Many manufacturers slow to adopt internet of things, Sikich report finds
Professional services firm's fourth annual report reveals manufacturers and distributors' business challenges and priorities
CHICAGO, June 12, 2018 /PRNewswire/ -- The internet of things (IoT) can help manufacturers improve customer service, field and plant maintenance work, inventory management, and more. However, the 2018 Manufacturing Report from professional services firm Sikich found that fewer than 10 percent of those surveyed currently use internet of things technologies. Further, 30 percent said they have no clear understanding of the internet of things.
"Manufacturers of all sizes can benefit from the internet of things, but too many lack the necessary understanding of the benefits and fail to embrace these transformative technologies," said Jerry Murphy, partner-in-charge of Sikich's manufacturing and distribution practice. "As a result, many manufacturers and distributors miss out on significant operational improvements and efficiency gains across the supply chain, which can put them at a competitive disadvantage."
A lack of technological advancement goes beyond the internet of things. The report also found that nearly 40 percent of respondents don't use robotics for any of their operations.
Additionally, the report revealed warning signs for manufacturers when it comes to protecting their data and intellectual property. Though more than three-fourths of respondents said they had not experienced a cybersecurity incident in the last 12-18 months, only 19 percent of respondents say they are "very ready" to address cybersecurity risk. Sixty-three percent of respondents believe they are only "somewhat ready."
"Cybersecurity threats will only increase as technology becomes even more integrated into manufacturing operations," said Brad Lutgen, a partner in Sikich's security and compliance practice. "That's especially true given the rapid adoption of IoT devices. Manufacturers must therefore have security programs in place to address the ever-changing threats. At a minimum, a company's program should include conducting regular risk assessments, penetration testing and vulnerability assessments to gauge its current security posture. Manufacturers should also put in place vendor management programs to vet third-party technologies to make sure that vendors adequately test for security vulnerabilities."
Manufacturers continue to struggle to fill open positions
The manufacturers and distributors surveyed cited a "lack of qualified workers" as a top barrier to growth. Further, 77 percent of respondents said it takes three to more than eight weeks to fill an hourly position.
Still, the report suggests that companies aren't doing enough to proactively recruit and develop talent. Only 3 percent of respondents said they recruit employees at the high school level, and only 11 percent said they build a pipeline of talent prior to having an open position.
"To remain competitive, manufacturers must turn talent recruitment and development into a core corporate priority," said Joy Duce, partner-in-charge of Sikich's human resource consulting services practice. "Companies should work with high schools and vocational schools to promote manufacturing jobs and attract the next generation of talent."
A focus on organic growth and R&D
The Sikich report found that, compared to 2017, fewer manufacturers said they are "more optimistic" about the U.S. economy (66 percent compared to 75 percent in 2017) and more said they are "less optimistic" (11 percent compared to 5 percent in 2017). Still, as they eye growth, companies continue to target existing domestic markets. Manufacturers ranked organic growth in an existing domestic market as their biggest opportunity, followed by new product or service development. As they seek to develop new products and services, 60 percent of respondents said they use research and development tax credits, up from 52 percent in 2017.
But, amid a push for business growth, many manufacturers still lack long-term succession plans. Only 25 percent of respondents have a written plan to exit the business.
For the 2018 Manufacturing Report, Sikich surveyed more than 200 respondents from companies across industrial sectors, including metal fabrication, industrial equipment, food and beverage, OEM equipment, chemicals and petroleum, automotive, plastics, and wholesale/distribution.
Access the full report, including survey results and insights from Sikich technology, accounting, human resources, investment banking and supply chain experts, here.
About Sikich LLP
Sikich LLP, a leading professional services firm specializing in accounting, technology, investment banking* and advisory services**, has more than 750 employees throughout the country. Founded in 1982, Sikich now ranks as the country's 28th largest Certified Public Accounting firm and is among the top 1 percent of all enterprise resource planning solution partners in the world. From corporations and not-for-profits to state and local governments, Sikich clients can use a broad spectrum of services and products that help them reach long-term, strategic goals.
*Securities offered through Sikich Corporate Finance LLC, member FINRA/SIPC.
**Investment advisory services offered through Sikich Financial, an SEC Registered Investment Advisor.
SOURCE Sikich LLP
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