5 Manufacturing Trends Driving Global Growth in 2016

As 2016 unfolds, it’s essential to anticipate the forces reshaping 21st‑century manufacturing worldwide. The entire supply‑chain ecosystem—manufacturers, distributors, and retailers—is undergoing a profound business transformation, driven by shifting consumer expectations, accelerated time‑to‑market, and fierce global competition amplified by the Internet and mobile economies.

Technological breakthroughs, coupled with evolving labor demographics, are the linchpins of this new model. To stay profitable, retailers must move products faster and at competitive prices, creating a ripple effect that forces manufacturers to shorten production cycles and distributors to cut delivery times.

Stakeholders across the chain have no alternative but to pivot their strategies to meet demand and boost margins. Technology is the catalyst that keeps businesses relevant in these dynamic times. Below are five manufacturing trends poised to shape the industry in 2016:

1. Adoption of the SMAC Stack for Speed and Agility
   Social, Mobile, Analytics, and Cloud—collectively known as SMAC—are becoming essential tools for manufacturers. This stack drives higher customer engagement, unlocks growth opportunities, and forces cultural change within an industry traditionally resistant to rapid innovation.
2. Social Media Reshaping Business Models
   According to the IDC white paper "The Future of Manufacturing" (sponsored by Infor), social media is pushing manufacturers toward a customer‑centric approach. The traditional B2B model is eroding as connected consumers demand instant, on‑demand access to products. Brands are now navigating a shift toward B2B2C relationships.
3. Internet of Things (IoT) Enhancing Automation and Workforce Value
   A renewed emphasis on science and engineering education is equipping a new generation of workers to manage sophisticated systems. IoT enables condition‑based maintenance, reducing labor and service costs while freeing talent for R&D and innovation.
4. Increased Capital Investment in Innovation
   Despite a sluggish economic recovery, recent government and industry reports show a rise in capital expenditure. Manufacturers are channeling funds into plant upgrades, advanced equipment, and cutting‑edge technologies to capture value through design and speed to market.
5. The Rise of Next‑Shoring
   Higher wages in Asia, rising shipping costs, and the need for rapid time‑to‑market are prompting companies to shift production closer to end markets. Next‑shoring—manufacturing near the point of sale—accelerates inventory replenishment, reduces warehousing and shipping costs, and meets retailer and consumer expectations.

These trends represent game‑changing forces that will redefine manufacturing in 2016. Watching how they evolve will offer valuable insights into the industry’s future trajectory.

Michael Kotelec, global practice leader for Verizon Enterprise Solutions, brings over two decades of manufacturing experience to his analysis.