How do manufacturers and distributors feel about their business prospects in the next six months?
That’s just one of the findings from Sikich’s “Industry Pulse: Manufacturing and Distribution” (see this month’s Medical Infographic) survey of more than 120 executives from manufacturing and distribution companies across a range of sectors. Sikich, the global technology, accounting, tax, audit, and business service advisory firm, conducts these surveys multiple times throughout the year to create industry benchmarks.
In the most recent survey, respondents were asked to rank their level of confidence on a scale of 1 to 10 – with 1 being not optimistic at all and 10 extremely optimistic – 72% of respondents chose 7 or higher. And, while responses also showed more than half are looking to expand their workforce in the next six months (56%), only 5% are “completely confident” in their ability to obtain the talent required.
“Even with optimism, there is still work to be done,” says Jerry Murphy, partner-in-charge of Sikich’s manufacturing and distribution team.
Murphy is right. The lack of confidence in finding skilled talent is a major concern facing the industry. In my April editorial, I referenced a survey from the Manufacturing Institute’s Center for Manufacturing Research, together with national CPA and advisory firm BKD, which saw more than 77% of small- and medium-sized firms surveyed expect to continue to struggle in finding talent for various positions. (https://tinyurl.com/wr2v6fk).
Yet, another area is garnering more concern: cybersecurity. According to the Sikich survey, these breaches are on the rise with more than 50% of manufacturers and distributors having experienced at least two information security events in the past 12 months with the most common incidents being email phishing scams (81%), unemployment fraud (42%), and ransomware (9%).
The Harvard Business Review (https://tinyurl.com/54m2rdkj) reported that 2020 saw ransom attacks up 150% from 2019 and amounts paid last year increased more than 300%. In addition, the article says there’s been a dramatic increase in ransomware activity in just the first half of 2021. And, cyberattack concerns go beyond impacting a company’s operations, as noted in the June 2021 issue regarding managing software risk in medical devices (https://tinyurl.com/tdxckmx2) – think of all the connected devices implanted and worn on bodies.
Add to this, 28% of survey respondents are only slightly or somewhat confident in using their existing data to make business decisions; that means 72% are not confident. Data is king and if confidence and security isn’t there, and that needs to be addressed.
However, even with all these concerns, industry remains optimistic. After working through 18 months of a global pandemic, manufacturing is showing its strength and resilience with positive outlooks for demand, but there’s still a lot to face.
Safe, secure data is what companies need to operate – from the shop floor to the medical devices connected to people, hospitals, and smart devices (https://tinyurl.com/fpyjhrb4).
As Murphy sums it up, “The competition for talent is at an all-time high, and lack of data confidence coupled with data security vulnerabilities persists across industry. Manufacturers of all sizes must look to proactively address these issues to keep up with consumer demand.”
What are your plans for retaining talent and cybersecurity?