The Top 10 Global Manufacturing Trends of 2024

What are the biggest Manufacturing Trends of 2024?

2024 is poised to bring amazing new solutions and possibilities to the manufacturing industry. While the global industry is still feeling the effects of a less-than-optimal supply chain and a worker/skill shortage, more and more companies are working to solve these problems by investing in digital tools.

For this reason, 2024 will see a strong push towards advanced technology like AI, the smart factory, advanced interconnected software, and the industrial metaverse. Even though we can never fully see the future, there are strong reasons to be excited about the road ahead and even stronger reasons to be prepared for it.

To help you pursue optimal growth in the next year, we’ve compiled a list of the top 10 biggest global manufacturing trends for 2024.

1. AI’s Takeover of Modern Manufacturing
2. The Rise of the Smart Factory
3. Digital Twins Create Complete Virtual Worlds
4. The Industrial Metaverse Will Bring the Industry to a New Cyber/Physical World
5. Increased focus on Cyber Security
6. Continued Efforts to Curb Labor Shortages
7. Increase in Onshoring and Localized Production
8. Microfactories Provide the Next Level of Agility
9. Incentives for Carbon Neutrality
10. Increased Demand from The Next Generation of Employees

Manufacturing Trend #1: AI’s Takeover of Modern Manufacturing

Ok, woah there, AI, is not taking over anything. But it is steadily enhancing the way we produce products and view data.

AI (Artificial intelligence) has been a huge global topic in 2023, and it's no surprise that this trend will continue well into 2024, the rest of the decade, and the foreseeable future.

While AI was introduced to the manufacturing sphere in the previous decade, many AI-related projects were stuck in a so-called “pilot phase”. A manufacturing survey in 2020 revealed that while 79% of respondents were exploring the implementation of AI within their productions, only 21% had actually implemented the technology as a regular part of their productions.

But now, AI has exploded, and the industry is changing with it.

The global manufacturing AI market is expected to hit approximately 68.36 billion USD by 2032, growing at a CAGR of 33.5%. Currently, automotive, heavy machinery, electronics, chemicals, and metals industries have seen the greatest deployment of AI yet, but other sectors have good reasons to catch up.

As more manufacturers progressively move towards a smart factory model that produces multiple petabytes of data per week (one petabyte = one million gigabytes), companies will need to turn to AI-powered analytics to organize all the data.

The growing rates of digital transformation and the use of big data over the past decade have led to some incredible achievements in the manufacturing industry. But it has also led some manufacturers to gain more data than they know what to do with. And if using multiple systems, this data can be hard to manually consolidate and standardize.

AI-powered analytics and machine learning provide manufacturers with the capability to automatically detect trends in machine use, predict machine failure before it happens, and optimize production and material usage.

Manufacturing Trend #2: The Rise of the Smart Factory

With an increased focus on technology being a major manufacturing trend of 2024, the smart factory is continuing to grow alongside AI, IoT, Cloud Computing, and analytics technologies.

Smart factory technology enables manufacturers to integrate a super advanced automated network of machines, systems, and people that intuitively work together to achieve higher levels of productivity and efficiency while significantly reducing production costs.

The smart factory gives manufacturers access to real-time data and complete visibility of their operations, creating a more flexible and responsive production environment. And with the rising costs of materials and a volatile global supply chain, smart factory technology could be the solution for many manufacturers.

For this reason, in 2024 we will see an increase in smart factory technologies that are designed to integrate with other systems and centralize data flow. Progressively, companies are weaving a resilient digital thread throughout their operations with manufacturing systems and operations powered by IoT devices, cloud computing, and APIs (Application Programming Interface). This technology allows ERPs, BI software, digital work instructions, machine monitoring software, and other cyber-physical tools to communicate effectively.

Manufacturing Trend #3. Digital Twins Create Complete Virtual Worlds

Though IIoT is not a new topic of discussion, the technology continues to bring innovations to the industry. Namely, digital twin technology.

Through carefully installed IoT sensors within a machine or environment, companies gain a complete virtual re-creation of real-world scenarios in an extremely fast and accurate manner.

Digital Twin technology enables companies to

• Run extensive real-world tests within a digital environment
• Gather in-depth data with real-time monitoring
• Intelligently find and test the right solutions faster

For example, every embedded sensor within a machine gathers data in real time. This data travels to the digital twin system which compiles and analyzes it immediately. Everything that happens in the real world also occurs in the digital world, hence the name digital twin.

It's easy to see why this technology would be incredibly useful to manufacturers, especially those with machinery and connected environments.

One key proponent of digital twin technology is Rolls Royce Aerospace where each airplane engine is outfitted with hundreds of IoT sensors that gather telemetry, fuel usage, engine health, and loads more data. If these turbines are connected together, they can learn from each other’s experience and propose intelligent solutions to problems that may affect the whole fleet.

The technology is expected to grow rapidly in the current decade. While the market for digital twin technology was estimated to be worth USD 7.5 billion back in 2021, it is anticipated to expand at a CAGR of 39% from 2022 to 2030. This incredible rate of growth shows the industry that IIoT technology is still creating big innovations and further advancing the amount of insight we can gather from the manufacturing environment.

Manufacturing Trend #4: The Industrial Metaverse Will Bring the Industry to a New Cyber/Physical World

The industrial metaverse combines the smart factory and digital twin technology to create an immersive virtual or virtual/physical environment. Theoretically, an infinite amount of people and systems can inhabit and share the space to communicate, work, and even play.

And it seems like the industry is poised and excited about the possibilities of this new technology. In a 2023 study by Deloitte, the majority of respondents stated that they have made significant investments in technologies toward the industrial metaverse.

Companies can create a rich immersive digital environment to showcase a product, service, or even a process within a factory. This new metaphysical space can be accessed via VR (virtual reality) or AR (augmented reality).

• If using AR technology, a person could walk through a physical space while a digital environment is layered over top.
• If using VR technology, the user explores a virtual environment that they observe, move, and interact with in ways that would be physically impossible in the real world.

Both options provide companies with a space where anything is possible and the cost of interaction and tests are virtually nothing.

Using the industrial metaverse, users anywhere in the world with an internet connection can tap into the metaverse and virtually “walk through” the information being showcased. The industrial metaverse presents global teams with the ability to work and collaborate within one environment, serving to close the distance gap and connect the manufacturing world like never before.

Manufacturing Trend #5: Increased Focus on Cyber Security

While the industrial metaverse is an exciting manufacturing trend of 2024, it also highlights the need for higher levels of cyber security across the industry.

IBM’s Threat Intelligence Index identified manufacturing as a key target for cyber-attacks, stating that manufacturers experience 30% of cyber-extortion attempts.

This is in part due to a major weakness of the industry: downtime.

Hackers know that the industry has no time for unplanned downtime, and they are willing to exploit this weakness.

For this reason, manufacturers should focus on squaring up their cyber-security and plan for potential attacks in the future. In a recent survey by PwC, 49% of manufacturers polled identified cyber-security as a major challenge for the next few years.

While cyber-security may seem like an individual responsibility, some companies are banding together to combat the issue corporately. In 2020, more than 50 organizations, alongside the US Department of Energy, came together and formed the Cybersecurity Manufacturing Innovation Institute. Recently, the public/private group has made plans to train one million manufacturing workers on cybersecurity preparedness by 2026.

Manufacturing Trend #6: Continued Efforts to Curb Labor Shortages

A particular focus for manufacturers in this decade has been figuring out ways to fight labor shortages. And 2024 is no exception.

In a recent study, Deloitte reported that three-quarters of surveyed manufacturing executives agree that attracting and retaining their workforce will continue to be a high priority in 2024, noting that the industry will be short 2.1 million skilled workers by 2030.

This issue is nothing new. Another survey reported that 45% of US manufacturing executives have turned down business opportunities due to a lack of workers. This startling statistic points to a great deal of lost revenue for the sector and a crucial issue for the decade.

Now, more than ever, workers are the most watched commodity in the industry.

Coming into 2024, companies are using 2 key strategies to grow and enhance the manufacturing workforce.

1. Utilizing the Knowledge of Experienced Workers and Retirees

With close to a third of manufacturing employees over the age of 55 in the US, a huge portion of employees are poised to leave the workforce entirely within the next decade. Besides replacing these workers, companies need to find ways to transfer the knowledge of their retiring employees to the next generation.

Some companies are opting for alumni programs that keep retired workers engaged in the activities of their previous work. This network of retired employees is then used to transfer their skills to new employees.

However, while this initiative is a solid effort, two problems quickly rise to the surface.

1. The program relies on retired employees wanting to continue engagement with their former companies.
2. While experienced workers are a valuable asset, one retiree’s instruction may differ from the next retiree's, leading to a lack of standardization.

Rather, companies can gather their key process knowledge before their workers walk out the door using a standardization tool like work instruction software. By recording the best practices of their most knowledgeable employees, companies can give immediate knowledge to their new employees. Not to mention, upskilling and cross-training become simpler since workers only need to follow the instructions to perform any complex job.

The best part is that all process knowledge is centralized and controlled by the company, leading to an enhanced level of consistency and standardization.

2. Diversity, Equity, and Inclusion (DEI) to Broaden Talent Pipelines

The manufacturing industry and governments are investing in diversity, equity, and inclusion (DEI) initiatives to widen the pool of potential employees.

In the US, women only account for 29% of the manufacturing workforce - strikingly similar to Canada’s 28% statistic. Within the current labor shortages across the industry, manufacturers will likely be able to expand their talent pools by encouraging more women to enter the field.

The Manufacturing Institute, a partner to the National Association of Manufacturers (NAM) launched a campaign that seeks to raise that number to 35% by 2030. At the same time, the US government enacted DEI measures through the National Strategy for Advanced Manufacturing which works to expand and diversify the advanced manufacturing talent pool to minority groups and women.

With initiatives encouraging more people to pursue careers in manufacturing, businesses should have a broader section of the population to source labor.

Manufacturing Trend #7. Increase in Onshoring and Localized Production

Although it may seem like the events of the global COVID-19 pandemic are long behind us, it is regrettably still affecting our supply chains, leading manufacturers to continue looking for opportunities to tighten and localize their logistical networks. And with the ongoing war in Ukraine, supply chains are set to experience continued volatility.

Before the events of 2020, cheap labor used to be the focus of the industry, compelling many companies to cut costs and outsource labor to other countries. The inexpensive labor was worth the increased transportation costs and additional wait times. However, this was only acceptable because of the regularity of the contemporary supply chain.

Now, with the supply chain experiencing long-term unpredictability, we are seeing businesses give up their offshoring operations in favor of dependable transportation and supply chain autonomy. Plus, traditional outsourcing markets like China have seen their workers' wages triple in the past decade, leaving less incentive for global companies to invest in offshoring opportunities.

Governments are getting involved as well. Currently, East Asia holds nearly 75% of global semiconductor manufacturing capacity. But in August of 2022, the US government passed the CHIPs and Science Act which is poised to increase domestic semiconductor investment. The US is hoping to create a more sustainable and resilient semiconductor supply chain close to home.

In December of 2023, BAE Systems was the first recipient of the bipartisan act, receiving 35 million USD to build computer chips for F-15 and F-35 fighter jets. And we should see this list grow as we progress through 2024.

By returning production to their home countries and/or moving production closer to their intended market, companies can take greater control of how they source their materials and how they manufacture their products.

The 3 major benefits of onshoring are

1. Lower Transportation Costs: The major cost-saver of onshoring is through reducing the distance the product needs to travel. US automotive manufacturers like Ford and Tesla are creating their own domestic supply chains for this very reason.
2. Decreased Lead Times: Less transportation also means faster lead times, meaning that companies can bring their products to market sooner, potentially beating out competitors with offshore operations.
3. Enhanced Quality Control: When production is closer to the base of operations, companies can implement greater oversight and ensure precise quality and consistency.

In a surprising turn of events, a recent study revealed that Canada has one of the lowest manufacturing operation costs in the world, potentially providing US manufacturers with a semi-offshoring opportunity.

There are also technological opportunities for companies to tighten up their supply chains, even if suppliers are on the other side of the world.

Using work instruction software, companies can share key process knowledge with their affiliated companies through a digital ecosystem, ensuring that all materials and equipment are up to snuff before they get shipped. And with integrated instant translation powered by AI, companies can instantaneously share their process requirements with any supplier in any language.

Manufacturing Trend #8: Microfactories Provide the Next Level of Agility

With the manufacturing trends of 2024 highly focusing on advanced technologies and the problems with the global supply chain, it is reasonable to see companies implementing one trend to solve the other.

This is exactly what has happened regarding microfactories.

Microfactories are small yet highly modular operations that quickly adopt advanced technologies, such as AI, IoT, Big Data, robotics, and automation to create an agile yet cost-effective production.

Traditionally, large factories are only efficient if working at full capacity, not to mention, they are often complex, require enormous investment, and are slow to start and innovate. While large-scale productions (gigafactories) still have a firm standing as powerhouses within the industry, microfactories could be the solution to a few of the above problems.

By building smaller-scale smart production cells that are equipped to build a wide range of products at lower volumes, companies can quickly shift production to their exact needs when they need it. At the same time, microfactories allow companies to expand production in smaller yet more manageable steps. These smaller factories do not require as much investment or business to be profitable as is the case with gigafactories.

Additionally, since these microfactories do not require vast amounts of real estate, production can take place closer to city centers, expediting lead times and providing companies with greater population pools for their workforce.

Currently, the microfactory is primarily used within the automotive industry, with Arrival leading the way into this new venture. However, this trend could have major implications for other areas of manufacturing.

Advanced technology like interactive and visual work instructions empower manufacturers to move away from strict one-process productions and adopt modular and scalable manufacturing solutions. Process guides become dynamic to the needs of each work order, supplying workers with the exact knowledge they need to get the job done right at any moment.

Manufacturing Trend #9: Incentives for Carbon Neutrality

With the ever-increasing focus on climate change, manufacturers will continue to make efforts to enact greener operations and achieve carbon neutrality. With hurricanes and other natural disasters on the rise in the past decade, there is good evidence pointing to climate change as a contributing factor to supply chain disruptions.

The EPA (Environmental Protection Agency) found that the manufacturing industry accounts for close to a third of greenhouse gas emissions in the US. To lower this startling number, many manufacturers are looking for cost-effective and sustainable practices for the future. Plus there are financial incentives to this course of action as well.

The US government is providing tax incentives to bolster the clean energy market. Interestingly, since transportation is another major contributing factor to greenhouse emissions, there is also a 10% tax credit for companies that use domestic products and materials.

Governments are not the only ones following this manufacturing trend in 2024. Consumers are weighing in on the conversation by looking for companies that are making strides toward carbon neutrality. Product labels that inform consumers of the environmental impact of a product will serve as powerful decision-making factors.

A recent survey found that 72% of respondents said that they are actively looking for environmentally friendly products. Another study conducted by Google found that 66% of consumers are willing to pay more for eco-friendly brands.

Additionally, as more and more companies embrace the benefits of digital transformation, they are progressively turning to paperless solutions. This has been a major contributor to decreasing the carbon footprint of many within the industry.

Manufacturing Trend #10. Increased Demand from The Next Generation of Employees

For our last manufacturing trend of 2024, let’s return to the workforce and the opportunities to retain and attract new talent.

Amid the labor shortage felt around the globe, the job market is in a buyer’s market phase – prospective employees hold more leverage than usual. While this can seem like a costly factor for the industry, it is also an opportunity for leaders to truly listen to the needs of current and prospective employees.

Money is not the only factor workers are looking for in 2024. They are also looking for advancement opportunities, workplace wellness programs, enhanced communication/engagement, transparency, and a more accommodating work-life balance to name a few.

If companies provide even a few of these perks, they are sure to make low-cost/high-reward decisions that attract new talent and help maintain the current workforce.

While keeping your employees and attracting new talent is crucial for 2024, it is important to also remember that employees who feel valued often contribute to better quality, creativity, and productivity. Entraction and engagement with the workforce is a low-cost practice that yields high results.

So while employees may have more leverage than ever, the trending demands, if managed properly, can increase productivity and workforce stability in 2024.

The Future is Technologically Bright

Despite the labor shortages and supply chain disruptions that are still prevailing issues for 2024, the manufacturing industry is facing these challenges head-on with new technologies and targeted action plans.

If we have learned anything from the course of the past and present industrial revolutions, it is that the manufacturing industry is constantly evolving and improving. Companies need to be prepared for a new era that seizes the opportunity for advancement and growth.

So let’s keep this going! Now is the time for smarter technology, resilient connections, and greater opportunities. After all, this is 2024; new levels of innovation and flexibility are the standard.