Web Analytics Made Easy -
StatCounter
top of page

Don't Overthink What Manufacturing's Future Will Look Like


Reading yet another article about the “future of manufacturing” recently led me to a fundamental question: What, exactly, is this future I’ve been reading about for the last 15 years? Who, exactly, is defining this future? And when can we expect this future to arrive? Five years? Twenty?


A decade ago, analysts were worried about challenges like fragmenting customer demand, rising wages in low-cost regions and the scarcity of technological talent. A complex and uncertain business environment appeared to be driving change. Managers who hadn’t yet gone through a significant global-scale crisis were hit by the Great Recession of 2008–2009. The emergency made them start thinking about the long-term value of strengthening business and operations with digital technologies.

This, of course, was before the COVID-19 crisis — before China become a frenemy of the West, and before Russia became an outcast. Back in those days, Germany was a major exporter to Russia and depended on Russian oil and gas for a large part of its energy needs.

A World Economic Forum report in April 2012 emphasized the role of rare minerals as a driver of innovation. The paper warned of China’s dominance of the market and called for the development of strategies to secure reliable supplies and to use material science to drive product innovation.


In 2012, the electric vehicle market was in its early stages of development and was considerably smaller than today. The term “gigafactory” was initially used by Tesla in 2013 to refer to the company’s first major manufacturing facility outside of the original Tesla factory in Fremont, California.


The 2010s saw an escalating push to establish circular economies, or processes in which the reuse, remanufacture and recycling of products is prioritized. This came hand-in-hand with the campaign to develop sustainable manufacturing. Such strategies have included the optimization of materials, waste management, increased energy efficiency, reduced water usage and the adoption of low-carbon technology. In retrospect, we can see how slowly manufacturing organizations came around to adopting sustainability policies and metrics.


When it comes to suppliers, manufacturers often are more transactional than strategic, focusing on cost per unit as a default. Learn how every manufacturer can create a framework for supplier selection in order to make good business decisions.


What was the future of manufacturing at this point? Back then, analysts touted the power of data streams enabled by information and communications technology (ICT) infrastructure and sensors. AI had not yet taken its place at the forefront of digital strategies. Instead, companies were investigating the benefits of real-time Big Data, IoT solutions, advanced automation, collaborative robots and cloud computing.


Google Trends offers a view on the futures that companies were exploring. In the U.S., industrial and business big data were trending on search engines in 2011 to 2012. IoT was in vogue in 2014 to 2015.

The sustainability campaign has simply exploded in the last few years, driven by institutions like the United Nations and World Economic Forum and regulatory requirements like the EU’s Corporate Sustainability Reporting Directive.


Between Recession and the ‘New Normal’

The global responses to the COVID-19 crisis changed everything: We now live in the New Normal. So, what are some of the factors that make the future of manufacturing different now than it was in 2012?

  • Population levels in the West continue to decline, and the global fertility rate is also falling. This could lead to a dire shortage of the workforce across the board.

  • The economic conflict between China and the United States has been ongoing since January 2018, when President Donald Trump began setting tariffs and other trade barriers on China.

  • The democratization of AI has begun. AI is becoming a powerful tool to manage complex data environments and augment people with capabilities beyond their mental horizons.

  • The ongoing climate campaign now features measures of emissions-cutting efforts. This was amplified in October 2018, when the Intergovernmental Panel on Climate Change published its special report on global warming of +1.5 °C.

In October 2019, the EU launched the International Platform on Sustainable Finance. Its objectives are to scale up the mobilization of private capital toward environmentally sustainable finance.


COVID-19: Impact

The COVID-19 pandemic found most manufacturing and supply chains totally unprepared for the upheaval. After the initial shock of population lockdowns, skyrocketing prices of strategic commodities and a semiconductor shortage, companies started to “think digital” like never before.


The two-year crisis period was a time of invention, innovation, remote collaboration and enormous flexibility. Digital became an inseparable element of operations, R&D and customer interaction.

During COVID-19, the future of manufacturing was envisioned as relying on the extensive use of collaborative and cloud-based solutions, human-less automation and the use of digital twins to accelerate prototyping, simulations and new-technology commissioning. Ubiquitous connectivity and data availability became a pillar of manufacturing and supply chain management. The old understandings of risk management and resiliency had to be updated with completely new approaches.

Resiliency in manufacturing refers to the ability of a system or process (e.g., production or supply chain operations) to recover quickly and efficiently from disruptions, challenges or unexpected events. It involves the capacity to withstand, adapt and rebound from adverse circumstances while maintaining continuous and reliable operations.


Resiliency has improved as digital technology and connectivity have become an integrated part of business worldwide. The information and data transparency enabled by AI-powered tools and high-performance computing are becoming the foundation of a hyper-transparent digital world. Complex digital twins are spanning entire value chains.


Post-COVID Improvements: Are We There Yet?

Uncertainty in the post-pandemic environment, however, has also surged. Organizations have learned to use digital technology to tame their supply chains, but geopolitical turmoil has spawned new challenges for European and U.S. manufacturers. The pressure is driving a wave of trade and manufacturing protectionism. Countries are acting to stay competitive, especially in energy-intensive areas like chip and electric battery production, defense R&D and manufacturing.


Near-continual lockdowns in China and international tensions related to Taiwan have made many companies reshore or near-shore production or supply chains. The U.S. has acted to make its industry more resilient by reducing its dependency on China and imports of key technology items. Europe, however, often seems to be on shaky industrial ground.


European manufacturing competitiveness continued to suffer in 2022. The Russia-Ukraine War led to an energy crisis and exacerbated inflation. Fear of Europe’s deindustrialization is being driven by the closure of carbon-emitting energy sources and intensifying competition from China and the U.S. in EV manufacturing and related infrastructure (e.g., electric battery production).


The world is struggling to regain balance. However, there will be no going back to the world of the last two decades. And we are still looking for a new narrative about the future of manufacturing.


The Future = Agility

A number of futures were created in the last decade. Each perspective was based on the way we understood the world according to the inputs, experiences and parameters we were able to calculate, estimate, and model.


In today’s world, the ways we live, consume and produce are continually being disrupted by technology. New technology arrives on our doorsteps in shorter and shorter cycles — the latest being the unstoppable invasion of AI across all aspects of human life.


Generative AI (GenAI) is a subset of AI that focuses on the creation of new and original data (e.g., images, text, audio, other types of content). GenAI may be a game-changer in terms of how people and technology work together or augment each other. The frenzy of attention that greeted GenAI in 2023 confirmed that we live in an “AI everywhere” world.


Despite being a very new technology in manufacturing, early adopters of generative AI technology are emerging. These organizations are piloting ChatGPT-like tools that provide users with information, content or code. Moreover, GenAI can be integrated into enterprise solutions such as enterprise resource planning, product lifecycle management and customer relationship management systems.

Referred to as “co-pilots,” GenAI technologies can be embedded into such systems to assist human users in generating and comprehending complex content. Additionally, developers can use GenAI to create or enhance use cases and develop applications.


Digital twins — a virtual representation of an object and/or process — are also knocking at the door. This tool is still finding its way to broader adoption, but the industrial metaverse is already a thing. Immersive, hyper-realistic digital twins that blend simulation, collaboration, management, and closed-loop traceability have the potential to create a parallel global world of manufacturing and supply chains.

The future of manufacturing has thus entered an era of continual change. It is fueled by cloud and edge computing, AI, supercomputing GPUs and the steady pace of innovation from hyper-scalers, established tech vendors and start-ups. As an optimist, I believe these technological tools offer a true democratization of the future.


My advice is to not overthink what the future will look like — the future of manufacturing, the future of energy, the future of work, the future of living, the future of science … the future of everything!

Instead, strive to visualize your company as a resilient, customer-centric, self-learning and developing organization. Build capability to access the value of digital technology during the initial phase of its life cycle. Even as unceasing waves of technological innovation threaten to overwhelm even the most optimistic adopters, the ability to assess, pilot and scale will remain the crucial competitive differentiator.

Many of the disruptions of the last decade were difficult or even impossible to predict. However, as always, there have been losers and winners. Some companies won by chance — they had the right product at the right time.


From the broader perspective, the winners of customer hearts will always be those who build their resiliency on the true value of technology, product and process innovation, customer focus, and continuous investment in both their people and in environmental sustainability.

Comments


Recent Posts
Archive
Search By Tags
Follow Us
  • Linkedin
  • Facebook Basic Square
bottom of page