Tracking

2024 State of Manufacturing Report

We surveyed over 178 leaders in engineering, supply chain, manufacturing, and product development to identify developing trends and gather key insights — so you can succeed in 2024 and beyond.

By signing up, you agree to our Terms of Use and Privacy Policy. We may use the info you submit to contact you and use data from third parties to personalize your experience.

Introduction

The Future in the Making. After four years of unprecedented global disruptions, the industry has redefined what battle-hardened, world-class manufacturing and supply chain teams need to succeed in 2024 and beyond: Greater speed and efficiency, higher revenue, lower costs, and more resilience and agility than ever before. For some, that means integrating AI solutions into operations. Others are leveraging regionalization to find some kind of equilibrium. These teams face numerous pressures ranging from election uncertainty to heightened concerns about trade wars and the global economy.

As in prior years, optimizing supply chain management and minimizing risk is the focus of most manufacturing leaders in 2024.

However, spurred by efficiencies identified using AI and other technologies and some reduction in barriers to new product innovation, there are signs that the industry has found something closer to firmer ground in its quest for further stability and predictability.

"The last four years have redefined what top performing operations and supply chain teams need to succeed in a tough economic environment.”

Dave Evans

CEO, Fictiv

Dave Evans, CEO, Fictiv

Executive Summary

THE ECONOMY

This election year, economic challenges most impact company strategy, labor costs, and shortages.

89%


say they are concerned trade wars might escalate in the next few years.

47%


report economic headwinds as critical to overall company strategy.

39%


note that labor costs and shortages remain a concern for manufacturing leaders. 

21%


expect election uncertainty to impact their strategy.

The Economy Key Takeaway

Executive Summary

SUPPLY CHAIN MANAGEMENT

Supply chain management is entrenched at the forefront as barriers to innovation ease.

54%

say improving manufacturing and supply chain visibility is the top business priority for the third year.

48%


report improving supply chain resilience and agility comes in a close second.

15%


report they have no barriers to innovation—its highest level in four years. 

86%


are considering global tensions in long-term planning.

Supply Chain Key Takeaway

Executive Summary

AI & Manufacturing

Last year’s enthusiasm for AI has been operationalized and is substantially impacting the industry.

88%

of respondents have implemented AI in manufacturing and supply chain operations.

87%


of respondents agree that “Implementing AI into manufacturing is vital to my company's future success.”

78%

report that the long-term impact of AI will enable a reduction in planned hiring.

84%


say AI implementations are currently providing value.

AI Key Takeaway

Executive Summary

SUSTAINABILITY

Results show continued prioritization of sustainability goals and programs.

77%

report that the importance of sustainable manufacturing is increasing at their companies.

53%


have embedded sustainability into their company goals.

42%

are prioritizing investments in sustainable manufacturing, which has been holding steady since 2023.

45%


have developed or adopted standardized reporting models.

Sustainability Key Takeaway

The Economy & The Election

The Economy & The Election

In 2024, the global manufacturing industry is navigating significant economic challenges, including supply chain disruptions, geopolitical tensions, and labor shortages. These factors influence decision-making and strategic planning at every level. Economic fluctuations in consumer demand can swiftly alter production schedules, investment plans, and market strategies.

Given the instability of the last few years, it’s not surprising that concerns about the economy continue to impact company strategy.

Survey respondents report that “economic headwinds” (inflation, interest rates, and the risk of recession) are most likely to influence their 2024 strategy, along with labor costs and shortages (39%), increasing competition (33%), and pressure to drive profitability (30%). Driven by a volatile economy and shifting company goals, companies are looking for ways to navigate significant challenges. These trends are consistent with prior years.

“In the past four years, we’ve noticed a big shift away from growth at all costs to revenue at all costs.”

Sabrina Paseman

General Partner,
Omni Venture Labs

Sabrina Paseman, General Partner, Omni Venture Labs
Macroeconomic Trends Impacting 2024 Strategies Fig. 1: Macroeconomic trends impacting 2024 strategies
Concern About Potential Trade Wars fig. 2 Concern about potential trade wars
Global Tensions & Supply Chain Planning fig. 3 Global tensions & supply chain planning

THE ELECTION, TRADE WARS, & GLOBAL TENSIONS

It’s an election year in the U.S., but uncertainty around the election outcome only impacts a modest percentage (21%) of company strategies. Still, 89% are either “somewhat” or “very” concerned about the possibility of escalating trade wars in the next few years, and 86% say global tensions are a consideration for long-term supply chain planning. These findings make sense, given that both candidates have a track record of trade policies that impact the manufacturing sector.

It’s also apparent that the broader geopolitical uncertainty of the last few years persists.

The Economy Key Takeaway

The Economy Key Takeaway

This election year, economic challenges most impact company strategy, along with labor costs and shortages.

Supply Chain Risk Management

Supply Chain Risk Management

In light of these concerns, it’s not surprising that supply chain visibility is the number one business priority for the third year in a row, followed by supply chain resilience and agility. After all, knowing where materials, goods, and parts are within the supply chain enables leaders to optimize each project and respond quickly to potential disruptions.

“With global trade increasingly susceptible to extreme weather and regional conflicts (e.g. Houthi attacks on container ships in the Red Sea), supply chain visibility and agility are as important as ever."

Andy Sherman


GM-U.S., Fictiv

Andy Sherman, GM-U.S., Fictiv

“Manufacturing and supply chain leaders are focused on improving supply chain resilience. Improving supply chain visibility and, by extension, efficiency are keys to making that happen.”

Sabrina Paseman

General Partner, Omni Venture Labs

Sabrina Paseman, General Partner, Omni Venture Labs
Top Business Priorities 2022 - 2024 fig. 4 Top business priorities 2022 - 2024

BARRIERS TO NEW PRODUCT INNOVATION

Despite the focus on supply chain priorities, companies haven’t lost sight of the importance of clearing speed bumps in the path of new product innovation and introduction (NPI). While barriers to new product innovation are a persistent theme between 2021 and 2024, there are some signs of hope here. It seems that improvements to rigid internal supply chain processes have contributed to the fewest reported barriers to NPI in at least 4 years.

Barriers to New Product Innovation fig. 5 Barriers to new product innovation

Barriers are still a concern, however. Specifically, sourcing fast, high-quality options to manufacture low-volume builds (43%), slow feedback loops with manufacturing partners that extend production time (41%), and friction created by poor cross-functional visibility into projects (37%).

We see additional improvements in the time engineers spend on vendor sourcing, management, quote, and order activities every week. There’s a notable decrease in the percentage reporting 8 or more hours, with the most significant percentage spending between 4 and 6 hours per week doing these tasks. The hope is that as more technologies take hold, automation will help defray some of the time spent on procurement.

Technology Solutions to Drive Efficiency

To solve similar challenges, many manufacturing leaders are turning to on-demand manufacturing (72%) and/or are actively evaluating technology solutions to increase company-wide operational efficiency for new product development (77%). This speaks to the general drive to find more efficiencies overall, as well as the need for lower operational costs associated with manufacturing and supply chain management.

The benefits of using on-demand manufacturing pair well with top business priorities, with most respondents reporting faster development cycles (57%), improved manufacturing quality (49%), and improved transparency and visibility (48%).

Another benefit is the ability to shift production to a variety of manufacturing regions around the world. Let’s look at how regionalization strategies are evolving this year.

Engineering Time on Sourcing Activities fig. 6 Engineering time on sourcing activities
Technology for Efficient Product Development fig. 7 Technology for efficient product development
Use of On-Demand Manufacturing Partners fig. 8 Use of on-demand manufacturing partners

"These results show that on-demand manufacturing offers greater agility, cost-effectiveness, and responsiveness to market demands." 


Uday Shenoy

GM-India, Fictiv

Uday Shenoy, GM-India, Fictiv
The Benefits of Using On-Demand Manufacturing fig. 9 The benefits of using on-demand manufacturing

Regionalization Strategy to
Mitigate Supply Chain Risk

It appears the momentum towards on-shoring caused by recent years’ global disruptions, trade policies, and other economic drivers has slowed. While increasing U.S. manufacturing (on-shoring) remains the leading supply chain strategy for the third year (66%), it has fallen substantially since last year. At the same time, North American production (near-shoring) has increased again this year (53%). In this case, near-shoring is defined as manufacturing in Canada and Mexico. Diversifying global manufacturing operations (off-shoring) has also gone up slightly since last year.

“Onshoring is important from a sustainability standpoint, but it’s still costly and just isn’t within the realm of economic possibility for many companies.”

Sabrina Paseman


General Partner,
Omni Venture Labs

Sabrina Paseman, General Partner, Omni Venture Labs
Regionalization Strategy 2022 - 2024 fig. 10 Regionalization strategy 2022 - 2024
fig. 11 Regionalization strategy geography

“We believe companies are trying to make their supply chains more resilient to potential geopolitical volatility, in part by moving more manufacturing to North America.”


Valerie Shen


Partner & Chief Operating
Officer,
G2 Venture Partners

Valerie Shen, Partner & Chief Operating Officer,
G2 Venture Partners

When asked where they’re most likely to outsource, most manufacturing leaders indicate Mexico and Latin America (47%), with additional interest shown in Northeast Asia (36%) and Eastern Europe (31%).

Lack of Supply Chain Resources fig. 12 Lack of supply chain resources

Lack of Supply Chain Resources

Another area of focus for survey respondents is the scarcity of supply chain resources. In fact, 81% identify insufficient budgets, high workforce costs, and labor shortages as hindering effective supply chain management. Coupled with the identified priorities around supply chain visibility, this is a crucial area for continued improvement. And companies are turning to novel solutions to address these shortages.

Supply Chain Key Takeaway

Supply Chain Key Takeaway

The top business priority is improving manufacturing and supply chain visibility, followed by resilience and agility.

INDUSTRY INSIGHTS

2024 State of Manufacturing Report



We surveyed over 178 leaders in engineering, supply chain, manufacturing, and product development to identify developing trends and gather key insights — so you can succeed in 2024 and beyond.

By signing up, you agree to our Terms of Use and Privacy Policy. We may use the info you submit to contact you and use data from third parties to personalize your experience.

Excitement Over AI Continues, With Implementation Now Primary Focus

Excitement Over AI Continues with Implementation Now Primary Focus

Last year, excitement about AI and other technologies drove some notable developments, including implementing and applying AI to manufacturing and supply chain operations.

Building on last year’s excitement around new technologies and spurred by continued challenges with labor costs and shortages, improving supply chain operations has become the leading focus of AI implementations for most of the industry. This makes sense given that 84% of leaders say implementations of AI are currently providing value, although they’re split on the degree of value provided.

“We have historically believed that manufacturing is an old-school industry that is harder for new technology to break into. Despite this, data in this year’s State of Manufacturing Report indicates manufacturing leaders are broadly recognizing the importance of AI.”


Valerie Shen

Partner & Chief Operating
Officer,

G2 Venture Partners

Valerie Shen, Partner & Chief Operating Officer,
G2 Venture Partners
Importance of AI in Manufacturing fig. 13 Importance of AI in manufacturing

Value of AI to Supply Chain and
Manufacturing Operations

When rating the value they receive from the use of AI in manufacturing and supply chain operations, 43% state the value is “high” while 41% report it’s “marginal.” In 2024, it’s clear that expectations for AI have become implementations that are already generating some value.

Implementing AI in 2024

87% report that “implementing AI into manufacturing is vital to my company’s future success.” And AI is the second most cited impact on companies’ 2024 strategies (45%). Supply chain management, product design, and quality control and inspections top the list of implementations.

Alt: 78% Say AI is Impacting Their Hiring Strategy
The Value of AI in Manufacturing and Supply Chain Operations fig. 14 The value of AI in manufacturing and supply chain operations
2023 Expectations of AI In Manufacturing fig. 15 2023 expectations of AI in manufacturing
2024 Implementation of AI fig. 16 2024 implementation of AI

AI AND HIRING

Part of the ongoing excitement about AI relates to finding a solution to persistent labor shortages. AI can help fill some of the labor gaps by automating routine, time-consuming tasks and freeing skilled workers to be more productive and innovative. At the same time, the majority of companies report AI is already enabling hiring reductions, with 78% reporting that AI will help them reduce planned hiring and/or will impact hiring in the next two years. The long-term impacts of AI remain to be seen.

Sentiment Toward AI Impacts On Your Business fig. 17 Sentiment toward AI on your business
78% Say AI is Impacting Their Hiring Strategy

“The value of AI is the ability to take on rote, mechanical tasks that happen in manufacturing and supply chain management, and refocusing individuals on doing higher-level, more productive, creative work.”


Dave Evans

CEO & Co-Founder,
Fictiv

Dave Evans, CEO, Fictiv
AI Key Takeaway

AI Key Takeaway

Leaders continue to be excited about AI but have moved toward implementation- especially in supply chain operations.

Sustainability Commitments Hold

Sustainability Commitments Hold

Given the continued economic and workforce concerns highlighted since last year’s Sustainability in Manufacturing Report, it’s notable that prioritizing investments in sustainable manufacturing remains steady for a second year for 40% of respondents  (fig. 4, Supply Chain Risk Management.)

Smaller companies still trail their larger peers, and there’s a continued rounding-out of the stated importance of sustainable manufacturing since 2021, with fewer reports of it increasing to the highest levels of corporate history and a significant increase in those who report no change in importance.

Compared to last year, this year’s responses indicate a better consensus among executive leadership as functional leaders tackle the realities of championing sustainability in a challenging economic environment.

The tension between sustainability aspirations and the reality of the true costs is a factor that has huge implications for the ability of companies to achieve their sustainability goals.

“From a carbon reduction standpoint, on-shoring or near-shoring makes sense.
From a cost perspective, it might be more economical to manufacture in China or Mexico. That’s what most supply chain leaders are confronting - the tension between sustainability and cost.”

Nate Evans

CXO & Co-Founder,
Fictiv

Nate Evans, CXO & Co-Founder, Fictiv

ActionS to Achieve Sustainability Goals

Whereas last year’s survey focused on challenges, we wanted to learn more about how companies are tackling their sustainability goals this year. Although only 34% have set a net-zero or carbon reduction goal, embedding sustainability in company values (53%) and developing a formal plan (52%) are critical to progress. In contrast to the 31% who reported having “no practical plan” last year, 45% of this year’s respondents have developed or adopted standardizing reporting models.

“It’s clear that companies are setting sustainability goals and taking action, and the vast majority feel sustainable manufacturing is increasing in importance.”


Valerie Shen

Partner & Chief Operating
Officer,

G2 Venture Partners

Valerie Shen, Partner & Chief Operating Officer,
G2 Venture Partners
Importance of Sustainable Manufacturing fig. 18 Importance of sustainable manufacturing
Actions to Achieve Sustainability Goals fig. 19 Actions to achieve sustainability goals
Sustainability Key Takeaway

Sustainability Key Takeaway

Results show continued prioritization of sustainability goals and programs.

Looking Ahead

 

Supply chain and manufacturing leaders face persistent challenges and economic uncertainty, which is heightened by election year considerations.
Yet there are reasons to be optimistic, including the increased availability of technology solutions like digital, on-demand manufacturing and AI.

Gaining visibility, resiliency, and agility and embracing new technologies to solve manufacturing and supply chain challenges is critical to success.

“To meet their increasingly aggressive revenue and cost targets, supply chain teams need to be agile, find operational efficiencies, and utilize technology to surface opportunities for savings in 2024. It’s clear we’re at an inflection point where those embracing change will win!” 


Dave Evans


CEO & Co-Founder,
Fictiv

Dave Evans, CEO, Fictiv

Meet The Experts

Every year, we ask experts to offer insights and analysis of the State of Manufacturing findings. This year we were assisted by the following:

Valerie Shen, Partner & Chief Operating Officer,
G2 Venture Partners

Valerie Shen

Partner & COO, G2 Venture Partners

Dave Evans, CEO, Fictiv

Dave Evans


CEO & Co-Founder, Fictiv

Sabrina Paseman, General Partner, Omni Venture Labs

Sabrina Paseman


General Partner, Omni Venture Labs

Nate Evans, CXO & Co-Founder, Fictiv

Nate Evans


CXO & Co-Founder, Fictiv

Uday Shenoy, GM-India, Fictiv

Uday Shenoy


GM-India, Fictiv

Andy Sherman, GM-U.S., Fictiv

Andy Sherman

GM-U.S., Fictiv

Survey Methodology

This is Fictiv’s ninth annual report conducted with Dimensional Research. The report surveyed 178 Director-level decision-makers who work in engineering, supply chain, R&D, and digital innovation roles for companies that produce consumer electronics, medical devices, automotive, industrial and robotics, aerospace, or energy.

About

Fictiv

Fictiv is a global manufacturing company that simplifies sourcing for custom manufacturing, from prototype to low-volume production. Through its highly-vetted manufacturing network, AI-powered technology platform, and global operations centers across the USA, Mexico, India, and China, Fictiv delivers fast, high-quality custom manufacturing services from quote to delivery. Fictiv’s capabilities span the full mechanical bill of materials, including Injection Molding, Compression Molding, 3D Printing, CNC Machining, Urethane Casting, Die Casting, and Sheet Metal. To date, Fictiv has delivered more than 30 million commercial and prototype parts for early-stage companies and large enterprises alike, helping them innovate faster, free up precious resources, and drive profitable growth.

Dimensional Research

Dimensional Research® provides practical market research to help companies make smarter business decisions by delivering actionable information to reduce risks, increase customer satisfaction, and support growth. Whether launching a new product into the marketplace or desiring fresh insights from buyers, our research services help companies gain a clear understanding of customer and market dynamics.

G2 Venture Partners

G2 Venture Partners is a venture and growth firm investing in transformative technology companies, like Fictiv, at their inflection points building a sustainable future. We support entrepreneurs who are unlocking new paths to environmentally and socially responsible economic growth.

Omni Venture Labs

Omni Venture Labs is a “first check” DeepTech VC. Led by former Apple product and manufacturing experts, our mission is to invest at the frontier of Sustainable Industrials + AI, Robotics, and Automation.

INDUSTRY INSIGHTS

2024 State of
Manufacturing Report

We surveyed over 178 leaders in engineering, supply chain, manufacturing, and product development to identify developing trends and gather key insights — so you can succeed in 2024 and beyond.

By signing up, you agree to our Terms of Use and Privacy Policy. We may use the info you submit to contact you and use data from third parties to personalize your experience.