through the whole report, we really recommend doing so
Until then, we’ve done some prep work by pulling some of the most striking quotes and numbers, condensing the main insights into a summary article that you can read over your morning coffee.
[All tables and charts are taken from and credited directly to The 2024 Advanced Manufacturing Report.]
Nearshoring As A Solution to Supply Chain Issues
One of the most interesting emerging trends has been nearshoring as an alternative to global supply chains. Canadian manufacturers are now looking at local supply chains and processing resources closer to physical production facilities.
Since the onset of the COVID pandemic, trade and materials supply have been less dependable as different regions enforced their restrictions. This of course had drastic impacts on smaller manufacturers who had to pivot to meet production demand by seeking alternative sources.
It’s still too soon to really tell how this trend will impact the Canadian industry in the long run, but it’s definitely been a solid choice for helping smaller companies survive through the challenges brought by the pandemic.
The chart below, “Collecting And Using Data”, supports this, showing that 57% of Canadian manufacturers rely on an integrated ERP for supply chain management, making it the 2nd most popular reason for collecting data.
What’s even more interesting is that the most popular use of data, sitting at a healthy 64%, is excel spreadsheets – one of the most basic and universal analytical tools available.
This interests us because SPOILER ALERT: manufacturers aren’t super confident in using a complicated ERP – remember this and we’ll pick it up in a few paragraphs.
Takeaway: By all means pursue nearshoring if it works as a solution for your business. Other local materials suppliers are probably also eager to capitalize on domestic opportunities like nearshoring.
An ERP may be the solution you need, but there are far more available solutions between a simple excel spreadsheet and a fully integrated enterprise software solution. It’s not an all-or-nothing type of scenario. For example, if you’re having trouble figuring out a complicated ERP, more user-friendly solutions exist, like integrating your ERP with accessible work instructions.
Second, Canadian manufacturers report that they have some significant difficulty in accessing or having working knowledge of government programs and support.
Take a look at this “Industry Sectors” list within the Canadian manufacturing industry (particularly the first few lines, if you prefer to skim):
Almost a third of respondents – the biggest category at 30% – said they were in a “miscellaneous” category of manufacturing. The next two categories are “fabricated metal products” at 17% and “machinery” at 13%. All other categories are single digit percentages.
Let’s combine that with one other insight: the below “Company Revenue” chart. A hefty 42% of respondents had annual revenue between $1 and $10 million – the biggest category measured in increments up to $1B.
In other words, small to medium sized miscellaneous manufacturing companies in Canada – more than any other category – struggle with accessing assistance post-pandemic.
“I think there’s an awareness problem we’re trying to solve. Not knowing where government programs are is a problem we’re trying to address,” said Scott McNeil-Smith, VP of Manufacturing Sector Performance at EMC.
Canada doesn’t have as many centralized manufacturing operations as Europe, for example, partially due to our smaller population and broad geography. Our lower-revenue manufacturers tend to fill smaller niches or serve more distinct areas appropriate to their capacity.
In fact, when asked to agree or disagree with a list of following statements, less than half (46%) of respondents said they knew where to find government programs to help with new technology investments. This is down from last year’s statistic of 74% for the same statement.
This is frustrating because it’s exactly these types of manufacturers who would most benefit from government programs.
Takeaway: While opportunities may seem few and far between, there are in fact programs available to help smaller manufacturers recover from the past few years. You’re not alone in thinking you can’t find anything especially if you’re not a global conglomerate – you just may need to spend more time researching and networking.
Persistence of Skilled Talent Gaps Within Workforce
This third insight isn’t something new, but it’s definitely still throwing a wrench into the works: lack of skilled talent for hire.
What IS different in this report is that Canadian manufacturing is mostly unaffected from the fears of automated machinery overtaking human labor. Very few companies are actually seeking to decrease their workforce, despite what the state of the economy at large may feel like.
According to the chart “Challenges Implementing Technology”, 49% said their biggest challenge in technical areas was actually a lack of skilled talent:
“Everyone seems to be consistently struggling with hiring quality candidates, not reducing headcount. So it’s more a question of ‘how can we attract people? How can we retrain people so that they can be retained?’ We need to incentivize people to go into manufacturing,” said Dan McKiernan, Manager at Epicor.
This is a potential gap where government programs and training resources could really help manufacturers stay competitive in the greater global marketplace.
Kerry Mann from MNP says, “The opportunity is not in reducing people, it’s in the upskilling and reskilling of current personnel to get the benefits out of technology. Our education sector isn’t providing the internships and the skills required on the plant floor to exploit the digital technologies that are available, and the employers don’t have programs in place that allow them to reskill and upskill their people adequately.”
Takeaway: When the hiring market is thin, it’s best for manufacturers to invest in their current headcount by providing valuable reskilling and upskilling opportunities.
Pro Tip : one of the most effective and low-cost ways to retain workers while increasing knowledge is to use work instruction software. Workers learn on the shop floor from their most experienced coworkers and institutional knowledge is retained through smart data capturing.
Developments & Challenges With IIoT Implementation
Finally, this last insight into 2024 works hand-in-hand with the previous trend of labor shortages. Industry 4.0 and other IIoT technologies are clearly the means to better manufacturing standards. However, the lack of skilled labor means that implementing any of these technologies is a massive barrier to Canadian companies.
JP Giroux, President of EMC says, “A lack of skills to support an investment is something that’s coming back in our studies as a barrier to technology deployments.”
Canadians are well aware that they should be seeking to improve their data collection and Smart systems, even when they don’t have direct knowledge of how these things can benefit them.
Take a look at these two charts – “Areas to Improve Data” and “IIoT Engagement” – that show a pretty even spread of interest across many different applications of these technologies:
It’s no surprise that more companies are shifting their data management systems to the cloud – it’s cheap, effective, and scales well for emerging players in the industry.
There’s so much more opportunity beyond the cloud, however, that Canadian manufacturers are missing out on simply due to lack of expertise in integrating all this tech.
The most common (37%) reason for not investing in Industry 4.0 is “difficulties integrating advanced technologies in existing systems” according to the next chart:
Most respondents are divided between two options: integrate a hardcore superpowered ERP, or stick with the easygoing cloud. While these are both decent options, they are hardly always the best options for the types of smaller manufacturers emerging in the Canadian market.
“Different talent is required to implement newer technologies like IIoT to offset the manual labor shortages, yet also a lot of manufacturing companies are still operating in silos, so in order to leverage data they must collaborate across the organization more,” says Tony Alderice, VP of Sales at Epicor.
Takeaway: It’s not all doom and gloom, don’t worry – there are in fact many solutions for manufacturers between these two extremes of ERP or barebones cloud platforms. The key is to look for software (like our own) which is modular and made by workers who actually have shop floor experience. This means that you aren’t overwhelmed by the complexity of endless ERP features, but you’re also not left wandering the cloud alone. It’s not all or nothing when it comes to upgrading technology. The best solution is one that is tailored to you but is also entirely within your understanding and control.
To 2024 And Beyond: The State of Canadian Manufacturing
So there you have it – Canadian manufacturers are actively seeking solutions for post-pandemic growth, despite the institutional and practical challenges at play.
There’s more great insight from the report, so make sure to check it out in full.
If any of these insights we brought up in this summary interest you and you want to talk more about personalized approaches to them, let’s chat! No pressure or purchase required.
