The manufacturing industry is in full transition. The sector is facing challenges such as high labour costs, rising energy prices, supply chain disruptions, falling demand due to economic uncertainty, a shortage of staff and skills, geopolitical tensions and the green transition and new legislation around sustainability. With the right strategic partners, technology can play a crucial role in tackling these obstacles. Fujitsu, experts in digital transformation, therefore presents four predictions that are essential for the manufacturing industry in 2025.
The Netherlands saw several casualties in the manufacturing industry. Think of the bankruptcy of wind turbine builder EAZ Wind and metal company Wil Waelbers Design. Yet this transition period also offers opportunities for manufacturing companies to be successful. Especially if they deal wisely with challenges such as digitalisation, sustainability and ESG legislation. Thanks to technology, organisations can overcome their biggest challenges.
Fujitsu, expert in digital transformation makes four predictions that are essential for the manufacturing industry in 2025.
Manufacturing companies need to change their mindset
When manufacturing companies implement sustainable processes today, they usually do so to save costs on energy and to comply with legislation. By 2025, companies should change their mindset and include sustainability in their key business objectives:
- From tactical to strategic thinking. Many manufacturing companies still focus too much on short-term profits when it comes to technologies such as AI. For example, a company that uses computer vision only to replace engineers and cut costs is missing out on benefits such as strategic quality improvement and fewer manufacturing errors. In the long run, this yields a better reputation and more market share.
- From focus on technology to focus on objectives. Manufacturing companies often get caught up in the promises of technologies such as AI without first defining business goals. Instead of asking how they can use technology, they should first define what their goals are, including sustainability.
- From thinking in silos to holistic integration. Manufacturing companies should no longer view digital transformation initiatives as isolated projects. Sustainability must be woven into the entire product lifecycle. This is only possible if companies break down silos between departments and encourage collaboration.
In 2025, manufacturing companies are going to benefit from AI technology no matter what. AI agents in particular offer a lot of potential to optimise the supply chain of manufacturing companies.
Tighter regulation is driving change worldwide
New legislations will impact the manufacturing industry. The Corporate Sustainability Reporting Directive (CSRD) expands significantly from 1 January. Thus, large companies outside the EU with a turnover of more than €150 million will also be covered by the directive. Provided they have at least one subsidiary or branch in the EU. The directive also affects small and medium-sized companies, taking into account their limited resources.
The EU Corporate Sustainability Due Diligence Directive (CSD), often called the Supply Chain Act, requires companies in the EU to know and monitor the human rights and environmental impact of their supply chain. By 2025, the EU Carbon Border Adjustment Mechanism (CBAM) will also be fully implemented. This policy introduces import tariffs based on CO2 emissions of products.
New legislation also increases US focus on ESG
Following the ESG legislation Europe is implementing, US manufacturing companies are also starting to pay more attention to it. Companies operating in the EU will have to meet the standards themselves. US-only players are also joining this trend. Perhaps EU legislation will soon also have a US counterpart, although of course that remains to be seen after Donald Trump's election victory. In any case, organisations would do well to be proactive about this. This will give them a competitive edge and, moreover, it provides opportunities to attract environmentally conscious customers, enter new markets and improve brand reputation.
European manufacturing companies optimise energy consumption
High energy costs are a major reason in Europe why manufacturing companies want to optimise their energy consumption. From material procurement and logistics to factory production and the end use of a product, companies want to know the impact on energy consumption and CO2 emissions throughout a product's life cycle.
By tackling energy waste, they can reduce their operational costs, meet CO2 emission reduction targets and improve their brand image in the market. By 2025, manufacturing companies will therefore invest in solutions that provide greater visibility into their energy consumption patterns. As a result, they will see more quickly where they can improve and implement more effective strategies.
Source and photo: Fujitsu Benelux
See also: Entrepreneurs in the engineering sector need to get to grips with AI
