The U.S. manufacturing industry is evolving at a rapid pace, driven by new technologies, smarter supply chains, and an increasingly dynamic workforce. In 2025 small manufacturers will face a mix of opportunities and challenges as they navigate these changes. To stay competitive, small and medium-sized manufacturers (SMMs) will need to integrate cutting-edge technologies that were once only a realty for larger enterprises and train their workforce on how to use these technologies. Here’s a breakdown of our key predictions for 2025 and what manufacturers can expect.
Reshoring and Stronger Domestic Supply Chains
The COVID-19 pandemic and global disruptions have made it clear that traditional supply chains are vulnerable. As a result, reshoring — bringing manufacturing back to the U.S. — is expected to accelerate in the coming years. This trend will lead to reduced dependence on overseas suppliers, mitigate risks, and create more resilient domestic supply chains.
Predictions:
- Reshoring will increase. Many manufacturers are shifting operations closer to home to reduce exposure to international disruptions and logistics issues. Small manufacturers will benefit from reshoring by accessing local or regional supply networks that can provide faster turnaround times and more flexible production.
- New business opportunities. As OEMs and large manufacturers bring production back to the U.S., they will be looking for local suppliers to support their operations. This provides an opportunity for smaller companies to become embedded in global supply chains, even as manufacturing comes closer to home.
- Supplier relationship management will be key. SMMs should move beyond transactional relationships and focus on developing strong relationships with ongoing communications and increased transparency. This will help manufacturers react more quickly to market demands or disruptions.
How to Prepare:
- Strengthen relationships with local suppliers to create more reliable and flexible supply chains.
- Identify ways to meet the needs of larger manufacturers who are reshoring their operations and position your company as an invested partner in their supply chain.
- Contacting your local MEP Center to share your production capabilities and capacities is a good first step to expand into new supply chains.
Empowering the Workforce and Production with AI and Automation
Artificial intelligence (AI) and automation are here to stay. As labor shortages persist, manufacturers are turning to automation to boost efficiency, reduce costs, and maintain high levels of production quality. The good news is that these technologies, once out of reach for smaller companies, are now becoming more accessible. SMMs will need to invest in workforce training to ensure employees can work alongside advanced technologies like AI and robotics, ultimately empowering employees to perform higher-level tasks.
Predictions:
- Predictive maintenance powered by AI will continue to grow in popularity. Predictive maintenance helps SMMs avoid costly downtime. AI-driven tools can predict when machinery is likely to fail, allowing manufacturers to schedule maintenance before issues arise.
- Automation will increase. Small manufacturers will implement robots and automated systems to streamline repetitive tasks, improve accuracy, and speed up production.
- Flexible automation will become more accessible. SMMs can use robotic systems and AI-driven tools to automate production lines, which will allow for quicker adjustments and smaller batch runs without sacrificing efficiency.
- Upskilling will be in higher demand. Upskilling is essential as the demand for workers skilled in digital technologies increases. Manufacturers should consider offering training programs that cover AI, machine learning, and robotics, ensuring their employees are ready for the future of manufacturing.
How to Prepare:
- Start researching AI tools for predictive maintenance to reduce unplanned downtime.
- Look for cost-effective automation solutions, such as collaborative robots (cobots) or AI-driven production software, to improve operational efficiency.
- Stay agile by adopting flexible automation technologies that can be easily adapted to different production needs.
- Invest in training programs to upskill your workforce in areas like AI, robotics, and data analysis.
- Create a culture of continuous improvement and learning to ensure that employees stay adaptable to changes in technology.
- Contact your local MEP Center, WMEP Manufacturing Solutions. Its experts can provide guidance and support tailored to your specific AI or automation needs in addition to helping you leverage data for success.
The Rise of 3D Printing in Customization and Innovation
Additive manufacturing, or 3D printing, will continue to disrupt traditional manufacturing processes, allowing smaller companies to produce custom parts, prototypes, and small-batch runs at a fraction of the cost and time.
Predictions:
- Customization will become easier and more affordable. Small manufacturers will leverage 3D printing to create products or components tailored to specific customer needs, providing an edge over competitors.
- Rapid prototyping will be more commonplace. 3D printing enables manufacturers to test designs and iterate quickly, reducing the time and cost associated with traditional prototyping methods.
- On-demand production will reduce the need for large inventories. Small manufacturers will use 3D printing to produce parts as needed, reducing storage costs and minimizing the risk of overproduction.
How to Prepare:
- Invest in 3D printing technology to offer customization and speed up your prototyping process.
- Use 3D printing for low-volume or on-demand production, reducing the need for large inventories and lowering operational costs.
- Experiment with 3D printing for complex parts that would be difficult or expensive to produce using traditional methods.
Technology-Driven Quality Control and Compliance
With growing regulatory requirements and increasing pressure to maintain high product standards, SMMs will rely on AI to ensure compliance and improve quality control. AI-driven tools will help manufacturers streamline the compliance process, reduce human errors, and improve traceability.
Predictions:
- AI-driven quality control will help identify patterns in production data that may indicate emerging defects. This proactive approach will enable early intervention, reducing the likelihood of defective products reaching consumers and improving product reliability.
- AI tools for compliance and documentation will automate the analysis of regulations, policies, and technical documents, significantly reducing human errors and improving traceability. Small manufacturers will benefit from these tools to streamline regulatory reporting, ensuring compliance and minimizing the risk of penalties.
- AI for standard unification will simplify the process of reconciling discrepancies between different industry standards, helping manufacturers maintain compliance across various regions and sectors.
How to Prepare:
- Implement AI-driven quality control systems to identify defects early in the production process.
- Use automated compliance management tools to stay on top of regulatory changes and ensure that your products meet required standards.
- Leverage AI to streamline processes across various standards, improving consistency and reducing the risk of non-compliance.
The Growing Role of Cybersecurity in Manufacturing
As manufacturing becomes more digitized, the risks associated with cyberthreats are growing. With more operations relying on connected devices, AI, and cloud-based solutions, manufacturers are increasingly vulnerable to data breaches, ransomware attacks, and intellectual property theft. Cybersecurity will become one of the most important areas for SMMs to focus on to protect their operations, data, and reputation.
Predictions:
- Cybersecurity will be a top priority. As they add IoT devices, AI, and cloud technologies, the vulnerabilities for manufacturers will expand. This will require investment in cybersecurity to protect sensitive data, production processes, and intellectual property.
- Ransomware and data breaches will increase. As hackers target manufacturing companies, particularly smaller businesses that may not have dedicated IT departments, the risk of ransomware attacks and data breaches will rise. Manufacturers will need to implement stronger cybersecurity protocols to prevent these threats.
- Cybersecurity training will be essential. As digital tools become more integral to operations, training employees on security best practices will be a must. Preventing phishing attacks, securing devices, and maintaining strong passwords should become part of everyday training and operations.
How to Prepare:
- Invest in cybersecurity solutions such as firewalls, encryption, and intrusion detection systems.
- Regularly update software and firmware to address vulnerabilities and stay ahead of potential threats.
- Provide regular cybersecurity training for employees, ensuring they understand the risks, how to spot them, and how to mitigate these risks.
- Contact your local MEP Center, WMEP Manufacturing Solutions, to learn how it can help you assess your business’s current risk posture, identify any gaps, and implement solutions to cost effectively protect your digital and information assets and meet your legal and contractual cybersecurity and privacy requirements.
Embrace Technology to Stay Competitive
The U.S. manufacturing industry will be transformed by AI, automation, and the need for resilient domestic supply chains. For small manufacturers, this is both a challenge and an opportunity. The key to staying competitive will be embracing these changes early, integrating new technologies, and investing in cybersecurity and workforce development.
The future of manufacturing is rapidly approaching, and the time to prepare is now. With the right tools, strategies, and mindset, smaller manufacturers can navigate these changes and thrive in an increasingly dynamic industry. Contact your local MEP Center to see how it can help you prepare for 2025 and beyond.
3D Printing, Cybersecurity, Reshoring, Smart Manufacturing, Supply Chain and Technology
About the author
G. Nagesh Rao
G. Nagesh Rao, a member of the career Senior Executive Service, currently serves as Acting Director of the Manufacturing Extension Partnership at the National Institute of Standards and Technology (NIST). Before joining NIST, he was Chief Information Officer for the Bureau of Industry and Security (BIS), also within the U.S. Department of Commerce. Over the last 25+ years, Mr. Rao has worked for numerous organizations in the public, private, and not-for-profit sectors. Read more
Jyoti K. Malhotra
Dr. Jyoti K. Malhotra serves as the Division Chief for National Programs with the Hollings Manufacturing Extension Partnership (MEP) at the National Institute of Standards and Technology (NIST). She is a member of NIST MEP’s senior leadership team, responsible for strategic planning, operations, and building partnerships with public and private sector stakeholders. Dr. Malhotra has vast experience in interdisciplinary materials and devices research, product development, manufacturing, and commercialization. Her work includes applications in semiconductor, electronics packaging, energy storage, microelectromechanical systems, flexible printed electronics, LED lighting and medical devices. Read more