MCADCafe Industry Predictions for 2023 – ProShop

By Paul Van Metre, Co-Founder, ProShop ERP

Paul Van Metre

I predict that 2023 in the machining/manufacturing sector will be record-breaking for some and very difficult for others. A year where some companies are drowning in opportunities, and others are scraping the barrel to find any work to keep their equipment busy. There are several variables that feed into my prediction.

1. The gap between sales-driven companies vs. those that are not will be highlighted as the economy softens because of increased interest rates and competition. I’ve already started seeing this in the past several months, where many shops I know are slammed with record-setting volumes of work, and others are scraping to get by. The busy shops have decided to be sales and marketing driven. They are proactively investing in their future sales opportunities. Many shops will go out of business in 2023 if they don’t become sales-driven organizations.

2. Cybersecurity will become a make-or-break topic for many shops. CMMC is coming in 2023 for companies in the government and defense supply chain. Even before the requirements are written into contracts and RFQs, OEMs are already starting to filter out companies, not in compliance with or aggressively pursuing the regulations for NIST 800-171 and CMMC. Companies can’t keep their head in the sand any longer.

3. Certifications such as AS9100 or ISO 13485 will become even more critical than they have been in the past. Not only do they open significant doors with high-end clients in the aerospace, defense, and medical industries, but it’s the smarter way to run your business regardless of the sales opportunities. Having repeatable, scalable business processes with a focus on risk management and continuous improvement is the most profitable way to run a growing business, period. The key for shops will be to adopt certifications without adding burdensome manual processes that drive up costs and reduce speed. Shops that continue to shun those certifications will find themselves fighting for low-margin work with clients who can easily offshore their parts. Their businesses also won’t run as efficiently due to ignoring risk and continuous improvement.

4. The Space Industry is growing exponentially and presents significant long-term opportunities for companies positioned to serve that market. The business isn’t easy, but it is lucrative. The parts are complex, with high tolerance, some difficult materials, short lead times, and high regulatory requirements. Companies that can rise to the challenge can often charge premium prices and cement themselves as key parts of the supply chain for this industry, which will continue to grow rapidly for years to come. Be aware that AS9100, CMMC, and possibly other certifications will be required, which means that the company will need to factor these costs into its business model but will be in relatively small company with other firms who are up to the challenge. In summary, 2023 will be a year of haves and have-nots, and the supply chain will further segment into shops that want to play at the highest levels of the supply chain and those that do not. Savvy shops can do well in both areas, but only if they are sales-driven, tech-savvy, and willing to be proactive to market demands. Many shops with less commitment to business excellence will decide the landscape is too competitive and close their doors.

Category: Industry Predictions

This entry was posted on Saturday, January 14th, 2023 at 2:00 am. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.