11 JUNE 2022 WorldWide Drilling Resource® Equipment Manufacturing Trends to Watch Adapted from Information by the Association of Equipment Manufacturers (AEM) The immediate and long-term future of the equipment manufacturing industry will be defined by a number of prominent trends, each of which are poised to have a significant impact in 2022 and beyond. Equipment manufacturers can benefit from developing a keen understanding of these trends, and how they will evolve over time. Here are three key trends poised to impact equipment manufacturers: Workforce challenges and solutions - When it comes to the workforce, 2021 proved doing what has always been done will no longer provide the same results. If anything, the pandemic acted as an accelerator taking labor force trends already sneaking up on the industry and exploding them into a new reality. The most significant trends include the shift from a baby boomer pre-pandemic drift toward retirement, to a pandemic mass exodus of retirement. Second, a labor force participation rate which had been declining since 1980, dropped to record lows with over two million women leaving the workforce, fewer millennials seeking careers of their own, working age males increasingly preferring parttime over full-time work, and an opioid epidemic siphoning off prime-age men by the hundreds of thousands per year. Finally, according to census data, another important consideration is the U.S. birthrate which has been steadily declining, hitting a 35-year low in 2019. With fewer and fewer people available, the labor market will continue to tighten. The same decline in birth rate is also happening in countries typically relied on for sources of immigrant labor. Keeping an open mind about human resources (HR) is one possible solution. The competition for talent is being won by HR departments whose motto has become, “What else can we do?” This sense of curiosity includes evaluating and offering competitive compensation, meaningful benefits, potential career development opportunities, and most of all, flexible work. The employee experience needs to be reconsidered, much like the customer experience has been analyzed in the past. Supply chain management - Managing supply chains, communicating chemical requirements, educating suppliers, and managing data will be the best ways to meet coming challenges. Given the size and complexity of the global off-road, heavy-duty equipment manufacturing industry, meeting these challenges will be an enormous task. To achieve these goals, industry stakeholders will need to work together to establish new industry best practices and efficient lines of communication to ensure information can effectively travel from one end of the supply chain to the original equipment manufacturer. The industry has not yet found all the answers, but this will be an important issue for 2022 and beyond. Employee safety - The pandemic continues to have a significant impact on the industry. While health and safety protocols and best practices have been developed to combat the virus, it has done what viruses do best - change and evolve. Fortunately, the equipment manufacturing industry continues to change and evolve along with it, adapting to new guidelines, regulations, and local mandates to keep business owners and their employees safe. If the last two years have taught us anything, it’s that our industry remains strong and resilient, even in times of tremendous uncertainty. The pandemic has affected the way business is done, the economic outlook, supply chains, and maybe most importantly, the workforce. All this change is expected to come to an end eventually; but until that happens, adaptations will need to continue to keep those working in the equipment manufacturing industry safe. WWWWDDRR photo. C&G June 15, 2022
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