New technologies and business models have the heavy/discrete manufacturing industry on the verge of an innovative new period that promises greater productivity and the potential for lower costs.
Supply chain models are adding efficiencies, and smart sensors and automation technologies are making factories more efficient and safer than ever before. Recognizing the importance of this innovation, industry, academia, and governments are investing heavily in research and development to help national manufacturers become more competitive in 21st century manufacturing.
Political impact in 2016
Amid all this modernization, an unexpected turn of events from within the global geopolitical landscape may have a lasting effect on manufacturing. An international backlash against globalization rocked the political landscape on both sides of the Atlantic in 2016, leaving the level of future investments in question.
As this apparent retreat from globalization continues to unfold, international heavy manufacturers could find themselves redesigning their in-market models, which would obviously have a compelling impact on what the industry looks like in 2017 and beyond.
A look ahead at 2017
The predominant theme in manufacturing remains the concerted effort to move manufacturing to its smarter, more efficient, more innovative future. Here’s a peek at what’s driving change in 2017:
- The factory of the future: Tesla’s “Gigafactory,” may represent not just what future factories look like, but how companies approach their entire manufacturing process.
- Innovation partnerships: The Smart Manufacturing Innovation Institute (SMII) is an advanced manufacturing hub intended to drive advances in smart sensors and digital process controls that could dramatically, even exponentially, improve the efficiency of U.S. advanced manufacturing.
- Data-driven manufacturing: Cheap and ubiquitous sensing has afforded an unprecedented ability to gather huge amounts of granular process data in real-time. These sensors, along with the data they generate and the analytics tools to process that data, make up the connected network of the Industrial Internet of Things (IIoT), and are critical elements of the next generation factory.
- The changing workforce: Automation is changing the mix of jobs in and around factories. Much of the traditionally repetitive or dangerous work is being automated–driving the need for new sets of skills, especially for technicians and programmers. So, while some jobs are becoming obsolete, the reality is that automation does not always mean fewer jobs, it merely requires different jobs.
- Protectionism and localization: The rise of protectionism is changing how global companies think about expanding, and where they might locate their facilities. If the transition to a more localized economy is more than temporary, we can expect to see more companies emphasizing local production and distribution of heavy manufacturing output.
Heavy manufacturing may seem to outside observers to be the oldest of “old school” industries. But in reality, heavy manufacturing is a harbinger of practices that will “seep” into other industries. Emerging technologies and digital transformation will allow players to jockey for competitive advantage through innovation in time-to-market, speed of innovation, improvement in process, and reduction of costs. Imagine the lessons to be learned here, and how they can be applied in more agile, competitive environments.
For a deeper look at the change-drivers affecting manufacturing in the coming year, read my paper, GE Digital and the State of Manufacturing, 2016 in Review and 2017 Outlook.