Close this search box.
Close this search box.

Getting More for Less in Modern Manufacturing

Manufacturing has been through radical change as a result of globalization sharply increasing competition. But that doesn’t mean the sector can stand still.

Getting more for less in modern manufacturing
Everyone always wants more for less: individuals, companies and governments. It’s the defining challenge facing businesses as they try to stay competitive.

Manufacturing, in particular, has been through radical change as a result of globalization sharply increasing competition.

But that doesn’t mean the sector can now stand still. Far from it. The challenges and the changes keep coming.

Smart factories
Increasing factory automation is an obvious way to reduce costs while maintaining quality.
The Internet of Things, wearable technologies, robotics and Artificial Intelligence are just some of the technologies transforming traditional factories into ‘smart’ ones.

This will ultimately enable companies to make the most of their resources and produce higher-quality goods more efficiently.

A survey by Capgemini found that smart factories will enable a seven-fold increase in overall productivity by 2022, with capital and inventory costs expected to reduce 12-fold compared to 1990.

The advent of smart factory technologies will also speed up production and help manufacturers respond more quickly to changing market needs.

Typically, factories are set up for long, high-volume production runs. Today, it’s critical to be profitable at lower batch numbers and over much shorter product life cycles and have the ability to rapidly swap production to new products as needed.

But Capgemini’s analysis shows that only 6% of manufacturers are ‘digital masters.’ Most of the businesses surveyed – more than 75% – fell into the ‘beginners’ category when it came to converting their production sites to smart factories.

Clearly there is a lot more work to be done.

Shared goals
Mention the ‘sharing economy’, and most people will think of companies such as Airbnb and Uber.

But the need to share resources rather than control the entire value chain is not a new concept. Mobile service providers have been sharing network infrastructure for several years, enabling them to extend their coverage at a reduced cost and risk.

The ‘shared factory’ takes this idea one step further. Mazda and Toyota, are exploring the idea by building a joint factory in the U.S.

Beyond sharing cost and risk, this move will give Mazda its first US factory, reducing exposure to tax and currency risks, while Toyota will be able to up production on some of its most popular vehicles. The companies have taken a stake in each other’s businesses to reinforce their partnership.

In the light of the high capital costs associated with manufacturing, and the continued pressure the sector is under, this kind of collaboration is likely to become more common.

Innovating step-by-step
Collaboration is also at the heart of another trend in manufacturing: the use of incremental or ‘agile’ approaches to innovation.

One of these is the Japanese business philosophy of ‘kaizen’, which favors step-by-step rather than abrupt, disruptive innovation. It encourages a culture where everyone is involved in jointly improving the organization by suggesting incremental changes to reduce costs, boost productivity or develop product features.

This is diametrically opposed to the ‘big bang’ approach many companies have often resorted to, ringfencing teams and resources for a set time to bring about one-off innovations. Instead, it is all about accumulating changes and adapting over time, with obvious practical and cost benefits over traditional innovation drives.

Digitalization gives those practicing kaizen plenty of new opportunities. A wide range of data sources from across the organization can be mined to identify ‘gaps’ where improvements are needed.

Additive technologies come to the fore
Another game-changer in incremental innovation in manufacturing is 3D printing, or additive technology.

With standard manufacturing techniques, it is expensive and time-consuming to produce prototypes of new products or parts. Using additive technology, it takes days rather than months to move a design from the drawing board to the real world, at a much-reduced cost.

As 3D printing evolves, additive technology will also increasingly replace traditional production methods such as casting.

Across the Mitsubishi Heavy Industries Group, for example, 3D printing is already used to produce components for turbines, turbochargers and aviation technologies, and has been critical in improving fuel efficiencies in these products.

A new generation of manufacturing workers
As these and other transformative technologies gain ground, the question is how they will affect the workforce.

The World Economic Forum predicts a loss of five million jobs by 2020 due to automation and digitalization. At the same time experts agree that the need for highly skilled workers who can use new technologies will grow.

Automation and digitalization promise an answer to many of manufacturing’s big questions, by helping the sector realize ‘more for less’. But this will only be possible if the industry can retain workers and enable them to switch to more skilled roles, overseeing the use of AI, robots and additive production methods.

The challenge for manufacturing over the next decade will be to protect and grow technical skills, expertise and knowledge so it can continue to innovate and reinvent itself.

This article originally appeared on SPECTRA, the online media powered by Mitsubishi Heavy Industries Group.


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.