A recent survey from Deloitte, 2024 Manufacturing Outlook, looked at the changes expected with the supply chain.
First a look at where the supply chain was last year. Despite the ongoing fallout from the pandemic, the report found that in the past year manufacturers saw a gradual improvement in delivery times. While average delivery time in July 2022 hit an all-time high of 100 days, by August 2023 that number had dropped to 87 days. While the authors of the report note this is a notable improvement, the average lead time for production materials has not returned to pre-pandemic levels.
One factor contributing to continued supply chain delays, which have continued for more than 30 months, is ongoing shortages in components such as electrical, electronic, and semiconductor parts, the report notes. There should be an improvement in the future, given the enactment of the CHIPS Act, which has increased investment in the semiconductor sector. The first plant is expected to begin production in 2024, followed by additional plants coming online in 2025.
“While this is expected to increase the domestic supply of chips, it may be a few years before these production facilities can make a significant dent in the ongoing semiconductor shortages, often affecting the manufacturing industry,” the report says. Another factor which will cause an increase in demand for semiconductors as well as electronic components is the growth in clean technology spurred by the Infrastructure Investment and Jobs Act (IIJA).
To address these issues manufacturers are looking to continue to digitize their supply chains. According to a recent Deloitte survey, 76% of manufacturers are adopting digital tools to gain enhanced transparency into their supply chain. Some companies are moving into using the metaverse as well. The survey found that manufacturers have also started experimenting with and implementing industrial metaverse use cases to fortify supply chain resilience. In the 2023 Deloitte and MLC industrial metaverse study, 21% of respondents said they are using metaverse technologies to elevate their supply chain ecosystem.
Also, distributed ledgers such as blockchains, or smart contracts, which automate contract execution within blockchains, are gaining interest from some manufacturers. About one-quarter of manufacturers surveyed plan to implement these technologies within the next year, hinting at a potential new wave of adoption and innovation.