Covid 19 has already done a huge impact on the manufacturing industry. However, there are new manufacturing trends, have come to play.
Earlier this year, some companies have closed their factories, and thousands of people lose their jobs. Now, most of the manufacturing industries are at a recovering stage since the vaccination is going on.
China, which is responsible for 30% of global manufacturing output, has successfully restarted its factories. Most of the other countries are still struggling.
Supply is Not Enough
Half of the manufacturing factories are not functioning, and most of those are not running at their maximum capacity. As a consequence, a huge gap between supply and demand has been created. Since the supply is not enough for the demand, some manufacturers and retail and wholesale sellers try to sell the products at a higher price.
Cost of Raw Materials
The cost of raw materials has increased significantly. The biggest material manufacturers are struggling due to Covid, and they’re unable to fulfill the demand. On the other hand, importers only have limited stocks. Due to high demand, they increase prices. You can read our article about the “Importance of Engineering Materials”, to learn more.
Here is a list of raw materials exports by country. We don’t have any statistics reports for 2019, 2020, 2021 years. This is a 2018 report of raw material exports.
The competition in some industries has decreased due to this pandemic. Hard product manufacturers are the most affected party. However, software companies and internet service providers (ISP) still have their competition.
Quality Budget Products
The market for high-quality budget product brands is increasing. People tend to buy a cheap phone because they’re most likely to buy another within a year or two. This is maybe because high-end tools and equipment are becoming more expensive. For example, companies like Xioami are rising because they deliver much better quality at a lower price point.
Adding more functions to new products is not a strange trend, but companies also want to reduce the size and weight. So, they tend to compact the product in a small area, which makes it difficult to repair. Since most things are not repairable, without just replacing the faulty part, it has become a trend to replace a large unit. And some products are made to throw away when it breaks down. As a result of this, the reliability of products is decreasing.
Continuous functioning is important for manufacturing. Since most of the factories have a production chain, a broken machine can stop the whole production. Even if there is no production chain in a company, they’ll still have to pay employees. To run these machines and products continuously predictive maintenance has been introduced. In predictive maintenance, the maintenance is done on predicted dates.
Selling Directly to Consumers
When selling products, the retail profit margin is higher. If a production cost of a Bluetooth speaker is $5, let’s say the manufacturer’s profit margin is 35%: then the wholesale price is 6.75. And the retail is more likely to be $15. It means that the retailers get a higher profit margin than the manufacturer. So, companies are trying to sell their products directly to consumers.
Quality is something that needs to be built into the product at each stage. By starting from a sketch, the quality is checked during each stage. This is not a new trend in manufacturing but it continues.
Automation & Robots
By using automation, companies tend to get maximum productivity, without having more laborers. The automated machines can work continuously for 24 hours. And it’s a huge advantage for the manufacturing industry.
Design In One Manufacture In Another
Labor cost is low and government support is high in some countries. They tend to design products in one county with the best engineers and creative minds. Then the production is given to another country to minimize cost. This makes it possible to manufacture a high-quality product at a lower cost.
Service Industries Earn More Than Manufacturing
Software and other service companies earn more than manufacturing. For example, social media companies earn more, because social media companies control the power of influencing people. Without advertising most companies can’t survive the competition. So, manufacturing companies have to spend a significant amount of money on these platforms to gain consumers.
Huge technology companies tend to give unnecessary functions to keep their fan base. To make the product new, modern, and unique, they add some unnecessary functions.
For example, Apple is introducing features like face unlock, just to give a fresh feeling to their buyers.
Most of the current manufacturing trends are because of the Covid 19 pandemic. However, things have started to recover because of the vaccination process. Some countries have successfully restarted all of their factories.