What Manufacturers Need to Focus on in 2026
Originally published on October 30, 2026
“Hope is not a strategy. Luck is not a strategy either.” – Mike Sibley, James Moore
Rising costs, shifting tariffs and fast-moving AI are hitting manufacturers in 2026 all at once. In this episode of Moore on Manufacturing, Faith sits down with Mike Sibley of James Moore to talk through where manufacturers should put their attention this year and what separates companies that plan from companies that react.
Mike starts with some good news: productivity and logistics are both up, which means products are moving. From there, the conversation gets practical. He explains how tariffs should already be built into costing models, why AI governance has to come before automation and how to tell whether AI is actually paying off.
The last third of the episode focuses on cash. Mike shares a 15-minute weekly habit that changes how customers pay you, explains the cash conversion cycle and closes with the one exercise he’d ask every manufacturing executive to do for the next 12 months.
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Transcript
[00:01] Faith: Hi everyone, and welcome to the James Moore channel. Today I am here with Mike Sibley. Hi Mike, how are you?
[00:01] Mike Sibley: Good. Faith, how are you?
[00:01] Faith: Good. I’m really good. It’s been a fast summer. Kids are back to school. Things are happening and it’s all good things. Just busy.
[00:01] Mike Sibley: Yeah, it’s been a great, productive summer for us as well. So we’ve been enjoying it. Although here in Florida it’s been pretty rainy. I guess we needed it. But you get used to not having that and now all of a sudden all this rain, you’re like, “Come on.”
[00:21] Faith: Oh, I know. Well, then it’s the rain and then the dead humidity.
[00:37] Mike Sibley: Yeah, right. Exactly.
[00:37] Faith: The worst is when you’re on the golf course and it rains and you’re like, “Should I leave? Should I stay?” And then you stay and then it’s humid and you’re like, “Oh boy.”
[00:37] Mike Sibley: Well, even this past weekend we got out really early, 7:30 in the morning, but there was that dew all over the ground once the sun came out. All that humidity was brutal.
[00:59] Faith: And then the ball sticks, right? Even if you hit a great shot, there’s no roll after. It just sticks to the ground and you’re like, “Oh.”
[00:59] Mike Sibley: Yep.
[00:59] Faith: Well, today we’re talking about manufacturing in 2026: building resilience amid AI, tariffs and disruption. I feel like every day, even when I turn on my local news, we’re talking about supply chain, manufacturing, all the things, because that’s what everyone’s talking about right now. So the first question: manufacturers have spent the last several years adapting to constant disruption. As we move through 2026, what are the biggest challenges you’re seeing manufacturers face today?
[01:19] Mike Sibley: Well, I think starting off with some good news, we’ve seen some of the manufacturing statistics saying we’re seeing more productivity. We’re seeing logistics increasing. When logistics increase, that means products are moving. On the other hand, that creates some capacity constraints in logistics. So one of the things I think these manufacturers need is to make sure they’ve got really good security on their logistics.
[02:10] Mike Sibley: Beyond that, I think it somewhat depends on the sector you’re in, or how much of your supply chain is coming from overseas. How big are tariffs to you? How much disruption is that Middle East conflict creating for you? Or is most of your business and procurement coming in locally from within the United States?
[02:39] Mike Sibley: So we’re seeing different sectors and different size levels have different issues. But there are some commonalities. There will continue to be rising costs: labor costs rising, material costs rising. Those are obviously two big factors when you’re dealing with your pricing and your costing.
[03:02] Mike Sibley: Beyond that, logistics continues to be a factor. I know tariffs are one of the things we’re going to talk about, but it’s really dependent. A lot of companies are also now asking, how do we build in automation? Workforce isn’t just about rising labor costs. Workforce is also about the aging workforce and how you’re dealing with that. How are you setting yourself up with automation, machinery and R&D? Look at how you’re going to de-risk yourself for the future.
[03:35] Mike Sibley: So there are a lot of different aspects going on right now, and with our clients we’re really having to make sure we’re helping them identify this stuff. What’s the plan? What’s the mitigation? A lot is happening these days.
[03:35] Faith: Absolutely. So tariffs and trade policy continue to shift. How should manufacturers approach pricing, sourcing and long-term planning without constantly reacting to uncertainty?
[03:53] Mike Sibley: Yeah, and I think we’ve mentioned this before. At this point, tariffs are around. The problem is we’re still seeing some changes in tariffs. We just saw the tariffs come out on Canada, and what is that going to impact? So some companies are having to react to that. At a broad level, by now we should have tariffs pretty well built into our costing models. We should understand what they’re doing to our margins. Can we increase prices? If we can’t, coming back to margins, can we find other ways to improve our margins if we can’t fully pass that through?
[04:45] Mike Sibley: The other thing, if you’re dealing with changes in tariffs, meaning they’re going up like what’s happening with Canada now, you’ve got to look and say, what vendors are affected by this? What are we bringing in from Canadian sources? Are there other places we can source from? What’s that cost going to do to our product? How much impact is that? There’s an assessment that needs to happen on these things.
[05:12] Mike Sibley: And unfortunately, for some companies it’s become part of somebody’s job to continue to evaluate that, watch it and keep up with it, so you’re not having surprises. You can plan for that and potentially pass that cost through, depending on whether you have contracts with customers that allow you to pass it through or not.
[05:35] Mike Sibley: So there’s a lot of planning and effort that has to continue to go into monitoring and watching the costing models.
[05:35] Faith: Absolutely. So AI is one of the biggest topics in manufacturing right now. Where are you seeing organizations achieve measurable results, and where is the technology still falling short?
[05:59] Mike Sibley: AI is a big discussion, which is why we’re really launching our AI enablement services. We’ve been doing it, but we’re getting further into it because AI is going through a lot of transformation. There’s more and more that it can do. But it isn’t all just about how AI can help you automate, build things or do things for you. Before you get into that, you have to have a really good governance and security structure around it. You have to make sure people within your company are well trained and understand it. In other words, somebody’s not using their personal AI account to put company financial data or confidential data into it so they can do their analysis. They may be well-meaning, but they shouldn’t do it that way.
[06:52] Mike Sibley: The other side of AI, and you’re hearing a bit more about this, is the credit usage. The cost of using it is going up. There are ways to monitor that. There are ways to monitor your employees’ use. So when you start talking about ROI, you have to understand how the costs of AI work, and that can get complicated.
[07:15] Mike Sibley: Now, where are companies generating real business value? To get to your real question, one of the things we’re doing is building out workflows in different areas. In finance, for example, this is a really easy one: producing monthly financial reporting decks, financial reports and KPIs, and automating that. So now your finance team isn’t spending time doing all of that work and all that analysis. What does that mean for your finance team? That gives them more time to actually be more proactive, so they can go out and help the other teams. Where else is AI generating value? You’re seeing it in accounts payable, getting invoices into the system faster.
[08:01] Mike Sibley: Engineers are using it in their workflows. And I keep pushing that idea: build it into your workflows. Everybody knows it can help you do emails. I’ve got an AI assistant that basically helps me do all my calendaring and appointments and those kinds of things. So it’s really meaningful. Obviously I could talk all day on this. But it’s one of those things where companies have to set time aside and really get the help to understand how to maximize the use of AI.
[08:18] Faith: Absolutely. You touched on so many things. I feel like we could have a whole episode on what you just talked about, everything from managing your staff on using it to clients to understanding it. I think that’s brilliant.
[08:45] Mike Sibley: Yeah. Well, that’s what we’re seeing. In some cases people are just signing up for these AI accounts at work and trying to do stuff. And then we’ve seen companies who have been a little more formal, making sure they have the security, but then they’re like, “Well, we don’t know what to do with it from here.” That’s because there’s no formal process or program. I see it a lot in manufacturing, in the smaller companies, let’s just say under the $50 million range. You’re not seeing as wide an adoption because they don’t have the time and resources to put into it. I think it’s going to be an important area going forward to help with gaining some capacity for people.
[09:11] Faith: Absolutely. I’ve done lives with other people at James Moore, and one of them is Kyle Paxton. He talks a lot about continuing education in AI, how important that is for him and educating his clients on it too. I think that’s paramount. That is probably the most important thing.
[09:44] Mike Sibley: It absolutely is.
[09:44] Faith: Okay, so many companies are investing in automation and digital transformation. How can leaders determine whether those investments are truly delivering a return? You kind of just touched on that, but if you want to add anything.
[10:02] Mike Sibley: Yeah. First, if we’re talking about AI, you’ve got to understand the cost of it. You’ve heard these horror stories of no limitations, and next thing you know you’ve gone way past your credits and you’re spending a lot of money. But you should be able to see measurable, better access to information faster, in front of you. What we don’t do is we don’t let the AI make the decisions for us. But we should actually be able to see people gaining capacity. I’ve used it for hours and hours and it’s helped me get more done, and I know it has for other people.
[10:28] Mike Sibley: But one of the things that sometimes gets confused, and we’ve had some more Moore on Manufacturing conversations on this, is AI and automation. Automation can be built from AI, meaning within spreadsheets or using agents that can actually do the work, where the work becomes an automation routine doing the same thing over and over again. Sometimes with AI you have to be careful that it’s not hallucinating something or not giving you what you want.
[11:27] Mike Sibley: One of the things Anthropic, for example, will tell you is you still have to review the work. You still have to look it over and make sure it’s correct. Companies are still trying to figure out how to measure the ROI. Every company is. We still are. But I think we’re starting to see where people are opening up that capacity and they’re able to see what automation can do.
[11:51] Mike Sibley: One easy way is if you can avoid a hire that you wouldn’t have otherwise needed. That’s a really good example. If you see people having more capacity to do things, those are sometimes called soft costs. Soft costs are those opportunity costs, and now you have more time to do things.
[12:09] Mike Sibley: So I think what companies really have to do is understand what workflow are we automating? What is this helping? And then how do we measure against that?
[12:09] Faith: Absolutely. So two more questions. Cash flow remains a top priority for many manufacturers, obviously. What particular strategies can companies implement today to strengthen cash flow while continuing to grow?
[12:37] Mike Sibley: I’ll give one really quick one to get things started, and then I’ll go into a little more detail, not too much because I don’t want to overwhelm anybody. One thing companies can do is review their accounts receivable ledgers or agings every single week. Just once a week, take 15 minutes to walk through them, and then have a process to follow up with those overdue companies.
[13:04] Mike Sibley: Because what happens is, for the most part, your customers get trained. They know if they’re 15 or 20 or 30 days past due, nobody says anything. So they’re going to stretch the payments with the company that’s not the squeaky wheel. If that becomes part of your process and you build it in, they’re going to know that you’re the squeaky wheel.
[13:25] Mike Sibley: And if they don’t pay, you can say, “Well, we can’t ship anymore until you pay,” and those kinds of things. So having a formal process around accounts receivable and collections is a great way to start. Now, bigger picture, there’s something called a cash conversion cycle.
[13:43] Mike Sibley: You can use it as part of your statistics and KPIs to measure yourself. When companies are having cash flow problems, you’ve got to diagnose what is causing that. What’s the root cause? Is it because we’re growing? That requires some planning. Growth requires working capital. Or is it because our margins are slipping? Our margins are getting tighter, which means we’re producing less cash. Why are they getting tighter? What’s happening? We really have to understand what’s causing that and then implement strategies to help improve it.
[14:18] Mike Sibley: If it’s because you’re growing, can we get extended supplier terms? Can we do better with our customer collections? There are a lot of pieces within that you’ve got to dig into to understand the root cause of what’s creating it, so you can build specific strategies.
[14:38] Faith: Absolutely. So last question: looking ahead, what’s one strategic recommendation you would give every manufacturing executive, or that you’d like to implement too, that could help navigate the next 12 months?
[14:38] Mike Sibley: I’m a big fan of forecasting and budgeting because they’re good for building out expectations. But the next piece, what I would say to companies, is evaluate your risks and opportunities. What are your significant risks? Build in the resiliency, the mechanisms and strategies to try to minimize or mitigate those risks. Then look at your opportunities, because if you’re just going about your daily thing every single day, those opportunities are out there and you might miss them.
[15:37] Mike Sibley: Take a look and say, “Hey, we’ve got two or three potential opportunities that could really help our business this year,” and set some strategies to make sure those opportunities come to fruition. What can you do? Sometimes opportunities fall in your lap and you get lucky. But we’ve talked about it before: hope is not a strategy.
[15:57] Mike Sibley: Luck is not a strategy either. So if there are opportunities you can see, make them happen. If you spend a little time thinking about that, you’re going to be more proactive. You’re going to find ways to make those things happen. Again, this is another whole area we could spend a session on, but really understand those risks and opportunities and set some strategies around them.
[16:22] Faith: Absolutely. Well, today was a great conversation. I really appreciate you coming on live with me again. We’re going to come back for another episode in the next few weeks, because this ever-evolving manufacturing AI world feels like it’s changing every single day.
[16:41] Mike Sibley: Yes. And we have much more to come on that too as we get deeper into helping companies with it.
[16:41] Faith: Absolutely. Like I said, it’s the continuing growth, the continuing education for all of us. I think it has to be the most important thing, especially for everybody.
[16:57] Mike Sibley: Absolutely. I spend a lot of my own time just reading, understanding, playing around and experimenting, because sometimes you have to experiment too. You have to take that time. It’s sort of a personal investment, but I see the dividends paying off big time.
[16:57] Faith: Absolutely. All right, Mike, have a great week. Thanks for joining me today.
[17:14] Mike Sibley: All right. Thanks, Faith. I appreciate it.
[17:14] Faith: Thanks.
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