As the New Year gets underway, the editorial team at the Manufacturing Leadership Council as well as members of the MLC’s Board of Governors offer their predictions for the year ahead.
Economic Uncertainty Will Influence M4.0 Velocity
As the new year begins, mixed economic, market, and political signals have conspired to create a less predictable business climate for manufacturing, potentially affecting the velocity of Manufacturing 4.0 adoption. While GDP and jobs growth in general remain strong, manufacturers’ business confidence slipped in the fourth quarter due to concerns over workforce talent availability, raw material costs, and the trade war, according to the NAM’s fourth quarter Manufacturers’ Outlook survey. Sales and production growth expectations also declined in the survey. The big question regarding M4.0 to be answered in coming months is whether the uncertainty will increase. If it does, will the result be less focus on M4.0 transformations, as uncertainty fosters a circle-the-wagons mentality, or more, as manufacturers perceive an opportunity to identify new competitive advantage?
An Epiphany Looms Over Manufacturing Culture …
Whatever the pace, as M4.0 continues to proceed and evolve there will be a growing recognition and understanding that M4.0 is far more than a technological revolution in manufacturing. Manufacturing executives will grapple with deep-rooted issues around culture, organizational models, and leadership acumen for the digital age as they attempt to move beyond initial projects into more corporate-wide initiatives. These factors will compel a hard and honest look in the mirror about business vision and models for a future that many may conclude will be radically different than the past.
Even as Major Technological Change is in the Works
As manufacturers deal with a host of cultural, people, and organizational issues on their journey to M4.0, they are also poised to make a host of adoption and implementation decisions about new and advanced technologies in 2019 that will shape their companies for many years into the future. In the IT space, expect AI, cognitive computing, data analytics software, and both augmented and virtual reality systems to lead buying decisions this year. In the production arena, the Industrial Internet of Things, machine learning, collaborative robots, and, yes, blockchain technology will top the shopping lists of many manufacturers.
The Factory Will Become More Analytical
The strong appeal of artificial intelligence and machine learning technologies will play out in several ways in 2019. Initially focused on predictive maintenance, production efficiencies, and quality improvements, rising familiarity with AI analytics approaches will also encourage companies to test out broader AI analytical overlays across both existing and new databases, data streams, and factory networks, encompassing multiple assets, from machines, parts, products, and processes, to energy sources, people, and even factory buildings themselves. Such moves, however, will fuel the debate about how much control can be, or should be, relinquished to AI-driven decision-making systems on the factory floor and the potential impact this may have on human staffing levels in the future.
The Next Stage of M4.0 Value Is in the Wings
The new year promises to be pivotal for manufacturing companies as they embark on the next stage of their M4.0 digital journey. Building on their growing recognition of M4.0 as a strategic industrial imperative, expect a sharp increase in the active deployment of real-life pilot projects that clearly prove how multiple new technologies and approaches can deliver practical, measurable value to the company and its business competitiveness. As traditional functional silos are replaced by more collaborative structures, and data is increasingly democratized so it can be shared and used more widely across the organization, both front-line workers and leadership teams will begin to seek ways to scale proven pilot projects to optimize key data assets, internal and external integration, and enterprise-wide digitalization.
Humans and Machines Will Get More in Synch With Each Other
Human-machine interaction is the origin of nearly every activity on the factory floor. While automation is one solution that manufacturers are turning to in the face of a burgeoning number of unfilled jobs, this year will also see growth in development and application of technologies that make machines more intuitive and closer to operating like every day electronic devices, with features like voice assistance, motion control, and facial recognition. In addition to making machines easier to operate, therefore reducing the amount of training required to operate them, these updates are also necessary to fully realize the potential of a digital, connected shop floor and the benefits of Manufacturing 4.0.
A Strategic Approach to Data Will Separate Winners from Losers
The data tsunami engulfing most companies these days will give way to a growing realization that the data, rather than being looked at just for tactical advantage, can be a profound agent of change to spur innovation, develop new products, run operations, and satisfy customers. Thinking about data as a critical strategic enterprise asset will lead more manufacturing companies to establish Chief Data Officer roles responsible for automating data collection, setting up data infrastructures, acquiring tools, and conducting data mining and analysis. Companies that become data leaders will enjoy a distinct advantage over those who find themselves flailing about in a sea of ones and zeros.
Growing Digital Requirements Will Re-Cast the Workforce Issue
Manufacturing company HR departments will attempt to make headway this year is dealing with an emerging dimension to the workforce crisis. The industry has been struggling with the workforce issue for many years, a problem that has largely been defined by difficulty in finding qualified workers and the need to replace retiring baby boomers. But now a third threat is coming more sharply into view – a need to understand and find talent to fill new functions and roles associated with the digital model of doing business. Going way beyond a current need for data scientists and analysts, researchers have identified more than 100 digital functions and roles that manufacturing companies will have to understand and find talent to fill, including oddly-sounding titles such as Enterprise Digital Ethicist, Digital Thread Engineer, and Digital Manufacturing Biomimicry Specialist. The war for such talent – which is cross-industry in nature – is on!
New Challenges Ahead for M4.0 Supply Chain Ecosystems
As companies seek to multiply the value of their M4.0 investments by extending advanced internal M4.0 platforms and digital networks beyond their own enterprises, they are set to encounter an increasing number of potential barriers to progress across their partnership and supply networks in the year ahead. Many companies are finding that there supply chain partners are at different stages of M4.0 maturity, using potentially incompatible IoT networks in different industrial sectors, different analytical platforms, and with different cybersecurity approaches in place. As a result, creating a consistent, unified, and secure data-driven M4.0 ecosystem is likely to be fraught with frustration and complexity. Major players may try to create and enforce more standard approaches, but latency and legacy transformation takes time, and could become a significant hindrance to the rate of wide-scale M4.0 implementation over the next 12 months.
A Wake-Up Call is Coming for U.S. Companies on M4.0 Competitiveness
While the United States has been by far the world’s innovative leader in IT and digital technology over the last few decades, it’s a different story on the factory floor. Observers say that U.S. manufacturers lag their international counterparts in countries such as Germany when it comes to M4.0 adoption. Additionally, China has set its sights on M4.0 and should be considered a major competitor in the race for M4.0 dominance. While many U.S. manufacturers are still trying to understand both the concept and the ROI benefits of M4.0, global competitors are moving ahead and already realizing some of the benefits. MLC members will have an opportunity to gauge where they stand with M4.0 in relation to international competitors during their visit to the Hannover Fair in Germany in April.