By Whitney Gillespie January 14, 2025
Happy New Year to all my readers out there! As I look forward to another year of bringing you (hopefully) exciting content, I also want to start the year by talking about some of the challenges you may face in manufacturing finance. While it may be hard to believe the pandemic was 5 years ago, some lingering pandemic-related dynamics persist alongside the new things 2025 will bring. I’d like to address both aspects in this blog post and explore the top five challenges I believe finance teams in manufacturing will face and how these can be mitigated.
As 2025 gets rolling with what's hopefully a good start for all of you, some key considerations can help ensure you start the year with a fresh financial outlook. Below are the top five that I think will be most impactful for budgeting, planning, and forecasting and all manners of financial planning and analysis (FP&A) work.
Top 5 Trends in Manufacturing Finance for 2025
1. Managing Inflation and Costs
Inflation continues to be a significant challenge for manufacturers, fueled by lingering supply chain constraints, fluctuating energy prices, and geopolitical uncertainties. For finance teams, this challenge means navigating a maze of rising costs while safeguarding profitability.
Dynamic pricing strategies will thus become indispensable. Finance professionals will need to harness advanced forecasting tools to anticipate cost fluctuations and their impact on customer demand. Cloud-based finance platforms, such as OneStream’s best-in-class financial platform, with real-time expense tracking and variance analysis will play a central role. Ultimately, these platforms offer visibility into cost drivers and enable quick identification of inefficiencies.
Adopting integrated financial platforms allows manufacturing organizations to align budgeting and operational planning more effectively. Why? Because these tools empower finance teams to respond swiftly to market shifts, providing the agility needed to thrive in an inflationary environment.
2. Preparing for Global Supply Chain Disruptions
The global supply chain is still recovering from post-pandemic disruptions, but new challenges — including geopolitical conflicts and climate-related events — keep uncertainty high. In this volatile environment, robust scenario planning becomes essential for finance teams.
Advanced analytics tools will be especially critical in stress-testing supply chain assumptions and evaluating financial risks associated with logistics. To mitigate these risks, manufacturers are increasingly turning to nearshoring and dual-sourcing strategies. These approaches can increase short-term costs, but also enhance supply chain resilience.
By modeling these trade-offs, finance teams will play a pivotal role in assessing the financial feasibility of diversification efforts. Technologies such as AI-driven supply chain optimization will enable finance professionals to balance cost management with operational agility, ensuring their organizations can navigate global disruptions more effectively.
3. Driving Value Through Sustainability Initiatives
Sustainability has moved from being a regulatory checkbox to a critical driver of competitive advantage. As customers and investors alike demand greater transparency in environmental, social, and governance (ESG) practices, finance teams are placed at the forefront of sustainability reporting.
Carbon accounting and ESG metrics are therefore becoming standard components of financial reporting. Accordingly, FP&A teams must collaborate closely with operations to quantify the return on investment (ROI) for green initiatives (e.g., renewable energy adoption and waste reduction). Predictive analytics will prove invaluable in modeling the long-term benefits of these investments, enabling finance professionals to articulate both cost savings and revenue opportunities.
Unified corporate performance management (CPM) platforms will help integrate ESG data into broader financial planning processes. By aligning sustainability goals with overall business objectives, finance teams can position their organizations as leaders in environmental stewardship while driving financial performance.
4. Adapting to Workforce and Labor Trends
Labor shortages and the need for upskilled workers also remain pressing issues for manufacturers. Increasingly, finance teams are tasked with evaluating the financial implications of workforce investments, including automation, training programs, and retention strategies.
Enhanced benefits and flexible work arrangements are becoming standard, and these require careful cost analysis and ROI assessments. In addressing these challenges, technology will be a key enabler. Workforce planning tools driven by artificial intelligence (AI), for instance, can predict staffing needs and optimize labor costs by analyzing historical trends and future demand.
By collaborating with HR and operations, finance teams can develop actionable insights that support labor strategies aligned with broader business goals. This approach not only helps manage costs but also ensures organizations are equipped to navigate the complexities of a changing workforce.
5. Recognizing the Rise of AI and Machine Learning in Finance
AI and machine learning (ML) are revolutionizing financial processes in the manufacturing sector. In 2025, these technologies will be integral to creating accurate forecasts, optimizing budgets, and generating actionable insights.
AI-powered predictive models can analyze vast datasets to identify trends, risks, and opportunities, enabling finance teams to make faster, data-driven decisions. Through the automation of routine tasks such as data consolidation and variance analysis, FP&A analysts can focus on strategic initiatives (e.g., scenario planning, performance optimization).
Unified CPM platforms with embedded AI capabilities will further enhance decision-making, delivering precise, timely financial insights. By embracing these tools, manufacturers will gain a competitive edge by transforming data into actionable strategies that drive long-term success.
Conclusion
The manufacturing finance landscape in 2025 will be defined by adaptability and innovation. From mastering cost management amid inflationary pressure to leveraging AI for advanced financial insights, finance teams have at their disposal many tools and strategies. Organizations who embrace these trends will position themselves to not only weather the challenges ahead but also thrive in a complex, dynamic market.
Learn More
Want to dive deeper into the challenges facing manufacturing finance professionals and explore actionable strategies for your organization? Check out our white paper 6 Steps to Leading at Speed in Manufacturing. You’ll learn how to turn challenges into opportunities and lead your organization into the future with confidence.
