The 10 Biggest Manufacturing Trends for 2021

By: Ben Baldwin

January 12, 2021

Manufacturing Trends 2021

A new year has finally begun. Many are ready to put the challenges of 2020 behind them… and embrace the manufacturing trends of the future. But with the hardships fought, the battles won, and the rewarding lessons learned over the past year, there are incredible reasons to be optimistic about 2021.

A survey of leaders in manufacturing and distribution stated that 47% of companies polled have experienced significant or modest revenue growth over the course of the pandemic.

But how did these companies grow amid economic uncertainty and decline?

The answer is through flexibility and resiliency.

It would be downright inappropriate to have a discussion about the future of manufacturing trends and not frame them under the experiences of the past year. How the manufacturing industry has risen to the challenges of 2020 affects the needed manufacturing trends for 2021.

Despite beginning a bright and shiny new year, many of the same challenges are still present. With supply chain disruptions, worker shortages, and international trade tensions, companies will need to adopt flexible and stronger business models.

To help you and your company pursue optimal growth in the next year, we’ve compiled a list of the top 10 biggest manufacturing trends for 2021.

1. E-commerce is Years Ahead of Its Time.

e-commerce

It is no doubt that companies with an online presence have and will continue to fare better within the restricted mobility of the pandemic. Though the online shopping trend is far from new, e-commerce has taken a huge leap forward. Especially amid people’s fears of going to brick and mortar establishments.

In the same survey with leaders in manufacturing and distribution, 68% of respondents said that their online sales increased by 11%-50% amid the pandemic. This is an astoundingly fast increase for e-commerce brands.

U.S. e-commerce sales still pale in comparison to retail sales (710 billion vs 4.2 trillion), but the pandemic has accelerated e-commerce growth by a matter of years. Companies that can hop on the proverbial e-commerce train will be better enabled to face the new year with a diversified sales market.

2. Expansion of Mixed-Model Assembly

Mixed-model assembly has grown over the past decade with the emergence of Industry 4.0 and will continue to expand into 2021. With the growth of e-commerce, consumers are expecting access to products that are more varied and more customized.

As we’ve discussed in The Connected Worker Platform and the New Connected Economy, mixed-model assembly will help you achieve greater product flexibility, shorter lead-times, and significant cost-cutting.

Under a mixed-model assembly line, workers are taught multiple processes and procedures. Supplying a visual work instruction software enables new and old employees to build with expertise.

This manufacturing trend enables a workforce that is no longer stagnant in one mode of production; a workforce that is flexible and resilient to market changes.

3. Increase in Onshoring and Localized Production

onshoring

2021 is bound to see an increase in onshoring and localized production. In a reversal to offshoring, onshoring is where businesses relocate production back to their native lands or closer to their intended market.

While offshoring does supply the manufacturing industry with cheap labor, onshoring provides control and protection.

In the early days of 2020, Covid-19 first hit hard in China, creating a ripple effect through the global supply chain. This caused serious slowdowns in shipping and production as China held about a quarter of global manufacturing. Companies dependent on China were left with little ability to meet their customer demand.

This caused many to realize their dangerous dependency on facilities that are far from the intended market. For this reason, manufacturers are looking to shift more towards localized production.

The benefits of onshoring include reduced shipping costs, localized control, production supervision, and better communication with the workforce and supply chain management.

Other factors also highlight the incentives for companies to onshore some, if not all, of their operations. This includes freedom from trade wars and tariffs that threaten global supply chains.

Switching to localized and domestic production is proving to be a powerful manufacturing trend that will gain more steam in 2021.

4. Investment in New Skills for the Workforce

As we progress through this year, and into the new decade, we will see growing investment in training and education. The manufacturing industry is constantly evolving and workers will need the appropriate skills.

We’ve all heard the rhetoric. Automation, advanced machinery, and artificial intelligence will kill manufacturing jobs. Since the Second Industrial Revolution, this theme has been a common fear.

new skills for workforce

But this has been proven wrong time and time again as new technologies have led to greater productivity. This in turn increases the need for more workers, better skills, and higher wages.

As we dive deeper into the second decade of Industry 4.0, companies will need workers trained in these new technologies. In fact, it is this skills gap that is leaving many manufacturing jobs unfilled.

Under this trend, companies are increasing investment in training and retraining employees. Stanley Black and Decker has committed to closing the skills gap within their workforce by retraining 10 million of their manufacturing employees by the year 2030.

As other companies follow suit, we will see serious investment in training and educational opportunities for the manufacturing workforce in the next decade.

5. The Need for a Digital Transformation

Amid the industry shifts that occurred in 2020, manufacturers are seeing the fragility of their dependence on labor. Specifically, on the tribal knowledge within their workforce.

Let’s face it, experienced workers leave for any number of reasons, not to mention the worker shortages brought on by the events of the past year.

If you are overly dependent on your experienced workers, then you could be left in the dark when those people leave. Companies will have to find ways to mitigate this as workforce shortages are not yet a thing of the past.

With this in mind, we will see a significant increase in transformations towards a digital mode of operations in 2021. Companies are already achieving stronger workforces by incorporating technology such as IoT sensors, smart tools, 5G, edge and cloud computing, industrial wearables, and digital work instructions.

The digital transformation is not meant to replace workers, it is there to empower them. Workers with stronger, faster, and smarter tools will be better equipped to perform varied and complex tasks.

With the adoption of this manufacturing trend, companies can achieve workforce flexibility, and in turn, increase labor resiliency.

6. The Connected Workforce Thrives

As we progress through this new decade, Connected Worker technology is set to experience substantial growth.

connected workers

According to Polaris Market Research, the global Connected Worker market is anticipated to grow at a CAGR of 20.1% from 2020 to 2027. For the U.S., the Connected Worker market is expected to reach 2.98 billion dollars by the year 2026.

Connected Worker technologies enable workers to connect to their physical and virtual environments. This is accomplished through smart wearables, manufacturing software, smart tools, and more.

This empowers the worker to capture key manufacturing data in real-time and collaborate with systems and people as a unified team.

Essentially, Connected Worker technology fosters information sharing. Making connections between people, tools, and computers even stronger.

With the diverse production demands and capabilities of Industry 4.0, Connected Worker technology is a must-have.

7. IIoT is Still a Big Deal

IIoT is still making waves in the manufacturing industry and will continue to do so for the foreseeable future.

The global use of IIoT (Industrial Internet of Things) is estimated to grow from 17.7 billion in 2020 to 36.8 billion in 2025. Effectively doubling (and a bit more) the current amount of IIoT connections.

The research also found that smart manufacturing will account for 60% of global IIoT connections. Projecting 22 billion connections in smart manufacturing alone.

As we move further and further into Industry 4.0, whole ecosystems of IoT sensors are paving the way for the “smart factory” and the “smart city”.

This will require massive amounts of embedded IoT devices and new levels of fast and reliable connectivity.

8. Big Data Equals Smarter Companies

Companies are not only investing in new technologies that boost productivity. Manufacturing companies are also becoming smarter.

An incredible advantage of IoT and a digital mode of operations is the opportunity to acquire massive amounts of data. Big Data enables manufacturers to gain insights into their operations like never before; empowering companies to evolve and improve faster than in previous generations.

Big Data provides knowledge, and knowledge is power.

We should see Big Data become an even larger manufacturing trend in 2021 than ever before. Over the next five years, the market for Big Data in the manufacturing industry is expected to reach USD 4.55 billion in 2025. That is a CAGR of over 30% from 905 million back in 2019.

By installing software that captures key assembly data, your operation is like an open book. You can gather insight and knowledge that previous generations could only dream of.

9. Connect More with Wi-Fi 6E and 5G

As the use of IoT devices and big data is on the rise, internet connectivity will need to be carried by the most advanced networks yet. Here and now in 2021, that is 5G wireless and Wi-Fi 6E.

5G is poised to affect every field in the manufacturing industry. With its augmented latency, scalability, and improved connectivity, 5G is making Industry 4.0 logistics and operations faster, smoother, and more reliable.

But it is a myth that the future of connectivity will rely solely on 5G networks. It will also need help from Wi-Fi 6.

This year, we are set to see Wi-Fi 6 receive an upgrade to Wi-Fi 6E. The U.S. Federal Communications Commission (FCC) opened up 6GHz bands for unlicensed Wi-Fi use back in April of 2020. Now, early in 2021, we will see new Wi-Fi 6E chips available on the market.

Wi-Fi 6E will provide a major increase in bandwidth. The 6GHz band will be able to accommodate seven 160 MHz channels at once. This will have major effects on the capabilities of wireless connections at home and in all industries.

Phil Solis, research director at IDC, states that we’ll see rapid adoption of Wi-Fi 6E in 2021 with more than 338 million devices entering the market.

5G and Wi-Fi 6E are the catalysts for tremendous growth in productivity, safety, and flexibility. Something to which manufacturers should give serious thought.

10. Remote Work… From Anywhere

In our final manufacturing trend of 2021, how could we not talk about the growing movement of remote work and working from home? Through the past year, we have seen a remarkable increase in the use of conferencing technology.

How will this affect the notion of the workplace?

remote work

In 2020, Global Workplace Analytics estimated that about 56% of non-self-employed jobs in the U.S. could be performed at home.

There is a key difference between could work from home and should work from home. Each position and business will fare differently depending on the type of work and their communication needs.

By no means is remote work proven as more or less productive in all categories. There are significant pros and cons to this growing movement.

But despite the pros and cons of remote work, the trend is still here and growing in 2021. Meaning that employers will need to find creative solutions to equip their workers as people are out of the office.

A New Decade Begins

From faster connections to smarter manufacturing, there are incredible reasons to be optimistic about the future manufacturing trends of 2021. If we have learned anything from the past decade, the manufacturing industry is constantly evolving.

Gone are the days of the stagnant and rigid year over year single product production. Now is the time for smarter technology, resilient connections, and greater opportunities.

After all, this is Industry 4.0; new levels of innovation and flexibility are the standard. In this new year and decade, seize knowledge, gain insight, and pursue growth.

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