"The coming year will be challenging to say the least," Bob Parker, vice president of research at Manufacturing Insights, writes at IndustryWeek. "However, many manufacturing companies are viewing this pause, coming after six years of fairly steady profitable growth, as an opportunity to recalibrate their business models and invest for the inevitable recession."

Overlooking new opportunities to reassess and "recalibrate" the business-as-usual approach to the supply chain is one of the biggest ways to waste this downturn.

In two recent reports from Manufacturing Insights, a number of anticipated 2009 developments stand out as a starting-point for reevaluating current processes and operations. Among the analyst firm's worldwide manufacturing and supply chain predictions for 2009:

1. Modern supply chain organizations will scrutinize expenditure budgets even more, and new investments will focus on cost savings, requiring shorter payback periods. Expenditures will be made through the lens of cost/value.
2. Economic uncertainty, particularly for smaller suppliers in emerging economies, will lead manufacturer "brand owners" to consider strategic investments at critical supply points and financial support for key suppliers.
3. "To serve the value imperative, manufacturing companies will revisit past product investments and look to reuse existing designs, technology and knowledge," Parker writes.
4. Due to the high year-end inventory levels in 2008, manufacturers will consider re-balancing supply and demand with a focus on strategic network optimization and multi-echelon inventory optimization tools and, where industry-relevant, price and trade promotion management.
5. Companies will realize that, given the challenging economic environment, effectively managing manufacturing assets can be a significant competitive weapon. Manufacturers will put a renewed premium on production knowledge, the overall effect being higher utilization of manufacturing assets worldwide, greater flexibility in responding to demand and notable new challenges in managing the execution.
6. Investments in digital manufacturing (preparation), modern execution platforms, product performance and manufacturing intelligence will come together to begin supporting the factory network of the future. The need for tighter integration, data standards and better intelligence will become apparent. The application set begins with digital manufacturing, tightly linked to engineering tools.
7. Increasingly complex global supply networks combined with mounting economic pressures make risk management a more significant capability and a key differentiator for the supply chain.
8. No longer about PR or even regulatory compliance mandates, sustainability will discover metrics. Emerging standard measures and a desire to benchmark will affect sustainability initiatives significantly.

"While there is no shortage of bad news and indicators, the large manufacturing firms we speak with realize that with a downturn comes an inevitable recovery," Simon Ellis of Manufacturing Insights writes in the analyst firm's newsletter Theory & Practice. "It is practically certain that there will be more pain before we see evidence of a recovery."

"History shows that companies who stayed the course in improving important core capabilities enjoyed higher success when the good times came back," Ellis writes.

For Manufacturing Insights' complete lists of anticipated developments, see Worldwide Manufacturing 2009 Top 10 Predictions (via IndustryWeek) and Worldwide Supply Chain 2009 Top 10 Predictions (via Theory & Practice).

Related/Recent: Top Supply Chain Challenges for 2009

Resources

Worldwide Supply Chain 2009 Top 10 Predictions
by Simon Ellis, Kimberly Knickle, Christopher Holmes and Pierfrancesco Manenti
Manufacturing Insights, December 2008

Worldwide Manufacturing 2009 Top 10 Predictions
by Bob Parker, Joe Barkai, Simon Ellis, Benjamin Friedman and Kimberly Knickle
Manufacturing Insights, December 2008

Manufacturing Insights Top 10 Global Supply Chain Predictions for 2009
by Simon Ellis
Theory & Practice, Jan. 26, 2009

Manufacturing Outlook for 2009
by Bob Parker
IndustryWeek, Feb. 3, 2009