Top Manufacturing Risks for 2023 – And Tips for Overcoming the Challenges

You’re not alone if you haven’t switched your business management systems to the cloud. Using a calculated strategy to secure your company’s assets and data is just smart business. However, although keeping servers with sensitive corporate data in-house may seem safer, your networks and internal systems may be hindering you and endangering your company. Perhaps it’s time to consider a Cloud ERP Upgrade.

In the manufacturing sector, dependability and consistency are essential elements. Any disruption could result in significantly lower production and make it harder for manufacturing companies to meet their goals.

Tips for Mitigating Manufacturing Risks in 2023

Even when interruptions happen suddenly, it is still possible to put plans in place to deal with potential problems to reduce the impact on manufacturing and logistical operations.

This article examines some significant threats facing the manufacturing industry in 2023 and perhaps beyond. It discusses your business’s daily dangers and demonstrates how Cloud ERP can help reduce those risks and open up new possibilities.

Global disruption of the supply chain 

To make their products, manufacturers need raw materials and other supplies. Their businesses could be inoperable if their supply chain is damaged, ceasing the production of specific commodities.

Many supply chains are now on high alert due to rising political tensions. The most significant impediment is Russia’s invasion of Ukraine. Due to the complicated political and economic climate, global access to some commodities might be restricted. Global leaders anticipate this will have long-lasting consequences on the supply chain that could endure until 2025 because there doesn’t appear to be any resolution.

Due to the closure of numerous Chinese industries due to the COVID-19 pandemic’s spread of illnesses, there were also significant shortages of raw materials and finished goods. Disease outbreaks can significantly limit the number of employees and cause delays in logistics.

Rethinking procurement strategies and Just-in-Time (JIT) inventories is one approach to address these supply chain interruptions. To ensure supply chain health, firms can negotiate various contracts and cooperate with multiple vendors if they have alternative options for obtaining raw materials and other products.

The JIT inventory method, on the other hand, emphasizes the significance of lean production to cut waste and precisely predict demand. As a result, new tactics have been developed, such as manufacturers creating their components rather than relying on third parties or converting to more dependable local manufacturers rather than relying on foreign suppliers.

Top dangers for manufacturers in 2023

Workforce Shortage is a Top Risk for Manufacturing Companies in 2023

Manufacturing employment has significantly decreased as a result of the COVID-19 pandemic. The sector was already having trouble finding new talent, but the pandemic worsened the situation by hastening the labor deficit. There are many causes for this, including:

  • Misconceptions about manufacturing sector work can discourage people from working in the sector.
  • Finding skilled and competent local workers is challenging due to the severe skill shortage.
  • Manufacturing companies can only rely on local talent because the compensation for qualified employees needs to be sufficiently appealing for them to relocate.
  • Due to the aging of the manufacturing workforce, gaps are difficult to fill.
  • Higher skill needs result from introducing new industrial technology, yet they aren’t fulfilled.

There are several ways that firms could deal with the labor shortfall. For instance, using community outreach to discover local talent willing to invest the time and energy necessary to learn more about manufacturing can ultimately increase the local talent pool.

Additionally, it is feasible to provide better training and reskilling programs for current employees and entice entry-level workers to join by outlining opportunities for them to advance their careers.

Finally, improved pay incentives can facilitate talent relocation, expand the local talent pool, and provide manufacturers with more options for hiring skilled laborers.


In the 12 months that ended in February 2021, the U.S. consumer price index increased by 7.9%. Since February 1982, this annual increase has been the sharpest, and it is unclear whether inflation will begin to decline. Manufacturers have been obliged to raise the price of their products to preserve their current margins due to these price spikes and rising input prices, but this can adversely affect distributors and consumers.

There are two main strategies for preventing inflation and the manufacturing disruption it causes. Consider first moving risk upstream. It is simpler to manage costs with more suppliers since prices can be more competitive. Alternately, transfer risk downstream using variable selling prices or fixed contract costs.


Last but not least, as modern manufacturing firms migrate their processes to digital substitutes, cybersecurity has become a significant issue. The security of network infrastructures and implementing risk management strategies are essential to reduce cybersecurity risks.

Another issue is the widespread usage of outdated computer systems by manufacturing companies. These systems can be incompatible with contemporary solutions and are often far more challenging to maintain. They might also lack security upgrades and have less robust security features, implying ongoing security flaws and risks.

These dangers could result in various problems, including the total failure of a manufacturer’s systems or a data leak that might result in hefty penalties. Firms must concentrate on their digital transitions to ensure that their systems are current with modern requirements.

All doom and gloom? Here’s the good news!

How 7 Major Business Risks Can Be Removed Using Cloud ERP

Your organization can eliminate these 7 Key Business Risks with the aid of cloud-based ERP business management systems:

  1. Simplify compliance with industry and governmental laws

The rules governing electronic data management continue to change in addition to the various layers of standards and regulations that your firm must follow. Small and medium-sized firms need help to keep up with government rules, industry standards, and corporate quality programs. To address these needs, you need professional assistance and technological solutions.

  1. Protect customer, employee, and company data

No company can afford to ignore security concerns that could ruin a carefully created reputation that has cost millions of dollars to develop. Few organizations have the internal capabilities to provide the level of security required to adequately protect business and corporate data in today’s risk-filled digital environment. If CRM and ERP systems are held hostage, a ransomware assault could theoretically result in the closure of a company.

  1. Provide clients with experiences that encourage repeat business

Your customers, whether consumers or business clients, want your company to keep up when disruptors move into your sector and capitalize on digital opportunities. If disjointed systems hamper your employees, they cannot provide wonderful customer experiences. Customers and staff will become irate and take advantage of what the disruptors have to offer as a result.

  1. Look for ways to increase revenue

If your finance team is constantly entering data into spreadsheets, they won’t have time to put that information to use. Your competitors are eschewing spreadsheets in favor of analytics, which converts digital information into revenue because data offers a strategic advantage.

  1. Enhance operations through data-driven decision-making

A single, comprehensive perspective of the firm is unachievable due to the many systems required to manage sales, finances, and operations. Your company has to connect systems so data may flow end-to-end to keep up with the digital world. If your company’s data is dispersed among disconnected systems or confined to spreadsheets, you are making judgments based on incomplete information.

  1. Encourage a mobile, modern workforce

Finding qualified staff will become more and more difficult if your company is still dependent on paper-based processes. When making a sale, working on a project, or monitoring shipments, today’s workforce wants simple business processes and information at their fingertips.

  1. Encourage a mobile, modern workforce

Finding qualified staff will become more and more difficult if your company is still dependent on paper-based processes. When making a sale, working on a project, or monitoring shipments, today’s workforce wants simple business processes and information at their fingertips.

  1. Reduce the likelihood of human error with automation

Mistakes will still occur regardless of how knowledgeable and cautious your staff is. When working outside of automated systems, your employees will make mistakes, whether they are putting data into spreadsheets, giving pricing quotations, or buying inventory. And those errors could cost your company clients, revenue, and goodwill.

Enterprise resource planning (ERP) in the cloud offers greater protection, functionality, and flexibility to safeguard your assets and support your company’s active participation in the global economy.

Ready to explore the benefits of an ERP upgrade? 

Our team of ERP consultants is available to assist you if you’re ready to learn more about the advantages of new ERP software. For a free consultation, please get in touch with us.

Strategic System Group (SSG) is a top ERP Integrated Solutions supplier that can meet your business needs. The company has experience developing specialized software solutions and handling information systems difficulties, from ERP Migration for Businesses to ERP Management Reporting. The company’s primary goal is to satisfy and surpass clients’ expectations by continuously raising their performance.

As an ERP Integrated Solutions Provider, SSG can help you accelerate and define your company’s future in the most ideal way possible.

About the Author 

Since 1991, SSG has been a leading enterprise resource planning (ERP) application and information systems consulting firm. It started as a group of partners who helped manufacturing and distribution companies improve the functionality of their ERP software systems through custom software development. Many older ERP software packages didn’t have enough features and reporting tools, so SSG had to make custom solutions to meet client business needs.

SSG still works with clients who use old ERP software, but it has also become an expert in ERP software packages that are the most advanced on the market. SSG is an expert at moving companies from older ERP programs to newer, more modern ERP systems.