As the New Year gets underway, the editorial team at the Manufacturing Leadership Council offers its predictions for the year ahead. Contributors to this blog include David R. Brousell, Jeff Moad, Sankara Narayanan, and Paul Tate.

M4.0-Inspired Global Competition to Intensify …

Global manufacturing competition based on Manufacturing 4.0 techniques and technologies will sharpen this year as manufacturing industries in countries around the world, some supported by their governments, step up their efforts to differentiate, to become more efficient and productive, and to create higher levels of value for their customers and stakeholders. M4.0 elements — including the Internet of Things, analytics, new production methods such as 3D printing, integrated organizational structures, and digitized business processes – will become better understood and more widely adopted as M4.0 dominates an increasingly pervasive industry-wide conversation about the future of manufacturing. And M4.0 initiatives and projects, already underway in many western European countries, in North America, and in Asia, will grow in numbers and in scope as test cases prove out value propositions.

As Process Transformation Matures Into Corporate Re-Invention

As companies continue to apply new Manufacturing 4.0 technologies and more collaborative approaches across their enterprises to streamline and improve operational processes, they are beginning to understand more about the impact and value these new approaches can offer for the future of their entire businesses. This year will see leadership teams begin to stand back from the digital fray and try to get a clearer overall view of how this wave of digital transformation is likely to change the very nature of their businesses in the years ahead. While M4.0 deployment initiatives have tended to focus predominantly on process improvements and transformations so far, now is the time for manufacturing industry leaders to explore the broader possibilities of how the digital industrial revolution can truly help them re-invent their corporations for the future.

The Workforce Will Get a Digital Upgrade …

In 2018, many manufacturers will begin to confront the fact that, in order to effectively drive digitization as a coordinated, strategic imperative, they will need a digitally reskilled workforce. Right Management and UI Labs, for example, predict that manufacturers will need to recruit a need breed of employee into a wide range of newly-defined functions needed to drive everything from digital design to digital manufacturing. Examples: model-based systems engineer, virtual reality/augmented reality system specialist, machine learning specialist, and predictive maintenance system specialist.

And Leadership Teams Will Be Retooled, Too

Manufacturing company leadership teams as well as succession planning committees will be increasingly focused this year on digital acumen as a key competency for their executive ranks, including corner office spots. Executives determined to climb the corporate ladder will be required to talk the talk and walk the walk of technologies such as AI, analytics, additive, and cyber security, and understand the potential of these and other technologies to shape their businesses in the years ahead. Software knowledge will become as important as production line experience as stakeholder value becomes increasingly attached to digital progress. Aspiring leaders will also need to be able to manage flatter, more collaborative organizations, whose employees have become more empowered because of connectivity and data.

Public Debate Intensifies Over AI, Robotics

A public debate over the societal impact of two technologies that will increasingly be used in manufacturing – robotics and artificial intelligence – will intensify in 2018. Two narratives that have been shaping the debate – one focused on fears that advanced robots and AI will result in fewer jobs, privacy violations, and will even threaten the human race and the other centered around potential advances in efficiency and productivity – will continue to butt heads until manufacturers begin leading the way to greater understanding and appreciation of the technologies and actual effects on productivity and jobs. As the Information Technology & Innovation Foundation wondered in a recent article, “Will 2018 be the year in which hype, ignorance, and panic are replaced with a more measured and thoughtful discussion of exactly what AI can and cannot do?”

Machine Learning Focuses First on Quality

The fascination with machine learning’s potential will begin to rapidly transition to real-life test cases and applications that deliver measurable competitive improvement. The first area of focus for many manufacturers will be quality process improvement. In a bid to optimize resources, reduce scrap, cut warranty costs, and avoid lost sales, manufacturers will build algorithms that allow them to improve in-line and end-of-line testing, enabling them to spot problems earlier in the production process and even alert operators when it looks like quality is slipping.

Security Concerns May Disrupt the IoT

Not that it hasn’t happened before, but a major, high profile IoT security breach is in our near future. And, when it happens, manufacturers will finally be forced to take a critical look at the vulnerabilities and risks that IoT deployments bring to products in the field (and their users) as well as the plant floor. The fact is that many of the IoT devices now being deployed simply haven’t had strong security built in. And traditional security approaches such as using firewalls to keep the bad guys out simply won’t work in the IoT world where there really is no periphery. Manufacturers will be forced to search for a new generation of solutions that inject security at the individual device level and use tools such as machine learning to quickly detect and respond to breeches.

Disruptive Business Models to Emerge Through Monetization of IoT Data 

Notwithstanding a disruptive cyber attack, the Internet of Things is expected to have a greater business impact this year as manufacturers seek to reap the business value of technologies to devise, deliver, and monetize new products and services.  By employing analytics to IoT data to identify patterns and trends, manufacturers will seek to improve operational efficiencies including equipment performance as well as create better experiences for customers buying and using their products and services. The push will be on to turn insights into revenue and, in the process, potentially create new, disruptive business models that will provide growth into the future. Manufacturers are also expected to start exploring the potential of an emerging generation of software platform that will enable them to better manage digital data from the IoT, shop floor applications, and back-end systems.

More IT/OT Collaboration Will Take Place

Data isn’t restricted by functional boundaries anymore. It needs to be shared, interpreted, and consolidated to improve end-to-end operations and business decisions across the enterprise. But that can’t happen without close collaboration and coordination between all parties in the corporate data chain. Perhaps most importantly, the momentum behind recent digital transformation initiatives on the plant floor will make the effective collaboration between Corporate IT and production-focused Operational Technology groups more important than ever this year.  Whether it’s the appointment of an overall corporate Chief Data Officer with multi-functional reach, or the formation of closely-aligned IT/OT teams, every manufacturing organization will need to create new collaborative IT/OT organizational structures that can maximize the multiple data assets it’s now generating.

The Plant Floor Is Going to Get Visual

After the rapid adoption of early-stage augmented (AR) and virtual reality (VR) systems in many manufacturing organizations over the last year or so, data-driven visual technologies have begun to prove their worth in a host of production activities – from quality control, to machine inspection, maintenance, engineering support, and training. Expect virtual and augmented reality systems to proliferate on the plant floor in the year ahead as companies begin to recognize their potential value and increasingly deploy them in real-time operations. Employee resistance will be swiftly overcome as workers become both familiar and excited by the new way of working. An increasing number of off-the-shelf plant-floor applications for both AR and VR systems will also emerge to help drive easier and more effective deployment.