Manufacturers face significant cost rises due to investment in people

Manufacturers

Manufacturers’ costs have risen by over 20 per cent due to greater investment in people, say 47 per cent of manufacturing decision makers.

That’s according to research by Visual Components that surveyed respondents in the UK, US, Germany and France. For almost one-in-five (18 per cent) manufacturers these costs rise to over 40 per cent.

These figures are reflective of a widespread skills shortage in the market and the wider technology sector. Organisations need to pay more to bring in premium talent and invest in training to upskill current workers. The scale of the problem has been evidenced by over a quarter (27 per cent) stating that between 21 per cent and 60 per cent of the workforce have departed the business since July 2021, in addition to normal levels of staff turnover. These resignation waves are leaving sizable gaps in the workforce that manufacturers are struggling to fill.

With costs mounting due to talent shortages, pressure on manufacturers is also being applied from elsewhere. Almost eight-in-ten (79 per cent) state that the rise in energy costs has had at least a moderate impact in their operations. Additionally, 5 per cent of organisations are also incurring over £500,000 in costs due to a mistake in the manufacturing process.

44 per cent of decision makers also say that between 21 per cent and 60 per cent of their operations are being held back from being updated with new technologies due to continued cost pressures, presenting a blocker to digital transformation strategies. This challenge arises at a time where customer expectations are also escalating, with almost two-thirds (60 per cent) acknowledging this trend.

“Manufacturers are fighting the threat of cost rises from all sides, not least due to the shortage of skilled workers. To ease the financial strain, organisations need to focus on how they can help their talented people thrive and ensure retention and attraction of key individuals. Technology such as simulation software can support humans in the business with an intuitive and easy-to-use interface, allowing them to bring efficiencies to the wider organisation,” said Mikko Urho, ceo at Visual Components.

Currently, only 21 per cent of organisations use simulation software to understand the financial impact on OEE, cycle times and/or production costs, highlighting its potential in helping manufacturers to reduce costs during turbulent economic periods.

Visual Components is one of the pioneers of the 3D manufacturing simulation industry. The organisation is a trusted technology partner to a number of leading brands, offering machine builders, system integrators and manufacturers a simple, quick and cost-effective solution to design and simulate production processes. To move to its next stage of growth and enhance its product offering, Visual Components has acquired Delfoi, a pioneer company in robot offline programming (OLP) software solutions.

Related Posts
Others have also viewed
Supply chain

Will technology save the supply chain?

It is no surprise that events in recent years have led to supply chain shortages ...

Businesses fail to achieve highly resilient connectivity as commodity IoT providers fail to deliver

A new State of IoT Adoption report launched today by Eseye, a leading global IoT ...

Working in harmony to propel the energy transition forward

To reach net zero, we need new technologies and solutions that work in harmony with ...

Investing in data governance is a non-negotiable for GDPR compliance

Since the General Data Protection Regulation (GDPR) went into effect in the EU five years ...