We are nearly three months into 2026, and it’s become clear that market dynamics in the manufacturing sector are unlikely to settle down anytime soon. Front and center is the Supreme Court’s recent ruling against presidential tariffs enacted under the International Emergency Economic Powers Act (IEEPA). The ruling has triggered more than 2,000 lawsuits aimed at reclaiming tariff payments. Meanwhile, the White House has responded with new tariffs that will expire 150 days after they go into effect unless approved by Congress.
However, quickly evolving tariff policies are just one wave manufacturers need to ride. They also face growing uncertainty due to conflicts in Eastern Europe and the Middle East — even as they balance rapidly shifting costs, customer demands and supply chain dynamics. Today, automation is critical to gaining the agility to navigate all these tides.
Managing pricing volatility
Continued inflation and tariff uncertainty mean manufacturers need to adjust customer pricing to match costs on a frequent basis, and the new normal is to push cost increases onto the customer rather than absorbing the margin loss. So, keeping on top of material and production costs and justifying prices increases within the supply chain is essential.
Similarly, manufacturers are beginning to quietly shift the cost of environmental responsibility to customers. These include the rising costs for fuel, electricity, and related products required for clean production, as well as expenses related to properly disposing or recycling end-of-life goods, packaging and scrap.
Manually trying to manage the complexity and volatility of all these cost considerations can lead to misalignments that either cut into the bottom line or lower a manufacturer’s price competitiveness. As a result, more companies are using their enterprise resource planning (ERP) system to automatically adjust pricing based on the costs they incur. For example, one manufacturer that used to take 100 to 120 hours to update customer-specific pricing can now complete the job within 2 hours using an ERP system to automate the process.
Optimizing the supply chain
Recent changes in U.S. tariff policies are leading manufacturers to reconsider suppliers in countries where it had become prohibitively expensive to do business. Additionally, some companies are signaling that they may increase inventory now to avoid potentially higher tariffs in the future. At the same time, manufacturers need to adapt quickly to changes in market demand.
Supply chain integration across platforms and applications can help manufacturers to strategically adapt their supply networks to current conditions. The availability of continual updates on product quality at the network and supplier/contract manufacturer level facilitates operational efficiency and fosters greater knowledge sharing.
It can be particularly powerful when real-time data is used in combination with analytics and applications for ERP, supply chain management (SCM), customer relationship management (CRM). On one hand, it enables manufacturing firms to identify the best partners in their supply network at any given time based on skills, offerings, past performance and other factors. On the other, it empowers manufacturers and their partners to collaborate and ultimately orchestrate efforts to adapt to changes in demand in real time — without impacting quality levels.
Hedging bets with onshoring and nearshoring
U.S. supply chains remain uncertain about China, prompting companies to hedge their bets by expanding operations domestically and along the southern border. Early 2026 production planning showed a clear tilt toward deeper manufacturing ties with Mexico and a hiatus in engaging with Canada. However, that was before the newly escalated tensions between the Mexican government and gangs.
Whether onshoring or nearshoring, real-time data captured by a manufacturing execution system (MES) can prove invaluable for gaining an immediate end-to-end view of shop floor operations across multiple sites. This enables manufacturers to quickly identify production bottlenecks in their operations and quickly make informed decisions that will increase production efficiency, improve delivery times and reduce costs.
Other companies have gone further and are leveraging real-time data and MES software to drive lights-out or near-lights-out production runs. For instance, one manufacturer has expanded operations from the U.S. and remotely runs lights-out shifts in Mexico, minimizing staff demands while maximizing productivity.
Balancing Automation with Flexibility
Fully automated work centers are indeed becoming the norm in high-volume environments with long production runs and strict specifications. Here smart machines, collaborative robots, vision systems and advanced material handling can significantly reduce labor costs while delivering higher throughput and more consistent quality than traditional work centers. Enabled by increasingly sophisticated, AI-driven control systems, these technologies are more capable, affordable and accessible than ever. This is leading to a tri-fold automation strategy built around smart machines, robotics and vision systems that is real and growing.
Yet one of mid-market manufacturing’s key competitive advantages is flexibility: the ability to tool up quickly, run a job, ship product and move on to the next job within weeks or months. For many infrequent or shorter-run jobs, the time and return on investment required to justify full automation simply does not exist.
As smaller jobs continue to shift around more frequently due to tariffs, industry consolidation and demand uncertainty, many manufacturers are doubling down on offering basic manufacturing services that compete on agility and reliable execution with minimal automation investment.
Success with this model depends on a well-orchestrated business built on integrated ERP and MES systems, paired with a shop floor equipped with modern primary production assets, such as smart presses, molding machines and surface-mount technologies. These machines can handle core production accurately and repeatably, while being supported by simple gantry-style robotics for part handling and well-trained operators responsible for quality assurance, light assembly, packaging and materials movement. This balanced service-level approach is well-suited to thrive amid continued uncertainty and an investment-adverse mindset in 2026.
Conclusion
Manufacturers today need to ride waves of rapidly shifting tariffs, costs, customer demands and supply chain dynamics. By using automation to dynamically adjust pricing, align supply chains, facilitate onshore and nearshore operations, and optimize the shop floor, companies can gain the agility to navigate changing market conditions. Not only does this position manufacturers to mitigate risk and improve profitability today; it also lays the groundwork for expansion tomorrow.
