The manufacturing industry is entering a transformative era in 2026, marked by unprecedented challenges and opportunities. For small to medium-sized businesses (SMBs), this year presents a chance to embrace modernization, build resilience, and drive growth.
ECI Software Solutions’ 2026 Manufacturing Trend Report highlights key industry shifts and provides actionable steps to help SMB manufacturers navigate this dynamic landscape. From digital transformation to workforce challenges and supply chain adjustments, this report equips manufacturers with the insights needed to thrive in today’s competitive market and make more informed, strategic business decisions.
1. The Digital Shift to Smart Manufacturing
Digital transformation is no longer a buzzword, it’s a necessity. In 2026, SMB manufacturers are moving beyond fragmented systems and manual processes to adopt smart manufacturing practices. This shift involves integrating automation and connected technologies to create end-to-end visibility across operations. By consolidating job costing, scheduling, inventory, and quality management into unified systems, manufacturers can improve efficiency, reduce downtime, and make data-driven decisions.
Key benefits include:
• 10-20% improvement in production output
• 7-20% increase in employee productivity
• Enhanced profitability and operational control
For SMBs, the focus is on practical, right-sized tools that address real operational challenges without overwhelming resources.
2. Workforce Challenges and the Skills Gap
The manufacturing workforce is aging, with one in four workers now over 55. Retirements are outpacing new hires, creating a knowledge continuity problem for SMBs. At the same time, production environments are becoming more demanding, with shorter lead times, increased customization, and higher expectations for accuracy.
To address these challenges, manufacturers are turning to technology to standardize processes, reduce reliance on tribal knowledge, and empower employees to focus on high-value tasks. Digital tools are not replacing workers but amplifying their impact, making teams more capable and resilient in the face of labor shortages.
3. Cybersecurity in a Connected World
As SMB manufacturers adopt more connected systems, cybersecurity has become a top priority. With 43% of cyberattacks targeting small businesses, protecting data and systems is now an operational necessity. Manufacturers are integrating IT and operational technology (OT) environments, which expands their attack surface and increases vulnerability.
Effective cybersecurity starts with fundamentals:
• Strong passwords and access controls to limit unauthorized system access and ensure only approved users can view or modify sensitive data. Regular software updates and backups
• Regular software updates and backups to protect against vulnerabilities, maintain system stability, and enable quick recovery in the event of disruptions or cyber incidents.
• Employee training to recognize phishing and social engineering attacks, helping staff identify suspicious activity and reduce the risk of human-related security breaches.
Whether operating in cloud-based or on-premises environments, SMBs must view cybersecurity as a core business discipline to safeguard operations and maintain customer trust.
4. Supply Chain Realignment and Cost Pressures
Tariffs and shifting trade policies are driving cost increases across manufacturing. SMBs are responding by diversifying suppliers, renegotiating contracts, and increasing buffer inventory. However, these adjustments add complexity to supply chain management.
To navigate these challenges, manufacturers are leveraging technology to improve visibility into costs, enhance forecasting, and streamline coordination across purchasing and production. Real-time data and connected systems enable SMBs to make faster, more informed decisions, protecting margins and maintaining competitiveness.
1. Strengthen Profitability and Performance Visibility
Consolidate systems to create a single source of truth for job costing, scheduling, inventory, and accounting. This clarity helps manufacturers quote accurately, identify inefficiencies, and make better planning decisions, while enabling leadership teams to monitor margins in real time and proactively address operational bottlenecks.
2. Automate Repetitive Tasks
Identify manual processes that drain time and resources, such as data entry and scheduling updates. Implement small-scale automations to reduce errors, improve throughput, and free employees to focus on higher-value work that directly supports customer satisfaction and revenue growth.
3. Invest in Workforce Development
Equip employees with the skills needed to thrive in a digital environment. Cross-training, ERP tool education, and best practices for digital workflows are essential for building a resilient, adaptable team that can support growth and reduce dependency on individual roles.
4. Prioritize Cybersecurity
Adopt security practices that match your level of connectivity and operational risk. Protecting data and systems is critical as operations become more connected, helping safeguard intellectual property, maintain customer trust, and minimize costly downtime.
2026 is a pivotal year for SMB manufacturers. The challenges of labor shortages, supply chain volatility, and rising customer expectations are driving the need for modernization. By embracing digital transformation, addressing workforce challenges, and prioritizing cybersecurity, manufacturers can build more resilient, agile operations that are better positioned to scale and compete.
ECI Software Solutions is committed to helping SMBs navigate this transformation with purpose-built ERP solutions that simplify complexity and empower manufacturers to thrive.
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