New Survey Results Reflect How Manufacturers Are Managing Costs and Fueling Growth
As manufacturers look to modernize their supply chains, they’re encountering significant roadblocks—especially around cost, technology integration, and broader economic pressures. High equipment costs, outdated infrastructure, and unpredictable market conditions are making it harder than ever for businesses to invest in the upgrades they need to stay competitive.
To better understand these challenges, Mitsubishi HC Capital America conducted a recent survey exploring the realities organizations face when trying to modernize. The results shed light on the financial and operational pressures reshaping decision-making across the industry. From difficulties integrating new technologies with older systems to the rising cost of transportation and materials, the findings offer a clearer picture of why modernization is such a complex issue for industry leaders.
This data highlights the obstacles and provides valuable insights for companies looking to build more resilient strategies in today’s rapidly evolving landscape.
Primary Challenges in Supply Chain Modernization
While new technologies aren't yet seen as major disruptors, shifting policies and rising tariffs are starting to have a tangible and likely lasting impact. In response, companies are taking a range of new approaches—some expect little change in their equipment needs, while others are getting ready to replace outdated assets or rethink their strategies to grapple with growing economic uncertainty.
However, modernizing operations is still a big challenge for many. Rising transportation costs and unpredictable market conditions make things even more difficult, especially when integrating new technology with older infrastructure. In fact, 90% of survey respondents pointed to outdated systems as a significant hurdle. To tackle these issues, businesses are increasingly turning to flexible financing options. 90% said they will likely use financing to buy new equipment, which will help them manage short-term pressures while investing in future growth. Of those, 68% favored long-term, low-payment financing that aligns with their strategic goals, especially as 48% cited high equipment costs as the biggest barrier to modernization.
Rising Equipment Costs
Rising equipment costs remain a major concern, with 74% of respondents reporting increases over the past year. 47% said those increases are significant. Despite these challenges, 70% say their organizations are on track with modernization, and 37% regularly assess their technology needs. Business outlooks remain optimistic, with 69% reporting stable or growing pipelines and 44% expecting continued growth in the next six months. Equipment investment also remains strong, as 47% purchased new equipment in the past year, and another 41% did so within the last one to three years.
Even in the face of significant and evolving barriers, manufacturers are making ends meet by turning to innovative financing models to fill the gap. Innovation and modernization will only continue to be more essential to business success and sustainability.