Why 1 in 3 Mid-Level Manufacturing Companies Are Missing Their Mark.

What’s Going Wrong, and What You Can Do About It

If you manage a mid-level manufacturing company, you know the pressure of meeting yearly goals. But between 2019 and 2023, 30% to 40% of these companies fell short of their objectives. The reasons? A blend of supply chain headaches, labor shortages, rising costs, regulatory pressures, and digital transformation difficulties.

Let’s break it down.

1. Supply Chains on Shaky Ground

When the foundation crumbles, the whole house shakes.
The pandemic exposed the fragility of global supply chains, and manufacturers are still feeling the aftershocks. With geopolitical tensions and unpredictable trade policies thrown into the mix, critical components have been delayed or, worse, unavailable. Every missed delivery and shortage in materials directly affects production lines and, ultimately, your bottom line.

2. The Talent Squeeze

Where have all the workers gone?
It’s no secret that finding skilled labor has become a monumental challenge. The workforce is aging, younger talent is scarce, and turnover is higher than ever. Even when companies do manage to fill positions, they often can’t find people with the technical expertise needed for today’s increasingly sophisticated manufacturing technologies.

3. Cost Pressures Rising

Inflation doesn’t just hit consumers — your business feels it too.
Raw materials, energy, transportation — you name it. Prices have surged, putting manufacturers in a bind. When everything costs more, maintaining profit margins while meeting production targets becomes a game of juggling priorities. Every unexpected price hike makes it harder to hit financial and operational goals.

4. Drowning in Regulations

Compliance is killing your efficiency.
Environmental, social, and governance (ESG) regulations are getting more complex every year. While they’re critical for the future of the planet, the added compliance costs and operational changes needed to meet these standards are eating into your resources. Every hour spent on compliance is one less hour spent on core business.

5. Digital Transformation: The Double-Edged Sword

The promise of Industry 4.0 is real, but the road is rocky.
If you haven’t faced the challenges of digital transformation (DX), you’re probably behind the curve. But even those who’ve jumped in are discovering how difficult it is to integrate new tech into old systems. The promise of automation, AI, and smart factories is tempting, but making these tools work in real-world manufacturing settings is proving to be a daunting task.

A Closer Look at Digital Transformation:
Opportunities and Pain Points

In today’s manufacturing world, digital transformation is no longer optional—it’s essential. But for many mid-level companies, implementing these advanced systems has turned into an uphill battle. Why? Let’s look at a few real-world examples and the specific challenges for 2024.

Real-World Struggles: Even the Big Guys Are Feeling It

• General Motors: You’d think with all their resources, GM would have digital transformation down. But their attempts to fully integrate smart technologies across multiple facilities have been slowed by the complexity of coordinating new systems with old, legacy equipment.
• Boeing: The aerospace giant has also hit roadblocks. Their digital twin implementation, meant to streamline production, ended up needing far more retraining and retooling than expected, delaying the project and driving up costs.

If these industry leaders are struggling, it’s no wonder mid-level manufacturers are facing similar issues because more often than less they depend on the big guys success.

Strategies That Succeed:
What the Successful 60-70% Get Right.

If 30-40% of mid-level manufacturers struggle to meet their yearly goals, what are the other 60-70% doing differently? These companies have found a way to navigate the complex challenges that derail others, and their strategies offer valuable lessons for staying on target.

1. Mastering Supply Chain Resilience

Adaptability is key!
Successful companies have learned to pivot quickly. When supply chains were disrupted, they diversified their suppliers, investing in relationships with multiple vendors across regions. Instead of relying on a single source, they built a buffer to absorb shocks. Some even localized portions of their supply chain to reduce exposure to global disruptions​​

Additionally, they’ve integrated digital tools like supply chain visibility software to predict potential bottlenecks, enabling them to act before problems escalate.

2. Retaining and Attracting Skilled Labor

People-power matters.
Smart manufacturers know that talent is the backbone of their operations. Companies in the 60-70% pool have invested heavily in upskilling their workforce. By offering ongoing training and development opportunities—especially in the use of emerging technologies—they create a workforce capable of adapting to the changing landscape​

These companies also cultivate a workplace culture that prioritizes employee well-being and retention, making them attractive employers even in a tight labor market.

3. Controlling Costs Through Efficiency

They run lean, but smart.
While rising costs are a universal challenge, successful manufacturers mitigate this through operational efficiency. Lean manufacturing principles help them cut waste and optimize every part of the production process. The implementation of automation and predictive maintenance ensures that machines run efficiently, reducing downtime and improving overall output​

These companies also have a strong focus on cost control, monitoring raw material prices and adjusting procurement strategies in response to market changes.

4. Staying Ahead of Regulations

Proactive, not reactive.
Instead of scrambling to meet new regulations, successful companies are proactive about compliance, especially regarding ESG (Environmental, Social, and Governance) standards. They view regulatory changes as an opportunity for innovation rather than a burden. By integrating sustainability into their business model, these manufacturers often find ways to reduce costs, improve efficiency, and win over environmentally conscious customers​

5. Embracing Digital Transformation

They make tech work for them.
Unlike companies that struggle with digital integration, successful manufacturers take a phased approach to digital transformation. They don’t try to overhaul everything at once. Instead, they start with areas where digital tools can deliver quick wins—like automating repetitive tasks or using data analytics to optimize production​

They also foster a culture of innovation, ensuring that employees are part of the journey. By training their workforce on new tools and technologies, they prevent resistance to change and ensure a smoother transition.

The Formula for Success: A Summary

The companies that thrive in today’s manufacturing landscape don’t just rely on luck—they follow a formula based on agility, investment in people, operational excellence, proactive compliance, and thoughtful digitization. By tackling challenges head-on with strategic foresight, they achieve the goals that others miss.

In short, they focus on resilience, adaptability, and a growth mindset—the three pillars of success in today’s volatile manufacturing environment.