Manufacturing is one industry that stands to gain the most from leveraging new technology. From automation of menial tasks to streamlining business processes for increased revenue, technology trends will inherently change the way that manufacturing businesses operate. If your business is in manufacturing, keeping up on the trends is essential to making informed business decisions and quality technology investments. Here is what you need to know about the trends that are changing the manufacturing game – and why you should consider leveraging them for your business success.
Invest in IoT
If you were to pick one smart technology investment for 2019, the Internet of Things should probably be it. IoT, or the interconnection of smart devices within existing internet infrastructure, will allow businesses to accomplish important metrics like increased efficiency, reduced costs, improved safety, better compliance with industry regulation, and faster innovation of products. IoT’s growth can be attributed to three main factors:
- Better infrastructure. As internet networks continue to grow, big businesses are watching the launch of 5G, which will make download speeds and mobile computing even faster.
- Smaller sensors. Smart devices rely on a network of sensors to enable communication. Smaller sizes allow for more points of contact so there is better communication between devices.
- Cloud computing. IoT could not exist without cloud computing, as devices produce large amounts of data.
A recent survey found almost 2/3rds of manufacturers agree that applying IoT to their products will increase their profitability over the next five years. As such, they are planning on investing $267 billion in IoT in the year 2020.
Aside from creating innovative products, manufacturers also recognize that IoT will empower them to make more informed business decisions, because of the data connected devices produce. Currently, almost 1/3rd of equipment and production processes leverage smart technology or embedded intelligence. Expect IoT to have a transformative effect not only on how manufacturers create products, but also how they produce them
Consider Looking Into Predictive Maintenance
When critical equipment malfunctions, manufacturers can experience serious lags in production, efficiency, and revenue. Downtime is costly and hinders organizational productivity. A recent report by Information Technology Intelligence Consulting found 98% of organizations lost over $100,000 from a single hour of downtime. Ensuring smooth, consistent operation of all manufacturing equipment is a top priority for business owners, which is where predictive maintenance comes in.
Predictive maintenance programs work by monitoring equipment through pre-set performance metrics. It integrates with IoT technology and assesses data to predict future performance issues and identify when maintenance should occur. Best of all, monitoring tests occur when the equipment is in operation, so businesses do not use productivity due to the equipment shutdown.
McKinsey and Company, a management consultant firm, predicts that widespread adoption of predictive maintenance could lead to positive outcomes – a reduction of unplanned outages by 50%, maintenance cost reductions of 20%, and extended machine life.
Shift Your Models of Supply
The B2B model of doing business is gradually switching to a B2B2C – in other words, business to business to consumer. It sounds confusing, but it is actually just the process of integrating a business to consumer approach with the business to business approach to increase revenue. Opening a sales channel that sells directly to the consumer has several benefits:
- You can sell to the consumer for MSRP, rather than the whole sale price, which will increase profits.
- You can increase the speed of your products to market, instead of getting locked in a holding pattern inherent in the traditional sales cycle and “presales.”
- You have complete control over your brand image, so you minimize the risk of being misrepresented by a third party.
- You can leverage consumer data to make more informed business decisions. Selling directly to consumer gives you access to information about them that you can use to create more tailored products and experiences.
Digitize Your Supply Chain
Keeping a competitive edge in the manufacturing sector is all about optimization. The speed at which you produce quality products is an essential driver of revenue, on par with pricing. Effective supply chain management can eliminate the need for waging a pricing war with competitors, and the key is digitization. Leveraging technology will allow your manufacturing business to run more efficiently, give you more control over business operations, reduce overhead, and ultimately drive customer satisfaction.
Digital solutions exist for all parts of the supply chain, including:
- Optimization of manufacturing processes
- Planning sales and operations
- Managing the lifecycles of a product
- Gathering and leveraging business intelligence
- Optimizing inventory and business networks
A recent report from PwC found that ¾ of manufacturers expect to digitize their supply chains by 2020, making it a must for any company who wants to maintain a competitive edge.
Use Technology to Develop Your Workforce
Technology can optimize your business processes, but it is also important for the success of your workforce. It’s no secret that the manufacturing industry is suffering from serious skills gaps – while automation allows businesses to outsource repetitive assembly or menial tasks to machines, skilled production positions are difficult to fill. A recent study from Deloitte and the Manufacturing Institute found that digital talent, operational management, and skilled production positions will be three times more difficult to fill in the next three years. Between 2018 and 2028, there will be 2.4 million unfilled skilled manufacturing positions. Some of the biggest gaps will exist for manufacturing or process engineers and digital twin engineers.
Though demand is part of the problem, manufacturing companies can be a part of the solution. Workforce development can occur within the organization by leveraging connections, industry partners, and creating career pathways using evidence-based practices.
Leverage 3D Printing to Streamline Production
One thing that stands to streamline the process of production is increased adoption of 3D printing. Rapid prototyping is now more feasible than ever, and it allows developers and designers to troubleshoot products and get higher quality models out to the consumer faster. Additionally, 3D printing allows manufacturers to make their products “on demand” rather than creating and warehousing them at additional cost. At a more basic level, 3D printing also allows businesses to create proprietary tools and parts to aid in the production process – for example, it allows for the seamless creation of molds, jigs, and fixtures that before would take months to make.
A final trend that is defining modern manufacturing is “reshoring” – or bringing back the production of goods to American soil. Previously, off-shoring was popular because it involved less overhead and labor was less expensive overseas. Now, however, transportation costs are rising and a volatile trade climate makes off-shoring more expensive. Finally, technology is replacing human workers for menial tasks, so software can do what overseas labor can do more efficiently and at a similar cost. As a result, more companies are bringing their business operations back to the United States, which can also improve consumer perception of the brand.
The manufacturing industry stands to experience many changes as the result of technological innovation. Businesses wanting to maintain their competitive edge should invest in some of the available technology, when it makes sense for their brand and market share. Don’t be complacent – embrace digitization to improve your business processes, products, and relationship with your customer base.