It’s more important than ever for manufacturing companies to be ahead of the digital curve to continue innovating and stay ahead of their competition. Here are 5 megatrends manufacturers should keep in mind for the foreseeable future:
new technology and connecting data will drive enterprise success
Big data and IoT are becoming increasingly critical in providing a new foundation for the new wave of manufacturing – particularly to apply AI to predictive analytics. Being an early adopter in technology has its payoffs – according to the Harvard Business Review (HBR) on speeding up digital transformation, digital leaders earn 49 percent better gross margins, 45 percent better earnings and a 57 percent better net income than organizations who are slower to adopt technology. Companies should be constantly aware of how new technologies can enhance their businesses, because the reality is predictive analytics can only be a true game-changer when enterprise data is connected across the end-to-end value chain.
Regional production will become an
industry standard on a global level
Gartner predicts by 2021, 20 percent of the world’s top 100 consumer goods companies will use 3D printing to create custom products. This trend will result in mass production, traditionally handled by a central authority, becoming more focused on regional production and customization. This will allow customers to order extremely specific products, such as a pair of red shoes, for next-day shipping. This regional model and the previously mentioned new technologies will also result in more regulation and pressure to drive energy and sustainability projects.
The workforce of
the future will possess an entirely new set of skills
By 2025, 75 percent of the workforce will be millennials – an incredible number.1 These workers will bring a new mindset and take on skills barely (if at all) in use today. While an operator today pushes a button on a machine and watches it run, Industry 4.0 requires operators to use multiple technical skills – working across multiple machines and monitoring robots to ensure operations perform as planned. In addition, the workforce will need to learn how to use the predictive analytics from connected data to prevent unplanned losses. It’s critical for companies today to begin adapting to what will ultimately be a completely different workforce and way of working with predictive analytics in just a few years.
lean operating systems will become the most effective means of dealing with manufacturing issues
Predictive Lean Operating Systems will become the norm. It’s clear Lean Operating Systems drive productivity at all levels of the business through continuous improvement. The problem with traditional Lean Operating Systems is the root cause analysis and continuous improvement happens after an unplanned variance occurs e.g. a missed delivery, unplanned machine downtime, poor quality, and losses in earned hours. With connected enterprise data and AI supported predictive analytics Lean Operating Systems can and will predict variances before they happen.
As an example, take a Hitachi customer who converts large steel products. The company historically loss a large portion of their capacity to setups due to wrong raw material being fed into the process. Now with connected data from the enterprise scheduling system and operational data from the process PLCs, predictive analytics are applied predicting wrong raw material. With predictive lean operating systems, these three hours of frustration become a quick and painless few seconds of predictive data analysis with an alert sent to the operator predicting the problem and preventing the productivity loss.
Connectivity will have significant
impacts on revenue and service models
The key to driving new revenue streams will be how companies leverage value chain connectivity to impact various functions of their business. Connected supply chains and improved product quality through connected innovation will be crucial factors in completely overhauling how manufacturing companies do business, allowing them to generate all kinds of new models to benefit their bottom line.
Hitachi has made the connectivity leap with many of their products to provide field monitoring services to predict asset performance and maintenance needs. For example, instead of selling high speed trains Hitachi now leases them and ensures 100% uptime creating value to the life cycle of the asset. At other customers Hitachi will sensor their products, connect the data and build the predictive analytics to monitor the field performance to increase product uptime and reduce overall cost of maintenance to the end customer. These new revenue streams can be a complete game changer for allowing new growth.
Exploring 5 Megatrends
New Service Models
Regional Localized Production
Predictive Lean Operating Systems
Recognizing these trends and building them into strategic planning is critical in the digital age. As evidenced by the HBR research, companies who embrace connected data and predictive analytics are already seeing better overall performance relative to their competition. As this new technology and data integration is applied to regional manufacturing and Lean Operating Systems, performance will continue to improve along with new service and revenue models becoming a shifting reality.