How Are Fabricated Metal Manufacturers Adapting to New Market Demands?

How Are Fabricated Metal Manufacturers Adapting to New Market Demands?

The mood is buoyant in fabricated metal manufacturing. 96% of organizations predict their sales and revenue will increase this year, according to new Aptean research, driven by recovery and growth in the construction and commercial air travel sectors.

But while confidence is high, metal fabricators are operating in markedly different conditions than they were 18-24 months ago. The pandemic and other global events have impacted people, processes, suppliers and customer relationships. And managing these changes means becoming more agile and technology-driven.

A cloud-based IT environment is a prerequisite for supporting work at distributed locations and from mobile devices. Only with a well thought-out cloud strategy can companies provide their employees with the tools and IT environment they need to work outside of the office. It should be noted that in most cases the aim is not to completely switch to home office, but rather hybrid work models that combine the workplace in the company with mobile or remote work.

To help fabricated metal manufacturers navigate changing market demands, Aptean has produced a new ebook, Pedal to the Metal: How Can Fabricated Metal Manufacturers Accelerate Company Growth?

Here are four of the key challenges our ebook covers—along with strategic guidance on how to meet industry challenges head-on:

Challenge 1: Finding Skilled Manufacturing Workers Although the level of automation in manufacturing is increasing, people are still pivotal to business success. Yet many organizations are struggling to maintain their full workforce. 44% of the fabricated metal manufacturers we surveyed said skills shortages were their top barrier to growth in 2022, while 28% cited staff shortages as being a critical issue. As metal fabrication has a higher percentage of smaller businesses than many other manufacturing sectors, shortage of ‘boots on the ground’ can significantly impact production rates, which in turn affects customer delivery capabilities. Rather than worrying about recruitment issues, however, many manufacturers are looking at how to strengthen the role and value of their existing workforce. And digital manufacturing software plays a pivotal role in maximizing employee productivity. Our research found that 62% of fabricated metal manufacturing companies want to formally capture insights through technology, to minimize the impact of staffing changes. And half (52%) want better contingency planning, so that tech can enable their employees to work effectively, even during periods of market volatility.

Challenge 2: Dealing With Supply Chain Disruption The pandemic and other global events disrupting the manufacturing supply chain have been well documented. But they’re still a major discussion point for metal fabricators, who are facing continued material shortages and delays. 56% of the fabricated metal manufacturers who participated in our research said their lead times remain longer than usual, which is much higher than the general manufacturing industry average of 32%. And these delays are impacting the end customer experience; 64% admitted to extending customer deadlines as a result of supply chain issues. While supply network constraints are beginning to ease, fabricated metal manufacturers need to reorganize the supplier model to protect their business from future disruptions. But how?

For most metal fabricators, supply chain technology is the solution. Only 28% of organizations have automated supplier management currently, which is much lower than the general manufacturing industry average of 42%. Deploying digital workflows will enable manufacturers to view the impact of supply changes and respond quickly to future disruptions, to limit their overall impact. It’s also worth noting that 56% of fabricated metal manufacturers intend to spread their orders across a wider number of suppliers in 2022, with many investing in nearshore sourcing to counteract international vulnerabilities.