The world of manufacturing has shifted dramatically in the last several decades, facing changes ranging from the offshoring of work to increasing reliance on technology. But as consumer demand for sophisticated products increases and the capacity to compete in a global and fast-moving economy grows ever more critical, the nature of manufacturing continues to evolve.
1. Industry 4.0
Manufacturers are fully in the throes of the fourth industrial revolution, as advanced technology establishes “smart factories” that can run more efficiently and cost effectively than ever before, meeting consumer demands quickly and with the connectivity that today’s purchasers crave.
Artificial intelligence, advanced robotics, Internet of Things (IoT), and 3D printing are just some of the technologies transforming the future of manufacturing.
Artificial intelligence (AI) and machine learning have been game-changers for manufacturers by enabling computers to behave like superhuman brains, quickly recognizing trends and spitting out analyses in record time to help manufacturers shift strategies to better meet consumer demands and cut costs.
AI can help manufacturers, large and small, easily monitor and improve critical aspects of their business, including:
- Inventory management
- Asset tracking
- Supply chain visibility and forecasting
- Warehousing capacity
- Predictive maintenance on equipment
While use of robots used to mean having highly trained roboticists on-site to operate them, new autonomous mobile robots (AMRs) have made it easy for both smaller manufacturing firms and workers without sophisticated robotics training to set up, guide, and deploy robots to perform an array of applications and tasks on the factory floor. Rather than eliminating human labor, these robots have taken over repetitive, manual—and sometimes dangerous—work like lifting and carrying to allow employees to focus on more highly skilled tasking.
In fact, for the first time ever, non-automotive manufacturers purchased more robots than auto builders in 2020. Even with the pandemic, North American robot orders increased 3.5% last year, demonstrating robots will continue to be a growing part of the manufacturing scene.
Meanwhile, the IoT is enabling manufacturers to monitor, adjust, and control almost all aspects of their operations, gaining insights to help them optimize system settings for greater efficiency, safety, and cost savings. Smart sensors connected to the cloud, for example, can alert operators when equipment needs maintenance or if supplies are running low in a warehouse.
Additive manufacturing may be one of the biggest game-changers of all, allowing manufacturers to use computer-aided design (CAD) to quickly build prototypes and models and even mass produce parts and components on a scale never previously imagined. With 3D printing technology, many manufacturers have eliminated or at least greatly reduced tooling costs and positioned themselves to shorten product development time dramatically.
All of these new technologies have created greater opportunities for small to mid-sized manufacturing players because they have lowered the barriers to compete with larger businesses that tend to have more resources available.
2. Reshoring Rather Than Offshoring
The result of Industry 4.0 is accelerated demand for a highly skilled and technologically adept workforce. Technology is quickly and dramatically changing the future of manufacturing by eliminating the competitive advantage provided by offshoring manufacturing jobs to obtain cheaper labor. And that often means manufacturers need to shift labor they’ve offshored back to the developed world where they have greater access to these skilled workers.
Even so, skilled worker shortages have become chief among manufacturing’s woes. A 2018 skills gap study by Deloitte and The Manufacturing Institute indicates 2.4 million positions in the world of manufacturing will go unfilled between now and 2028. Institutions of higher learning are shifting to meet the demand for designers/innovators who will enter this new age of manufacturing, but they likely won’t shift quickly enough for today’s demands or the demands of the immediate future.
Manufacturers are looking for unique skill sets now that historically haven’t been associated with the sector, including:
- Soft skills like critical thinking, creative problem solving, and people management
- Digital competency that allows workers to interact with the technology that has assumed repetitive and manual tasking
- Skill in digital collaboration
- Expertise in process engineering and change management
While some of the skills gap will be filled by use of collaborative robots, manufacturers will still need skilled personnel to program and operate those robots. The requisite human factor isn’t going away anytime soon.
3. Sophisticated Consumers Driving Change
Manufacturers won’t be shifting offshore labor back to developed countries just to access more skilled workers, however. They’ll also be looking to develop (or redevelop) manufacturing facilities in countries with advanced economies to increase their proximity to their consumers.
Those increasingly sophisticated consumers are, in fact, major drivers of the future in manufacturing. Because of high demand for connected devices and products that meet consumers’ craving for convenience, personalization, and immediate feedback or maintenance, manufacturers who want to succeed in the new economy will have to adopt technologies that help them serve end users quickly, creatively, and even continuously.
Consumers are also driving shifts in the industry as they increasingly demand that manufacturers engage in sustainable production practices. That not only means responsible sourcing of materials, but also establishing avenues to see a product through the end of its life cycle.
Therefore, circular materials management will be critical. As an example, smart devices that are outdated or upgraded should be designed in a way where they can reenter the production cycle to reduce waste vs. being discarded in a landfill. The same goes for considering whether or not to develop greenfield or brownfield plants and the potential environmental impacts (or benefits) of each.
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The companies that invest in technology, develop a highly skilled workforce, and commit to meeting consumer expectations will be the ones who come to dominate the global manufacturing scene in the decades ahead.
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