June 10, 2025 Against the Odds: Mastering Resilience in Manufacturing

Economic pressures, supply chain challenges, and cybersecurity risks are shaping the strategic landscape of manufacturing worldwide.

By Adam Beckerman, Manufacturing and Distribution Leader and Assurance Partner, Aprio, LLP

The manufacturing and distribution industry is at the core of our global economy, continuously driving innovation. And yet, the industry is once again facing unprecedented challenges. In an ever-evolving global market, macroeconomic pressures, supply chain challenges, and cybersecurity risks coupled with a volatile geopolitical climate will require strategic actions from companies seeking to enhance their resilience and achieve cost-efficiency. 

Navigating Macroeconomic Pressures

Despite an ongoing trade war, globalization continues to drive market dynamics and manufacturers and distributors must confront several significant macroeconomic pressures, including inflation and market volatility. These factors place a heavy influence on the cost of raw materials, fluctuating demand, labor shortages, and the overall profitability of a business.

With global markets in flux and recent inflation, it’s not a surprise that 59% of manufacturers have experienced increased operational costs per unit (including component and material costs) in the past year, according to the 2025 U.S. National Manufacturing Study from Aprio. Even though operational performance remains stagnant at many companies, few are implementing the best practices required to drive cost reductions, enhance workforce effectiveness of frontline employees, and gain a competitive edge.

How manufacturers and distributors respond to the macroeconomic pressures over the next 12-to-18 months will play a crucial role in determining their long-term success. To effectively navigate these pressures, manufacturers and distributors need agile strategies that allow them to easily respond to rapid changes in the market. 

Overcoming macroeconomic pressures

Despite the significance of these challenges, opportunities for innovation and growth are readily available. Savvy manufacturing leaders should focus on strengthening their organizations’ agility, making sure best practices are implemented to improve operational, financial, and market performance.

This can be done by leveraging advanced technology, operational improvements, back-office automation, and enterprise resource planning (ERP) solutions to enhance productivity, reduce costs, and improve the flexibility and responsiveness of their operations. Additionally, rigorous annual reviews of sales plans, targets, and efficiencies on the manufacturing floor can help to ensure long-term resilience and alignment with the quick turns of the markets, customers, and distribution channels.

Supply Chain Vulnerabilities

One of the biggest issues impacting manufacturers and distributors is supply chain disruption. During the COVID-19 pandemic, manufacturers were left to analyze nearly every aspect of their supply chain virtually overnight. And while the dust did eventually settle, the tariffs package announced as “Liberation Day” marked a major shift in U.S. economic policy that could set off a domino effect that may impact supply chains. Almost a quarter of companies import more than half of their components and materials, and almost a third spend $1 million or more on customs and tariffs.

While many manufacturers recognize growing supply chain risks and the need for operational improvements, most continue to experience supplier problems, especially product delays and product defects. Communicating with suppliers is crucial to maintain supply chain stability, especially in today’s environment, however, only 36% share forecasts with primary suppliers.

This data highlights the dependency some companies still have on imports and the lack of collaboration with suppliers, which increases key vulnerabilities and exposes companies to production delays, stock shortages, and quality issues. While reshoring efforts are on the rise, manufacturers and distributors who continue to spend heavily on imports may face supplier-related disruptions. Strategically addressing these gaps requires a shift towards supplier diversification.

Building resilient supply chains

To address the gaps above while building resilience and reducing costs, companies need to adopt a multi-tiered approach with a strategic shift towards supplier diversification. To effectively increase supplier collaboration, it’s crucial for manufacturers and distributors to share forecasts and develop long-term relationships with their suppliers. Investing in regional supplier networks, leveraging the right technology, and reshoring production where possible can help to mitigate risk and reduce the burden of tariffs. Additionally, establishing contingency plans and expanding supplier audits to include key criteria, such as quality, financial stability, and compliance can prevent future supply chain disruptions and regulatory risks.

Cybersecurity Risks in Manufacturing

Since the reliance on technology and digitalization in modern manufacturing continues to grow, so does the need to secure the collection and storage of sensitive data. While cybersecurity remains a critical concern for the manufacturing and distribution industry, nearly 48% of manufacturing companies experienced at least one breach of networks and data in the past year and 17% reported five or more breaches. And yet, many best practices to improve cybersecurity are not made a top priority, even the most-used approaches are deployed at only half of the companies surveyed, such as cybersecurity training (52% of companies), cybersecurity policies (50%), and cybersecurity audits (46%).

As manufacturers and supply chains continue to become increasingly digital their exposure to potential cyber threats rises. Cyber-attacks from data breaches to ransomware and phishing pose significant security risks to the manufacturing and distribution industry, such as financial penalties, regulatory consequences, disruption of operations, and reputational damage, making robust cybersecurity measures imperative.

Strengthening cybersecurity in a digital world

Understanding the inherent vulnerabilities to the manufacturing and distribution industry, as well as implementing cybersecurity strategies, is essential to mitigating cyber risks. Investing in cybersecurity will look different for every company, but the basics should include implementing firewalls, encryption, and intrusion detection systems. Manufacturing and distribution companies must prioritize cybersecurity measures by adopting a comprehensive framework involving:

• Due diligence: Regular maintenance and updates of data security protocols and cloud-based platforms and conduct thorough vetting of third-party vendors to evaluate their cybersecurity practices.
• Employee training: Continuous education for employees at all levels on cybersecurity protocols to increase awareness and reduce the exploitation of human errors that could potentially lead to data breaches.
• Encryption and data protection: Implement robust encryption methods and access controls to safeguard sensitive information throughout supply chains.
• Collaboration with stakeholders: Engagement amongst key industry stakeholders to share information on cybersecurity threats, best practices to enhance security, and establish response plans to address any incidents when they occur. 

Reshaping Strategies that Adapt to Modern Manufacturing

While manufacturing and distribution firms recognize the growing risks impacting the industry and the need for improvements, most remain slow to act. To effectively navigate macroeconomic pressures, supply chain challenges, and cybersecurity risks, manufacturing and distribution companies must prioritize proactive risk management.

By understanding the unique vulnerabilities impacting the industry and seizing the vast opportunities that are reshaping modern manufacturing, industry leaders can implement highly adaptive strategies to enhance resilience, achieve sustainable growth, and remain competitive.

About the Author:
Adam Beckerman is the Manufacturing and Distribution Leader and Assurance Partner at Aprio. Adam has more than 20 years of experience enabling the success of manufacturers in all stages of the business lifecycle whether they are starting up, growing, or getting ready for an equity event. He is passionate about helping established and high-growth manufacturers in the flooring, chemicals, plastics, and food industries drive efficiencies into their manufacturing processes.

Contact Adam to learn more about the challenges impacting the manufacturing and distribution industry.

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