ELEVEN INSIGHTS INTO THE FUTURE OF MANUFACTURING

ELEVEN INSIGHTS INTO THE FUTURE OF MANUFACTURING +1 714 996 5302 www.parsec-corp.com 180 N Riverview Drive No. 300 Anaheim, CA 92808, United States TM Cr y s t a l Bal l of Manufac tur ing2 From the onset of the Industrial Revolution to today’s technology driven economy, manufacturing has provided jobs, spurred growth, and enabled consumers to enjoy a higher quality of life. While many factors affect the strength of manufacturing, it is often these same factors that are a key driving force behind global commerce. According to the National Association of Manufacturers (NAM), manufacturers today contribute over $2.17 trillion to the U.S. economy1. While some may think of manufacturing as strictly related to machinery and assembly lines, it is interesting to note that driving productivity and innovation are two of its main contributions. Increases in productivity without associated increases in costs lead to improved quality of living for many more people around the globe. One could argue that modern day manufacturing is responsible for a significant portion of the innovation in the world – with many of the products and goods the consuming public enjoys being the result of advanced techniques applied to manufacturing. Cr y s t a l Bal l of Manufac tur ing 3 Like most businesses, manufacturing is subject to cycles of stagnation and acceleration. Historically, improved manufacturing has led to the growth of the service sector, which in turn has led to a diminished manufacturing base. Regardless, given the important role that manufacturing plays, it would be interesting to look at what we can expect in the next few years. ON THE HORIZON Cr y s t a l Bal l of Manufac tur ing4 Improved Visibility We will have the systems and diagnostic tools available to dramatically increase visibility and communications among various components of the manufacturing value stream. Think, industrial internet of things (IIoT). Increased Flexibility Euromonitor International outlines ten global consumer trends, but chief among them is a demand for more choice and variety2. Manufacturers will no longer be able to produce a “one size fits all” product and hope that the buying public will respond. Consumer input will be required, and processes will have to be adaptable in order to quickly respond to changes in demand. Environmental Sensitivities Pressures related to climate issues, pollution, and finite natural resources will force manufacturers to increase their environmental mindfulness. More green processes will be developed to operate with less waste and pollution. Higher Quality Manufacturers will be pushed to produce higher quality products at lower cost. As the global markets expand, consumers will have more choices and the ability to buy goods that were previously out of their reach. Producers with better products will thrive. Local Sourcing As demand for goods proliferates around the world, local sourcing will move into the spotlight. It will matter even more to have local production – especially for products with short shelf lives. Local manufacturing will eliminate many logistics challenges and greatly lower transportation costs. Shift in Labor Resources As technology advances, the demand for low-skill production workers will decrease. There will be less need for hands-on labor, but an increase in demand for knowledge workers. Manufacturers will need to plan for a skills transition in their workforce. Cr y s t a l Bal l of Manufac tur ing 5 Smart Manufacturing Using better visibility, connected systems, predictive analytics, and more efficient operations will lead to the emergence of smart manufacturing: sensitive to consumer demand, environmentally aware, innovative, adaptable, less susceptible to wild swings, and ultimately more profitable. Streamlined Processes The time to research and develop products and bring them to market will decrease even more. Better processes and lowered cost of manufacturing will lead to the availability of higher quality products in the global market – in larger quantities – in ways that were not previously economically viable. Repurposing and Reinventing Advanced technology, better insights, and smarter manufacturing processes will lead to rethinking, reinventing, and repurposing existing products for new applications. For example, consider the mobile phone and how its evolution into a smart device has completely altered the computing landscape. More Transparency Regulatory requirements will continue to become more stringent while the impact of violation and noncompliance will become prohibitively expensive. However, improved visibility together with enhanced process capability and maturity will make the needed transparency possible – both for internal purposes and regulatory agencies to ensure good manufacturing practices. Increased Competitiveness Technology will act as a catalyst to level the playing field. More manufacturers will be able to compete for market share in progressively more sophisticated goods that may currently be out of their reach. This will fuel competitiveness that will drive both innovation and productivity. Advanced technology, better insights, and smarter manufacturing processes will lead to rethinking, reinventing, and repurposing existing products for new applications ROLE OF SOFTWARE IN THE FUTURE OF MANUFACTURING To remain relevant manufacturers must be able to get more out of their capital assets. A very effective approach to getting this done is to leverage purpose-designed operations management software. This is already happening at a rapid pace and will only accelerate. Software will be a main component of manufacturing moving forward. Advances in software will allow manufacturers to be more agile, more flexible, and more competitive. Because information is inherent in this process, manufacturers will rely more on intelligence-based decision making throughout the supply chain – and will be ready to deliver new products more quickly with significantly better life cycle management. Taking into consideration the expected trends just reviewed, software will play an even more critical role in the future of manufacturing. Cr y s t a l Bal l of Manufac tur ing6 Cr y s t a l Bal l of Manufac tur ing 7 Cr y s t a l Bal l of Manufac tur ing8 Many of the trends discussed will present challenges to those manufacturers who cannot adapt quickly and maintain the necessary pace to remain relevant. More ubiquitous technologies, larger global markets, and the ever-present appetite for newer and better products will drive manufacturing competitiveness to new heights. CHALLENGES AHEAD Cr y s t a l Bal l of Manufac tur ing 9 Growth will affect the availability of expert labor pools. Geopolitical events will impact trade balances. Availability of resources will influence regional industrial hubs. Manufacturing activities will inextricably be tied to the necessary services to provide better experiences for the consumers. Environmental and safety regulations will impact the cost of manufactured goods. A proper mix of human resources, knowhow, and technology will be needed to meet the challenges that lie ahead. It is a complex journey where manufacturers need to commit to purposeful innovation and agility to regularly adjust, repurpose, and invent. Cr y s t a l Bal l of Manufac tur ing10 Cr y s t a l Bal l of Manufac tur ing 11 References 1 http://www.nam.org/Newsroom/Top-20-Facts-About-Manufacturing/ 2 http://www.euromonitor.com/10-global-consumer-trends-for-the-next-five-years/report About Parsec Parsec is the developer of TrakSYS™, a proven operations management software application and solution platform designed to significantly improve manufacturing processes. Parsec is committed to providing best-in-class products and solutions to our worldwide community of clients to assist them in optimizing their manufacturing operations. There are thousands of TrakSYS™ licenses in use around the globe in a wide variety of Industries. TrakSYS™ helps manufacturers to maximize asset utilization and efficiency, increase capacity with no new capital equipment, reduce production costs, decrease lead time, and improve profitability. For more information about Parsec and TrakSYS™ please visit the corporate website at www.parsec-corp.com.