COVID-19 Drives Industry 4.0 — and Reshoring

Resiliency concerns revealed by the COVID-19 pandemic are driving both reshoring and digital transformation. A realignment of priorities towards risk mitigation, agility, responsiveness and faster time-to-market are encouraging companies to shorten supply chains and reshore; 47 percent of small and medium-sized manufacturers (SMMs) are reevaluating supply chains. To be cost-competitive, domestic manufacturers are looking to adopt Industry 4.0 technologies to close the labor price gap. New technologies are a game changer in achieving U.S. competitiveness and reshoring. Digital Adoption A November 2020 survey of SMMs by The Manufacturing Institute’s Center for Manufacturing Research and BKD revealed that more than 77 percent of respondents were making technological investments at their businesses to cut costs in the production process, with 73 percent doing so to improve efficiency. A PWC study found that the lion’s share of manufacturers are investing in digital factories for efficiency gains (98 percent). Investments in digital manufacturing yield leaner, more productive operations via integrated planning, better asset utilization, lower quality costs and cost benefits from automation.