The smart approach to embracing the digital revolution in 2017
There is a digital revolution taking place as factories, manufacturers and their customers are becoming more connected than ever. This revolution has been labelled the transformation to Industry 4.0, a powerhouse of sensors, intercommunicating machines, artificial intelligence and advanced data analytics, redefining the manufacturing supply chain, from the way factories operate to the customer experience with the end product.
Manufacturers are striving to reach a higher level of integration and connectivity in digital manufacturing as the industry is moving from 'push' to 'pull' business models, from unified to modular products and services with customers and data at the centre. The prospect of a cyber-physical future is an exciting one, where manufactures can digitally design a prototype and immediately print it out; where performance optimisation will be aided by sensors attached to a machine, delivering live intelligence on the temperature, output and performance level of the machine. The lines that used to separate the physical and digital are becoming increasingly blurred and this offers clear benefits for manufacturers. But it also changes the nature of the relationship between them, their own customers and their suppliers, too. So how manufacturers adapt to these changes will be crucial to their long term success.
The ‘digital backbone’ is at the centre of modern manufacturing and allows companies to capture data, analyse and learn from it – enabling closed loop feedback for continuous improvement across the business. This is where products remain connected to producers even after leaving the factory and so are responsive and hence anticipatory of customer feedback, such as the need for a spare part. It provides the foundation for digital manufacturing, and for the adoption of advanced manufacturing technologies both today and tomorrow.
By embracing collaborative, concurrent engineering, manufacturers can avoid costly errors, improve cost and quality, and accelerate time to market. However, the absence of a holistic digital manufacturing strategy in a company presents a challenge. Many manufacturers have invested in lots of different technologies over time, probably implemented by numerous different suppliers; what you’ve got to do is identify the discontinuities. If you can eliminate those, you can create a very strong data backbone that comes from core product engineering and runs into connected enterprise IT through the processes and systems used to create products.
The new technologies available to help create this data backbone are incredible, if not slightly daunting for the manufacturing industry. Manufacturers in all the industries we deal with are struggling to keep up with the pace of change. The evolution towards Industry 4.0 should be seen today as an industry upgrade, an aggregation of existing technologies as opposed to a complex concept too difficult to understand and adopt. The extreme hype surrounding Industry 4.0 and the insistence by many that this is an ‘all-or-nothing’ game, is creating a level of confusion and fear that may be hampering progress rather than enabling it. This perception is implying that a quantum leap
in both technology and expense is required. However, the reality is that much of the progress associated with Industry 4.0 is in fact readily accessible today and significant steps can be made by embracing ‘Industry 3.x.’ This is the progressive upgrade of the manufacturing environment: using ‘here and now’ technologies, gradually moving closer to an Industry 4.0 vision and providing business improvement opportunities that can already yield significant business value today.
The technology should be the enabler, not the destination. So manufacturers should look at their business objectives for next year and apply the technology in a way that fulfils those objectives. This is the smart approach to capitalise on the changes and opportunities that the digital revolution is bringing about.
By Richard Welford, Chief Development Officer, Tata Technologies
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IMF: Variants Can Still Hurt Manufacturing Recovery
After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022.
Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery.
Lingering Concerns Over COVID
Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high.
Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery?
IMF: Current Boom Could Falter
Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”.
Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”.
Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.