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A look back at the top manufacturing supply chain disruptions and challenges in H1 2024, including key industry news and exclusive Resilinc data.
The landscape of manufacturing—a diverse sector encompassing the production of automobiles, electronics, heavy equipment, steel, and more—is currently undergoing significant transformations. Nations are reclaiming production processes within their borders, channeling substantial investments into reshoring. At the same time, companies are navigating the terrain of Industry 4.0—embracing smart manufacturing and integrating AI and machine learning technologies to build manufacturing supply chain resiliency.
Amidst these pivotal shifts and mounting responsibilities, the industry braces itself for a looming labor shortage projected to reach critical levels by 2030. How is the industry adapting to these changes and grappling with the ensuing disruptions? In this blog, we explore Resilinc’s data from the first half of 2024 to unravel the primary disruptions affecting the manufacturing landscape.
Top Manufacturing Supply Chain Disruptions in H1 2024
Manufacturing supply chain disruptions are on the rise. According to Resilinc’s AI monitoring system, EventWatchAI, the industry experienced 10,629 potential disruptions in H1 2024, up from 8,197 the previous year—a 30% increase.
EventWatchAI categorizes supply chain disruptions into 50 event types and 400 risk types, from extreme weather and industrial accidents to labor issues and more. Looking at these categories, the top manufacturing supply chain disruptions for H1 2024 were:
- Factory Fires (1,298 disruptions)
- Labor Disruptions (1,047 disruptions)
- Merger & Acquisition (837 disruptions)
- Leadership Transition (836 disruptions)
- Factory Disruptions (788 disruptions)
Factory Fires and Factory Disruptions—Rebuilding and Reshoring
While factory fires remained the top disruption since 2019, the number of factory fire disruptions in manufacturing declined by 21% from H1 2023 to H1 2024. Resilinc tracked this trend across all industries last year, noting a 20% decrease in factory fires in 2023 compared to the record high in 2022. This decline can be attributed to reestablishing safety protocols after the pandemic. Factory fires saw an uptick during the pandemic due to a lack of employees able to perform regular maintenance and procedures. Now that working conditions have returned to normal, manufacturers are seeing fewer factory fires.
Factory disruptions, on the other hand, experienced an increase of nearly 40% from H1 2023 to H1 2024. This includes strikes, shutdowns, production halts, warnings, citations, and labor accidents. Reshoring may be contributing to the rise in factory disruptions. Learn more about the challenges of reshoring chip manufacturing in our special report. As companies move production back to the US and other countries, some may shut down overseas locations. Currently, companies are building manufacturing facilities in the U.S. at an unprecedented pace. According to the U.S. Census Bureau, spending on U.S. manufacturing rose to an annual rate of $114.7 billion in 2022—a 40% increase year-over-year. These accidents may be partly due to labor shortages, which force employees to pick up extra work, learn on the job faster, and scramble to fill in the gaps for missing talent.
Labor Disruptions—Talent Shortages
In H1 2024, manufacturing experienced a notable surge in labor disruptions, with 1,047 disruptions, marking a 42% increase compared to H1 2023. Labor disruptions include strikes and protests, which jumped a dramatic 421% across all industries tracked by Resilinc in H1 2024. Notable manufacturing strikes this year include Samsung, Bombardier, and Boeing. Learn more about H1 2024 manufacturing disruptions in our manufacturing supply chain management report.
This uptick can be attributed to manufacturing supply chain challenges within the industry, such as low wages, an aging workforce, and a scarcity of skilled labor. Manufacturing isn’t alone in dealing with labor shortages. Resilinc CEO Bindiya Vakil named labor disruptions one of the top supply chain megatrends of 2024, calling it the “biggest disruption of our time.” However, manufacturing will be especially impacted by these labor shortages. According to experts at Deloitte and The Manufacturing Institute, 2.1 million manufacturing jobs could go unfilled by 2030; the total cost of these missing jobs would be $1 trillion.
Mergers & Acquisitions and Leadership Transitions—Pursuing New Technology
Coming in third in our list of manufacturing supply chain disruptions, Mergers and Acquisitions experienced 837 disruptions in H1 2024. Leadership Transitions saw a significant spike, growing 92% from 435 disruptions in H1 2023 to 836 disruptions in H1 2024. There is an ongoing trend toward consolidating manufacturing and mitigating risks, with larger companies acquiring smaller firms to gain scale, expand product offerings, and increase market share. To combat potential supply chain disruptions, companies are building redundant capabilities in multiple regions. Companies are also pursuing M&A strategies focused on acquiring enhanced technologies like artificial intelligence, machine learning, and predictive maintenance to drive innovation, according to PWC, which is part of Industry 4.0, a push to automate manufacturing.
Investing in Manufacturing Supply Chain Visibility
While the global landscape is changing, manufacturers are adapting. Successful manufacturers are investing in quality data and sub-tier visibility by mapping their suppliers and their suppliers’ suppliers. Read our case study to learn how one manufacturer improved automotive supply chain resiliency with Resilinc.
Companies are starting to recognize the importance of investing in supply chain resilience and visibility to navigate ongoing disruptions like factory disruptions and labor shortages. They also realize the need for accurate and actionable data, especially when it comes to reshoring and building new facilities. As the manufacturing landscape continues to evolve, now is the time to learn how to improve your manufacturing supply chain resiliency.
