Insights: Manufacturing Construction Boom, Product Loss Prevention
December 2023 manufacturing & distribution roundup
As the holiday season roars in, ecommerce and retail fulfillment operations are both pushed to their limits. What should you be looking for over the next year?
Construction manufacturing: a “once on a lifetime” boom for the construction industry
The estimates are dizzying: American firms have spent nearly half a trillion dollars since 2021 building manufacturing facilities in a rush to reshore the sector — a trend that will only accelerate. Construction companies are building industrial facilities at a breathtaking rate, according to Manufacturing Dive. They interviewed Didi Caldwell, CEO of Global Location Strategies.
Key takeaways
- Caldwell stressed several trends driving the trend: America went from a net energy importer to exporter, which made the United States a low-cost energy country. While federal activities like the CHIPS and infrastructure acts spurred the trend, Caldwell said that it was well underway before those laws were enacted — and prior to the Covid-19 pandemic.
- While much of the activity and headlines have focused on so-called “megaprojects”, other types of construction activity is booming for projects like distribution centers and necessary infrastructure. Those massive projects will generate supporting supply chains of other manufacturing, processing and fabrication operations.
- The states of Texas, Georgia and North Carolina have seen the most total investment since 2020, with Texas having the largest share of spending. Virtually every state has seen the pace of manufacturing construction increase.
Adrian’s Safety Systems: how to reduce product loss
Damaged inventory is a big problem that goes beyond the simple cost of the lost product itself. You can damage inventory many ways, so it’s a multifaceted problem without a single solution. Adrian’s Safety Solutions breaks down some potential solutions in this article. The article discusses proper loading techniques, inventory security, visual inspection for quality control, employee training.
Key takeaway: It’s much easier to prevent damage than it is to deal with the repercussions of damaged product.
The effects of inventory damage
- A damaged stock item means that you must have systems for returning, refurbishing or disposing of the product.
- That damaged product may be one you need to ship out or send upstream for processing. That means you may delay a customer order or manufacturing step.
- When the damages aren’t seen and go out the door, you not only annoy a customer — you must then have entire return systems in place to deal with it.
- When inventory is damaged, it often leads to safety problems like the push-through accident.
Read more: 9 Ways to Reduce Product Damage in Your Warehouse
Supply Chain Quarterly: labor shortages and skills deficit hampers hiring
In a recent survey by Alcot Global, 50% of supply chain executives said talent challenges were a top 3 concern for them in the coming year. The survey went on to underline the fact that we’re not losing only quantity of talent: we’re losing quality. 64% of executives said that finding suitable candidates with necessary skills was their largest hiring issue projected for the next year.
Key takeaways
- Solving the problem is a multi-faceted approach. Identify hard and soft skills needed and developing those within your organization.
- Hard skills include mechanical, electrical or other areas of function. Someone who is good at data analytics, for instance.
- Soft skills — which can be as important — are things like social skills, problem-solving skills, etc.
- Other challenges listed in the survey include lack of talent in data analytics and automation (58%), turnover issues (28%) and diversity concerns (27%).
Half of respondents listed talent as their key issue. Video: Demographics and the Labor Shortage
Quick hits
- Industrial Distribution weighs the advantages and limitations of insourcing vs, outsourcing distribution and fulfillment operations. It all boils down to your business case and goals. Insourced fulfillment lets you control customer experience, quality assurance and provides more adaptability. Outsourcing these functions reduces costs, allows more scalability and lets you focus on core competencies.
- Gen Z — the youngest sector of the workforce, at 11 to 26 years old — sees work differently than its older counterparts. Visual Capitalist charts the differences. These young workers are less social than Millennials, and prefer remote work. 45% have side hustles, while 70% claim to be looking for other jobs, even while they are satisfied with their current employer.
- According to Supply Chain Drive, manufacturing orders dipped in November.
- How hard working is your state? WalletHub explores the question. It cites a World Economic Forum statistics that underline America’s work culture, where Americans work 470 more hours a year than Germans, but almost 600 less than Columbians. American states vary: Texans (#6), Oklahoma (#14), Tennessee (#16), Missouri (#18) are examples. See the whole chart here.
Scott Stone is Cisco-Eagle's Vice President of Marketing with more than thirty years of experience in material handling, warehousing and industrial operations. His work is published in multiple industry journals an websites on a variety of warehousing topics. He writes about automation, warehousing, safety, manufacturing and other areas of concern for industrial operations and those who operate them.