The economic and logistic uncertainties engineering firms faced in 2022 will carry over into 2023. Continuing challenges include rising material costs, inflation, supply chain volatility, and skilled-labor shortages.
The need to respond quickly to customer demands is yet another challenge for manufacturers and equipment companies. The six factors below will continue to will impact production, profitability, and growth for engineering firms in 2023—those companies that can master them will differentiate themselves from the competition and gain market share and brand recognition.
1. Inflation
Interest rates are still high, increasing the price of engineering equipment and materials such as steel and aluminum. This pressures engineering firms and their manufacturing partners to contain costs and keep prices on finished products as low as possible. “With the trade talent shortage remaining tight and inflation continuing to surge, industry professionals will need to be diligent with their workforce to keep individuals motivated while also ensuring they are on the cutting edge of technology to keep both customers and employees satisfied,” reported PMEngineer.com.
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2. Supply chain disruptions
Engineering firms continue to be frustrated by the long-lasting impacts of COVID-19-related supply chain disruptions, which make it extremely difficult to accurately forecast project needs and lead times. Material availability and costs can vary dramatically over short periods of time, which negatively impact production schedules, customer satisfaction, and overall profitability. One of the largest market disruptions in 2023 could be related to the transition to A2L refrigerants from hydrofluorocarbons for cooling applications, possibly causing refrigerant shortages. Engineering firms are also looking at redundant procurement systems to create more reliability.
3. Having enough skilled engineers
With the upsurge in new business as COVID-19 fades, many engineering firms are busy trying to fill open engineer positions so they can finish projects on time and take on more projects. Many engineers quit during the Great Resignation to find different jobs, or permanently retired from the business. In manufacturing, for example, the acute shortage of experienced engineers is slowing down production and creating bidding wars for top talent. This makes it even more important for human resources and the C-Suite to attract and hire top talent. This typically involves generous salaries and benefits and providing the latest technologies and software, professional development opportunities, and in-house upskilling and training.
4. Sustainability
There is growing pressure on engineering firms to adopt sustainable practices, including best practices for the supply chain and internal operations. Customers are becoming more aware of sustainability and want manufacturers, developers, and engineering firms to reduce their carbon footprints. This in turn could lead to new approaches for projects, designs, and business models. Companies are creating dedicated sustainability positions to oversee compliance with environmental standards or regulations, especially those for carbon emissions and energy conservation. This often requires capital investment for energy infrastructure and more efficient production equipment.
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5. High customer expectations
Consumers learned how to shop on the internet during the COVID-19 pandemic and have become accustomed to the almost instantaneous speed of purchasing and delivery. This also carries over into the business world, where customers want fast results from their engineering partners and have little sympathy or patience for the complexities and delays related to the supply chain. Customers also want their architects and engineers to produce quality outcomes regardless of project complexity or tight deadlines. Engineering firms that pro-actively respond to these expectations will have better customer relationships and brand reputation.
Speed and quality are the two top priorities that customers expect from their engineering and construction partners. To meet these demands, engineering firms must invest in Industry 4.0/Internet of Things technologies to stay competitive and boost efficiency. In particular, the combination of artificial intelligence and automation make for better product designs and “smart” production lines. Having technology is one thing—using it effectively is something else. Engineering leaders must be prepared to invest in a technology adoption plan (often developed with the help technology consulting firms) and the necessary workforce training to launch fast and effective technology upgrades.
Overall, engineering firms are cautiously optimistic about 2023 and the challenges they must navigate. Supply chains are starting to stabilize, which makes forecasting and inventory management easier and more reliable. This “settling down” will lead to faster project development and increased customer demand for speed—which could be a problem if companies are still short of mechanical engineers to handle the increase in business. Executives must be strategic in their deployment of technology resources and the development of hybrid business models to increase operational performance and throughput.
Mark Crawford is technology writer in Corrales, N.M.
FAQs
Business challenges that engineering firms will face in 2023 include inflation, supply chain disruptions, labor shortages, sustainability, high customer expectations, and technology implementation.
What's the biggest challenge facing the engineering team right now? ›
The Widening Skills Gap: The rapid pace of technological advancement creates a constant demand for new skillsets within the engineering workforce. Unfortunately, educational institutions often struggle to keep pace, leaving a significant skills gap between existing talent and project requirements.
What are the threats to engineering companies? ›
Threats. Threats come from the external environment. These could include new industry regulations, increasing competition, economic shifts affecting client budgets, or rapid technological changes that make certain skills or methods obsolete. Identifying these threats is key to developing strategies to mitigate them.
What are the breakthroughs of mechanical engineering in 2023? ›
In 2023, mechanical engineering trends include Additive Manufacturing, Sustainable Design, Artificial Intelligence, Internet of Things (IoT), Robotics, Nanotechnology, Biomechanics, Energy Harvesting, Advanced Materials, and Human-Machine Collaboration.
What will be your biggest challenge in this mechanical engineering position? ›
Here are some common challenges mechanical engineers may encounter in their jobs, along with potential solutions to help you find ways to overcome them:
- Licensure and certifications. ...
- Project deadlines. ...
- Safety. ...
- Equipment malfunctions. ...
- Scope of responsibilities. ...
- New technologies. ...
- Complex projects. ...
- Communication.
Here are some common challenges that engineers face and how good engineers overcome them:
- Technical complexity: One of the most common challenges that engineers face is technical complexity. ...
- Time management: Engineers often work on multiple projects simultaneously, each with its own set of deadlines and priorities.
Some of the biggest ones are how to:
- generate the most power from waves and tides.
- make the internal combustion engine more efficient, both gas and diesel.
- make a jet engine more efficient and quieter.
- make a car lighter and cheaper to build.
- make an aircraft lighter and cheaper to build.
1. Phishing Attacks. The first way an employee can become a company's biggest cybersecurity risk is through phishing attacks. A phishing attack is where a criminal sends an email made to look like it's coming from a legitimate source.
What are threats in SWOT analysis for a company example? ›
Threats refer to factors that have the potential to harm an organization. For example, a drought is a threat to a wheat-producing company, as it may destroy or reduce the crop yield. Other common threats include things like rising costs for materials, increasing competition, tight labor supply. and so on.
What are the potential risks of engineering? ›
Engineering workplaces can be messy with oil, dust and other waste from machines and work processes. As well as this, slips, trips and falls are made all the more dangerous with the risk of falling into machinery or sharp edges. Managing these risks effectively needs attention to detail to identify potential risks.
Top 10 Highest Paying Engineering Jobs Of 2023
| SL.NO. | JOB | SALARY PER ANNUM(APPROX.) |
|---|
| 1 | Artificial Intelligence Engineer | ₹ 9,00,000 |
| 2 | Big Data Engineer | ₹8,00,000 |
| 3 | Blockchain Engineer | ₹8,00,000 |
| 4 | DevOps Engineer | ₹7,00,000 |
6 more rowsJan 28, 2024
As our world keeps changing, new technologies emerge that reshape the future of mechanical engineering. Artificial intelligence, advanced robotics, 3D printing and sustainable design are just some of the big trends influencing the field today. Exciting innovations are on the horizon!
What is the long term outlook for mechanical engineers? ›
The Future of Mechanical Engineering. According to the U.S. Bureau of Labor Statistics (BLS), the mechanical engineering field is expected to grow 7% by 2030, creating close to 30,000 jobs. That's about average for all occupations.
What is the biggest problem facing engineers today? ›
Business challenges that engineering firms will face in 2023 include inflation, supply chain disruptions, labor shortages, sustainability, high customer expectations, and technology implementation.
What is the most challenging part of engineering? ›
Electrical Engineering is often considered the most difficult due to its complex mathematics, intricate circuit design, and advanced problem-solving requirements.
What are the problems faced by the mechanical industry? ›
Cost Pressures: Controlling costs are another significant financial challenge faced by mechanical engineers in the industry. Fluctuating raw material prices, rising energy costs, and increased competition all contribute to the financial strain experienced by businesses in this sector.
What are some challenges facing the field of engineering? ›
The 14 Grand Challenges for Engineering
- Make solar energy economical.
- Provide energy from fusion.
- Develop carbon sequestration methods.
- Manage the nitrogen cycle.
- Provide access to clean water.
- Restore and improve urban infrstaructure.
- Advance health informatics.
- Engineer better medicines.
Although there are some challenges that are unique to each industry or field, some common teamwork challenges are:
- Lack of clarity. ...
- Trust issues. ...
- Personality conflicts. ...
- Withholding information. ...
- Lack of communication. ...
- Reduced engagement. ...
- Excessive staff numbers. ...
- Interior competition.
In a quality engineer career, the most challenging problem is to express your opinion about the product, many times going against the traditional assumptions. It takes a great effort for a QA engineer to accurately convey the opinion to the production team of a company to get justified results.
