Many manufacturers slow to adopt internet of things, Sikich report finds

The internet of things (IoT) can help manufacturers improve customer service, field and plant maintenance work, and inventory management. However, the 2018 Manufacturing Report from Chicago-based professional services firm Sikich found that fewer than 10 percent of those surveyed currently use IoT technologies. Further, 30 percent said they have no clear understanding of the IoT.

A lack of technological advancement goes beyond the IoT. 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 to 18 months, only 19 percent of respondents said they are “very ready” to address cybersecurity risk. Sixty-three percent of respondents believe they are only “somewhat ready.”

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 before having an open position.

The 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 R&D 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.

To access the report and survey results, visit www.sikich.com/insight/2018-manufacturing-report.