Overview of the Manufacturing industry

Since the First Industrial Revolution, beginning in 1760, we’ve experienced Steam, Science, and Digital Revolutions. Sophisticated technology now pushes us into the Fourth Industrial Revolution, powering innovation and productivity in ways we’ve never imagined. Where we used to see human-powered manufacturing floors, we now rely on a tech-savvy workforce to operate intelligent robots.

Whether it’s artificial intelligence, real-time sensors, or 5G speeds supporting uninterrupted connectivity, manufacturing companies are progressing rapidly. As in the first three revolutions, we’re writing a new industry chapter that presents both opportunity and risk for those in the space.

Some of the biggest risks Manufacturing companies face

Every manufacturer has unique risks, of course, but some themes surface in this space continually. Here are a few significant risks that manufacturing companies face:

Mergers and Acquisitions

The first three quarters of 2019 delivered 13 deals that were each over $500M. It’s safe to say that manufacturing companies are getting their houses in order to strengthen their core portfolios. With so much pressure to increase capabilities from shareholders, customers, and the global financial market, who can blame them?

That said, mergers and acquisitions (M&As) have been through the roof — but so has the deal value. Additionally, partnerships and joint ventures are becoming more commonplace, too. With so much in transition at stake, manufacturing companies are left exposed to multiple vulnerabilities.

Supply Chain Ecosystem

Manufacturing companies diligently attempt to streamline production, but progress doesn’t happen in a vacuum. All the M&As reflect this particular concept. Nevertheless, a vital part of any manufacturing company’s success is its supply chain. Fostering a healthy supply chain ecosystem in such a wishy-washy trade market has proven tough.

Manufacturing companies often target their business goals and look for expansion opportunities in their supply chain. This strategy calls for an “all hands on deck” approach, which means diversifying a supply chain for momentum. Those who opted for this route grew up to five times more than companies who didn’t. However, safeguarding these partnerships concerns many manufacturers.

Corporate Social Responsibility

Renewable energy sources are a hot topic in the modern world. According to Deloitte, over 25% of manufacturers are known as “Social Supers” — manufacturing companies with a genuine commitment to improving the world.

As imagined, the dedication to green energy wins these companies some clout in today’s society. And this is no longer an elite group. Over 64% of manufacturing companies planned to use more renewable energy over the next five years.

Safety

Although many companies “employ” robots, a human workforce still operates these intelligent machines. The interaction between robots and humans makes safety a top concern for manufacturing companies.

Experienced workers are retiring from the workforce in droves, leaving inexperienced workers at the helm. According to OSHA, plenty of overtime, insufficient training, and fatigue all contribute to the 100 injuries per week and 14 deaths per day. Keeping the lifeforce healthy in this industry means protecting the employees who power it.

Digital “Muscle Building”

Many manufacturing companies have experienced digital success in leaps and bounds. Naturally, streamlining this progress is a no-brainer, especially when it comes to increasing flexibility in supply chain management. However, labor and trade unpredictability is creating a slow-down in momentum.

As a result, many companies are shifting their focus to managing risk better by building agility and scalability with their new digital muscles. With so much depending on digital innovation and advances, cybersecurity remains a top priority for manufacturing companies. Few organizations can handle a $4M setback, which is the average amount of a data breach nowadays.

Why is insurance for Manufacturing companies important?

All manufacturing companies face the fundamental risks of operating a business, such as financial, reputational, and compliance risks. So staying in the game for the long run requires strategy. Aside from the basics, however, manufacturing companies also face unique challenges regarding their specialization.

Since we’re in the Fourth Industrial Revolution, manufacturers rely on digital technology more than ever before. What this means is these companies face cyber vulnerabilities never before experienced. For companies who want to bypass lawsuits, business interruption, and robot-related mistakes, staying connected and protected is a must.

Lastly, manufacturing companies strive to keep up with the rapid pace of progression in today’s world. With digital reformation leading the way, it can be tough to maintain the lead or even keep up with the pack. Only with a robust risk management plan can manufacturers compete with the demands of a tech-hungry society.

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What insurance do Manufacturing companies need?

How much does Insurance for Manufacturing Companies cost?

The cost of insurance for manufacturing companies will depend on several things, including the company’s size and development stage. Other factors include:

  • Exposures: risks being insured
  • Company practices: views on safety, compliance, and risk management
  • Program structure: the amount of deductible and willingness for a company to assume more risk
  • Claims history: the type and amount of past claims against the company 

Types of Manufacturing Companies that need Insurance

The manufacturing industry covers an array of companies. From the latest baby doll to the trending novel to the heavy equipment fixing our roadways, products from these companies run the gamut. Here are some examples of manufacturing companies in the industry:

  • Transportation (i.e., automobiles, shipbuilding, aerospace)
  • Toys
  • Electronics
  • Paper products
  • Printing and publishing
  • Industrial equipment
  • Building materials
  • Furniture and fixtures
  • Textile production
  • Sporting goods
  • Household goods
  • Crafts
  • Pharmaceutical
  • Chemical

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