Posted by: Angela Geller, Director of Product Operations, TOTVS

Latin America’s industrial outlook has not peaked in 2023. ECLAC (Economic Commission for Latin America and the Caribbean) indicates that the level of industrial production in August 2023 was 2.5% below the pre-pandemic level (February 2020) and 16.7% below the peak historical data for December 2013. Of the 27 activities analyzed in ECLAC’s Latin American Industrial Production Index (IPI), only 9 recorded higher levels than before the health crisis.

Despite the 2023 scenario, industry expectations in 2024 are more positive. ECLAC forecasts sector growth of 2.1% next year. Financial support and government measures such as promoting digitalization and sustainable development should help boost this segment. Speaking about the prospects for 2024, several points deserve attention of players in the industrial sector.

1. Digitalization of production

The first of them is the importance of expanding the digitalization of production. Technological investment is a fundamental factor in differentiating, qualifying and increasing the competitiveness of national industries. This is because through automation it is possible to achieve optimized management with clearly defined and organized processes and qualified data for decision-making, allowing for short-, medium- and long-term strategic planning. It is vital to dispel the myths around technology, stop viewing it as an expense and start viewing it as an investment. Today there are already low-cost mobility tools that have a high added value impact.

2. E-commerce industry

Another thing to focus on this year is the increasing presence of e-commerce industries in B2C (business-to-consumer) or D2C (direct-to-consumer) sales models. In a digital commerce driven scenario, many industries are missing out on important steps to achieve quick success and financial returns. However, it is necessary to pay attention to the necessary path to successfully work in the digital environment and, above all, to adapt existing activities.

It is critical that companies undertake careful planning and review the maturity level of the operation, understanding whether it can adapt to serve a higher volume and in a more clearly defined and sometimes shorter time frame. It is also necessary to define strategies for entering digital retail, understand what products will be available and under what delivery conditions, and organize the entire logistical aspect of the operation, which can be complex.

Another important point is to evaluate which channel is the best to implement this strategy, be it the marketplace, your own e-commerce, or both. It is also important to implement tools and systems for the administrative management of all processes, to have a structured back office responsible for work and delivery, integrating both marketing models of the company.

3. ESG in the industry

Finally, I continue to emphasize the importance of advancing the ESG agenda within the industry. Investors, customers, suppliers and the entire market are aware of the environmental sustainability, corporate governance and social aspects of companies, and this must also become a reality in the manufacturing sector responsible for these aspects. It is a fact that this program involves raising awareness, educating the parties involved and adapting to the ever-changing regulations. And at this stage, technology can make actions more efficient and well planned.

Today, the Latin market is already beginning to debate about Industry 5.0 and the development of various technologies, such as the introduction of generative artificial intelligence and other innovations in production processes. However, what I always say and continue to emphasize as a premise for 2024 is that it is necessary to have a vision of the path, understanding that as process maturity develops, companies can invest in improving this digitalization until they reach Industry. 4.0 – which is beginning to take its first real steps in Latin America.

The scenario may seem challenging, but companies that adopt a flexible and adaptable approach will be better prepared to thrive. Collaboration, sustainability, operational efficiency and commitment to sustainable practices will be critical factors for success. The industrial sector has a promising future ahead and those who can adapt and innovate will stand out in a smart, efficient and conscientious scenario.