What Every Company Can Learn from the Best Smart Manufacturers

To manage that critically important supply chain, Di Perna has built a Star Wars-like control room where deliveries from every supplier are monitored on large screens. It also has merged its manufacturing, engineering and supply-chain functions into one 10,000-person organization under Di Perna, rather than allowing them to remain siloed. “There is a lot of power in creating that structure,” Di Perna says, because, in part, it eliminates the problem of engineers designing things that cannot be manufactured.

Altogether, Pratt is going to triple the number of engines it makes a year by 2020. Welcome to the Next Generation of American manufacturing. Different experts use different catchphrases to describe the transformation that is under way: Agile. Smart. Advanced. Industry 4.0. The Internet of Things. Lean manufacturing on steroids. What they all refer to is a dramatic expansion in the capture of data, improved software that links machines and systems that have never before been linked, advanced robotics, sensors, new materials and even the early stages of three-dimensional additive manufacturing. The combination of these techniques promises to improve productivity, reduce costs and cut waste, while allowing for much more flexibility and mass customization of products.

One key is more powerful software, the connective tissue that allows machines to change their functions and connect into a more coherent whole. “The cost of a programmable logic controller has dropped in the past 15 years to about 15 percent of what it used to cost,” says Hal Sirkin, a Chicago-based senior partner of the Boston Consulting Group and one of the nation’s foremost experts on manufacturing. “You can basically buy automation cheaper.” He is co-author of The U.S. Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback.

BEYOND LEAN
The combined power of the new technologies—and the need for higher-skilled labor to manage them—is just beginning to hit American manufacturers. It shapes up as the most sweeping change in American manufacturing since the auto industry began imitating Toyota Motors’ lean production system a quarter century ago. “The single biggest trend is that the pace of change is accelerating,” says Tom Comstock, vice president DELMIA strategy and digital offers and user experiences at Dassault Systémes, based in Long Beach, Calif., a leading provider of software for design and manufacturing.

“Manufacturing used to be a lagging set of industries. They didn’t care about being on the forefront of technology. Now, we’re seeing a lot more emphasis on improving the manufacturing and the systems involved.”