2022 STATE

OF MANU-
FACTURING
REPORT 7TH ANNUAL
INTRODUCTION
The world is forever changed.
The past two years have been exceptional in
many ways, but workplaces and businesses
have adapted and moved forward. The rise of
remote work isn’t receding, and the need to
invest in more resilient supply chains is greater
than ever. And even as constraints have
loosened, leaders know that other supply
chain disruptions will arise in the future.
Despite the challenges, there’s a world of
opportunity.
To get ahead and stay ahead, companies are
fortifying the foundations of their businesses.
They’re focusing on fundamentals like
improving transparency of production and
procurement and being more responsive
to customer wants and needs. Leaders are
bullish on outsourcing, but they know that the
supply chain doesn’t stop at their company’s
front door. They’re looking for ways to
improve operational efficiency, collaboration,
and productivity while mitigating information
security risks — and they’re leveraging the
power of technology to do it.
This State of Manufacturing Report seeks to
illustrate these trends and provide insights
that will help your business thrive in the
world of today and tomorrow.
2022 State of Manufacturing Report | 2
EXECUTIVE SUMMARY
01
Supply chain visibility
and increasing
customer satisfaction
top the list of priorities,
indicating that
companies are using
recent disruptions
as an opportunity to
address fundamentals.
59% and 45% of respondents
are prioritizing
improved visibility and
customer experience,
respectively > Pg. 6
94% of companies are using
or implementing supply
chain analytics and
visualization > Pg. 7
02
Control and
predictability are
key to address rising
customer demands,
leading to the need for
tighter integration with
fewer suppliers.
88% of companies want to
reduce their number of
suppliers > Pg. 14
53% of companies prioritize
“better coordination
with suppliers” to
respond to customer
demand > Pg. 14
03 04
Productivity is a hot Information security
topic to better integrate has surfaced as a
remote workforces risk, as the adoption
and improve of new digital
collaboration between manufacturing
engineering and supply solutions increase.
chain teams.
72% of leaders report
90% are using or
engineers spending implementing digital
10% -or more- of manufacturing
their time on part technologies > Pg. 7
procurement > Pg. 22
97% of leaders are
75% of companies see concerned about
room for improvement digital security > Pg. 8
in the way engineering
and supply chain teams
collaborate > Pg. 23
2022 State of Manufacturing Report | 3
CHAPTER 01

Manufacturing,
Evolved

After navigating a multitude of supply chain disruptions over the last couple of
years, it comes as no surprise that the top priority of businesses in 2022 is improving
manufacturing and supply chain visibility. Knowing there’s a problem is the critical
first step in solving it, right? And there are a host of technologies aimed at increasing
that transparency.

2022 State of Manufacturing Report | 4

CHAPTER 01 INSIGHT #1

The barriers are lessening

Year-over-year, manufacturing leaders are facing fewer barriers to innovation than in 2021,
but sourcing fast, high quality options for low volume builds continues to be a challenge —
one that on-demand manufacturing platforms are built to solve. “If these barriers
were removed, we
What barriers does your organization face with new product innovation? could accelerate
2022 2021
new product
Difficulty sourcing fast, high quality options 47%
43%
to manufacture low-volume builds
development and
Rigid internal supply chain processes
that hamper ability to innovate
44%
45% deployment time
Slow feedback loop with manufacturing 42%
by 20-30%.”
partners that extends production time 52%
VP of Operations
Limited manufacturing feasibility and
Enterprise Company
38%
DFM expertise in development 42%

Friction created by poor cross- 32%

functional visibility on projects 34%

2022 State of Manufacturing Report | 5

CHAPTER 01 INSIGHT #2

Focusing on fundamentals
The top business priorities for 2022 show that leaders don’t
want to be caught off guard by disruptions or distracted
Which of these are your company’s most
from the needs of those who buy their products. So, they’re important business priorities for 2022?
focused on strengthening two of the bedrock elements in
every product business: Supply chain visibility and taking care
of their customers.
59%
Improving manufacturing
and supply chain visibility

45%
lmproving customer
experience and satisfaction

2022 State of Manufacturing Report | 6

CHAPTER 01 INSIGHT #3

New technologies
are pushing the
industry forward Which of the following digital manufacturing technologies
has your company adopted?
While digital manufacturing
technology adoption in general Using today Implementing Not considering
is high, some solutions are
more practical and others more Supply chain analytics and visualization platforms 61% 33% 6%
experimental. Supply chain analytics
and on-demand manufacturing On-demand manufacturing platforms 58% 34% 8%

platforms top the list of solutions

Industrial Internet of Things (IoT) 55% 36% 9%
most used today.
Intelligent asset management 55% 39% 6%

Product lifecycle management (PLM) 50% 42% 8%

Advanced industrial robotics 42% 46% 12%

Over 90% Virtual or augmented reality experiences 36% 50% 14%

are using or implementing Digital twin 30% 51% 19%

digital manufacturing tech

2022 State of Manufacturing Report | 7

CHAPTER 01 INSIGHT #4

With great technological power

comes great security responsibility
As the adoption of digital technologies empowers employees and increases information flow
throughout an organization, it also raises security concerns. Design intellectual property (IP) is a
company’s most valuable asset, and threat of cyber attacks continues to increase — so companies
are investing in better information technology (IT) and cyber security, and are choosing to work
with suppliers who prioritize security, too.

97% 88%
of leaders are concerned prioritize working with SOC 2
about digital security certified suppliers

2022 State of Manufacturing Report | 8

CHAPTER 02

Streamlining
the Supply Chain

In the modern world, it’s rare to find a company of size that does all of its
production in-house, and the economic benefits of outsourcing are well
established. Almost half of respondents have increased outsourcing as a result of
the pandemic, despite acknowledging that outsourcing poses risks, particularly
when it comes to security and visibility. So, companies are seeking to both diversify
their supplier base through onshoring, and reduce their overall number of suppliers
to streamline their procurement operations.

2022 State of Manufacturing Report | 10

CHAPTER 02 INSIGHT #1

Outsourcing delivers efficiency and quality benefits

Almost ¾ of respondents view outsourcing in an overall positive light, citing efficiency,
quality, pricing and speed as key advantages. Outsourcing is most likely to be seen in a
positive light by the Automotive, Robotics and Consumer electronics industries.

What do you see as the main advantages of outsourced What long term
manufacturing that contribute to your company’s impacts has the 48% We have increased outsourcing
our manufacturing
perception of outsourced manufacturing? pandemic had on
your company?
Efficiency 65%

Quality 57%

Competitive pricing 56% What’s your company’s attitude towards

outsourced manufacturing?
Speed 54%
Positive Negative Neutral
Technical expertise 44%
Automotive 81% 19%
Reduced capital expenditure 35%
Robotics 74% 3% 23%
Security 34%
Consumer
76% 5% 19%
Visibility 32% electronics

2022 State of Manufacturing Report | 11

CHAPTER 02 INSIGHT #2

Not all outsourcing

is created equal
For outsourced manufacturing What do you see as the main detractors or risks of
providers, it’s clear that quality, outsourced manufacturing that contribute to your
company’s perception of outsourced manufacturing?
security and visibility are viewed
as major pain points by some
companies. These challenges Lack of quality 42%

represent huge areas of opportunity

Concerned about security 41%
for technology solutions, such as
digital manufacturing platforms, to
Insufficient visibility 36%
drive workflow improvements and
mitigate outsourcing risks. Increased overhead 34%

Pricing is not competitive 31%

Decreased efficiency 28%

No confidence in
20%
technical expertise

Too slow 18%

2022 State of Manufacturing Report | 12

CHAPTER 02
Onshoring and diversification on the rise
The uncertainty surrounding overseas logistics continue to
be a concern for companies. That’s why 65% of companies
plan to increase US manufacturing this year — and that’s
especially true for larger companies, where almost 3/4 of the
respondents are prioritizing domestic production.
INSIGHT #3
And while onshoring is one method companies are using
to improve supply chain resilience, diversifying their
supplier base is another. Over half of the respondents are
seeking increased diversity in their global manufacturing
operations this year, showing that onshoring is just one
piece of the puzzle for greater resilience.
2022 State of Manufacturing Report | 13
CHAPTER 02 INSIGHT #4

Simpler supply chains, please

Is your company working to reduce (i.e. rationalize)
88% of companies want to reduce their the number of tier 2 and 3 suppliers in your
approved vendor list for part procurement?
number of suppliers.

At the same time, the majority of leaders are working toward

better coordination with suppliers. This indicates that companies
are looking for tighter integration with fewer suppliers in order
to gain control and predictability over their supply chain. 12%
88%
Also of note: 22% of leaders want to reduce their supply of companies
base but haven’t started the work yet. It may seem an 22% want to reduce
their number
overwhelming task, but on-demand manufacturing platforms
66% of suppliers
make it easier by aggregating global manufacturing capacity
into one central place.

How are product development

workflows evolving?
Yes

53% Better coordination

with suppliers
No, but we should

No, we have the right number of suppliers

2022 State of Manufacturing Report | 14

CLIENT QUOTE OR INDUSTRIES LANDING PAGE CONTENT.
CHAPTER 03

Keeping Up with
Customer Demands

Customer expectations are higher than ever, and that trend isn’t going to
change anytime soon. Companies know they need to rise to the challenge, or risk
falling behind their competition. That’s why why the second most important priority
for respondents in 2022 is improving customer satisfaction — which is driving
companies to reconsider how they create new products to better serve
their customers.

2022 State of Manufacturing Report | 16

CHAPTER 03 INSIGHT #1

Shifting sands of customer demand

To effectively serve your customers, you
must know what they want. And what
customers want is changing.
97% of respondents say that customer
demands are shifting.
Companies now view product sustainability
as the biggest trend, followed by demand
for higher quality products, advanced
features and functionality, and the pace of
new product introductions.

What trends are you seeing in customer demand?

63% 59%
Product sustainability is Increased requests for advanced
97% increasingly important features and functionality

say customer
demands are
shifting 61% 56%
Demand for higher They want new
quality products products faster

2022 State of Manufacturing Report | 17

CHAPTER 03 INSIGHT #2

New products and new ways of creating them

In response to these shifts in How are changes in customer
customer demands, businesses demand causing product
development workflows to evolve?
are adjusting how they work.
New product development (NPD)
workflows are evolving, but in 49%
different ways depending upon the Increased
development
size of the company.
53% agility

Big firms are focused on better Better coordination 47%

with suppliers
coordinating with their suppliers Faster integration
of customer
externally, and improving feedback
coordination across their
engineering, manufacturing and
supply chain teams so they can 39%
integrate customer feedback 48% Shorter
more quickly. development
More efficient
cycle times
coordination
across engineering, 1% Other
Smaller organizations are prioritizing manufacturing and
shorter development cycles, and supply chain teams 4% Customer demands
are not impacting our
increasing developmental agility. development workflows

2022 State of Manufacturing Report | 18

CHAPTER 04

Optimizing
operations to
maximize innovation
You may not control exactly which innovation will lead to breakthrough success,
but you can create an environment that fosters innovation and facilitates new
product ideas.

Freeing capacity for innovation is part of the answer, by improving collaboration

between engineering and supply chain teams. The other key element is tools that
enable them to do more with less.

2022 State of Manufacturing Report | 20

CHAPTER 04 INSIGHT #1

Investment in
operational efficiency
is investment in Is your company evaluating technology solutions to increase
innovation company-wide operational efficiency for new product development?

Manufacturing leaders recognize that

workforce productivity is essential to 1%
unlock capacity for innovation. No, we don’t
have a need

6%
No, we already
have a good
solution in place
82%
93% 11%
Yes
No, but we
of companies are looking should
to technology solutions
to increase operational
efficiency for new product
development

2022 State of Manufacturing Report | 21

CHAPTER 04 INSIGHT #2

Increasing
engineering capacity
for innovation
Engineers today are spending
significant time managing suppliers.
72% of leaders report engineers are
spending 10% — or more — of their
time on part procurement.
This, in a year that the US
Department of Labor released a
How much time would you estimate a typical engineer spends on vendor
sourcing management, quote, and order activities on weekly basis?
(activities include: sourcing, vetting, and onboarding new vendors; requesting
quotes and DFM; following up on orders; managing quality)
Less than 2 hours 2-4 hours 4-6 hours 6-8 hours More than 8 hours
23% 72%
of leaders report engineers are
spending 10% — or more —
of their time on part procurement

report showing the largest decline

6%
in worker productivity in 75 years 45%
during Q1. 8%
It begs the question: How much
faster could engineers innovate and
19%
develop new products if they got
that time back?

2022 State of Manufacturing Report | 22

CHAPTER 04 INSIGHT #3

Bridging the gap

between engineering
and supply chain
And the connection (or lack thereof)
between engineering and supply
chain teams is a related issue:
almost ¾ of those polled see
room for improvement in the way
engineering and supply chain teams
collaborate.

75%
see room for improvement in
the way engineering and supply
chain teams collaborate

2022 State of Manufacturing Report | 23

CHAPTER 04 INSIGHT #4

The remote workforce

is here to stay
Half of respondents report that they
have more remote employees as a
result of COVID-19, which is a slight What long-term impact has the pandemic had on your company?

drop-off from past years, but it’s

clear that the hybrid workplace isn’t
going anywhere.
57% 56%
Many of the lessons learned from 50%
the past two years have revolved More employees
around ensuring the flow of work remotely
information digitally throughout
organizations. The ongoing
presence of distributed teams make
the technologies that connect them
a critical component of strategies
to meet business goals in 2022
and beyond.
2022 2021 2020

2022 State of Manufacturing Report | 24

KEY TAKEAWAY

Whether among distributed

Digital is internal teams or with outside

vendors, improved productivity,
operational efficiency, visibility,

the shared and collaboration are key to

innovating and meeting rising
customer expectations.

platform Companies are actively seeking to

eliminate barriers to innovation,

for future streamline their supply chains, and

despite concerns about security,
they’re increasingly leveraging the

growth. power of outsourcing. And digital

manufacturing technologies are a
critical component underpinning
these changes — they’re the
connective tissue between the
elements of successful modern
manufacturing businesses
moving forward.

2022 State of Manufacturing Report | 25

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Dimensional Research® provides practical market research for technology and manufacturing companies. We partner with our clients to deliver actionable
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2022 State of Manufacturing Report | 26

SURVEY METHODOLOGY AND PARTICIPANT DEMOGRAPHICS

Individuals Represented

Independent sources of manufacturing

professionals were invited to participate Job Level Role
in an online survey where a variety of
questions were asked on topics related
to manufacturing industry trends. The 54% 29% 18% 13%
Directors C-level Business Supply chain
survey was fielded between April 26 – executive leadership
May 3, 2022.

A total of 234 qualified individuals

participated in the survey. All were senior 20%
decision makers who work in supply Engineering

chain, engineering, R&D, technology or 17% 45% 3%

business leadership roles at companies VP-level Technology R&D
executive innovation
that produce medical devices, robotics,
automotive, aerospace or consumer
electronics products.

2022 State of Manufacturing Report | 27

See you next year!