Indiana Manufacturing Companies Face New Demand, Supply Chain, Labor and Automation Challenges as Pandemic Eases, Survey Finds

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INDIANAPOLIS, March 30, 2022 /PRNewswire/ — Katz, Sapper & Miller, a nationally recognized consulting, tax and audit firm, has released the results of its annual manufacturing industry survey, “2022 Indiana Manufacturing Survey: Back to Work”. Although the COVID-19 pandemic continues to be part of operations planning, the survey found that manufacturers are primarily focused on finding solutions to growing customer demand, high supply chain costs , recruiting and retention, and implementing automation tactics.

Driven by Katz, sapper and miller in partnership with Indiana University Kelley School of Business at IUPUI and the Indiana Manufacturers Associationnearly 100 IndianaManufacturing companies were surveyed throughout the first quarter of 2022 on their overall successes and challenges during the COVID-19 pandemic and their expectations for the future. The average number of employees for participating companies is 478, with the largest employing 10,500 people. Manufacturing industries represented include automotive; industrial equipment; aerospace and defense; advanced technology; Health care; furniture and household items; food and drink; chemicals, metal fabrication; paper products; signage; and more.

In 2020, manufacturers had to adjust their practices to both maintain profit margins and ensure they provided a healthy and safe environment for employees. Survey respondents this year say COVID-19 is either not a significant threat (53%) to their business, or it’s a serious impact they believe they can overcome (47%) . Additionally, most were able to maintain or improve their overall profit margins, with an average improvement of around 9% expected for 2022 compared to 2021.

“For more than a decade, respondents to our survey have said that the state of Indiana does a good job supporting manufacturers, and this year is no different. This is exemplified by the ability of businesses to weather the challenges posed by COVID-19 and stay afloat,” said Jason Patch, partner responsible for KSM’s manufacturing and distribution services group. “Thanks to state and federal support, the industry has been able to adapt and see its profits grow over the past two years. Now, it can apply that flexibility it learned during the pandemic to issues she faces today.”

During the COVID-19 pandemic, respondents to the 2020 survey prioritized the following areas of business activity as driving future change:

  • Process and automation
  • labor
  • Supply chain
  • Some products

These areas are once again surfacing as top priorities for many companies – with COVID-19 still being a benign factor.

Forty-five percent of respondents this year experienced an increase in customer demand, and this is in addition to 81% of respondents experiencing supply chain shortages. It’s worth noting that for the first time in the history of the survey, respondents answered one question unanimously: 100% agreed that material costs in their supply chains have recently increased.

It also reflects the national manufacturing climate. the Institute for Supply Management Purchasing Managers Index for January 2022 was 57.6%, down 1.2% from December 2021. This indicates that US economic activity is doing well for the 20th month in a row, but many across the country are having the same supply chain and customer demand issues. Indiana businesses are. Unfortunately, the Bloomberg Economics Dashboard shows that conditions are not expected to improve significantly in early 2022.

Along the same lines, recruiting and retaining workers was a major challenge before the pandemic, but it has exacerbated since 2020. Respondents report an average increase of 17% in labor costs, but employers need to maintain a strong workforce. In an effort to attract skilled workers to many available positions across the state, 93% of survey participants are increasing salary levels and adjusting benefits. On the other hand, 73% say the lack of workers is accelerating the need for automation, a trend that has been noted in Indiana manufacturing surveys.

“Companies are at a crossroads. They see the need to protect their businesses by bringing automation into production, but they don’t want to discourage workers from applying for jobs that need to be filled as soon as possible,” said Marc Frohlich, Associate Professor of Operations Management at IUPUI’s Kelley School of Business. “While much of this year’s data reveals many challenges, manufacturers are learning that they have many tools at their disposal to be more capable and competitive in the years to come.”

Download the full “2022 Indiana Manufacturing Survey: Back to Work” report here.

About Katz, Sapper and Miller
Katz, Sapper & Miller is a nationally recognized consulting, tax and audit firm. With our deep experience across multiple disciplines and industries, we help our clients understand where they’ve been, what’s on the horizon, what’s changing, and what they need to do to thrive in the years ahead. We leverage emerging technologies, combined with the diverse perspectives, ingenuity and creativity of our people, to help our customers solve their toughest challenges. KSM’s mission is also our passion and our commitment: we inspire great people to do great things. Learn more about ksmcpa.com.

About the Kelley School of Business on the IUPUI Campus
the Indiana University The Kelley School of Business has been a leader in business education in the United States since 1920. With an enrollment of more than 12,000 students across two campuses and online, the Kelley School is among the top business schools in the nation . Kelley offers an innovative curriculum based on personal development, teamwork, and experiential learning with an emphasis on global and social responsibility, which is reflected in the accomplishments of more than 123,000 living alumni. IUPUI’s Kelley School houses a full-time undergraduate program; a graduate certificate for health professionals, master’s and graduate certificate programs in accounting, internal auditing and taxation; the Physician MBA and the Evening MBA, which is ranked 11and in the country by US News and World Report. Learn more about kelley.iupui.edu.

About the Indiana Manufacturers Association
Founded in 1901, the Indiana Manufacturers Association is the nation’s second oldest manufacturers’ association and the only trade association in Indiana which focuses exclusively on manufacturing. Manufacturing is the engine of Indiana economy, employing more people and contributing more to Indiana gross domestic product than any other industry. The Indiana Manufacturers Association, which represents more than 1,100 companies, is dedicated to fostering a business climate that creates, protects and promotes quality manufacturing jobs in Indiana. The Indiana Manufacturers Association staff is comprised of recognized experts in areas such as tax, environment, labor relations, human resources, energy, workforce development and Health care. Learn more about indianamfg.com.

SOURCE Katz, sapper and miller


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