Manufacturing’s New Golden Age: Are you Ready?

In the past, identifying the cause would have entailed manual investigations and experiments taking weeks to conclude. “Now this information is available to us live, in real time, to do the troubleshooting immediately,” says Malkani. “We’re getting the right data, at the right time, in the right form to the right people, resulting in enormous
productivity improvements.”

Broadening the 4.0 Boost
While these large manufacturers have become smart factories, many small and mid-size manufacturers (SMEs) are still in elementary school. “Midsize manufacturers tend to be laggards in terms of productivity and are struggling with where to make the right investments in Industry 4.0,” says Sree Ramaswamy, a partner at the McKinsey Global Institute, where he leads the manufacturing research practice.

However, SMEs can realize tremendous benefits from investing in Industry 4.0, says Peter Guarraia, a partner at Bain & Company and senior leader of the firm’s manufacturing and global supply chain practices. “What used to be solely the provenance of big industrial concerns is now at advantageous price points for much smaller manufacturers.”

With the costs of these different technologies rapidly falling, manufacturers of any size can optimize their production processes. By turning dumb factory equipment into smart
machines, midsize manufacturers can also access and analyze the flow of digital information coursing up and down the value chain. This is not an entirely new concept. Information has always driven the process of manufacturing—the physical object created from a design drawing. By digitizing the design, the drawing can be communicated to intelligent machines across the supply chain to execute it. Meanwhile, these sources of data are connected and integrated for analytical purposes, generating more insightful manufacturing decisions.

To smarten up, Craig Dissy, who leads the Manufacturing Competitive Initiative at Deloitte, says that midsize manufacturers must recruit and hire workers with the specialized
technology and engineering skill sets required to plan, build and manage these new systems. “Today’s golden age of manufacturing requires a different set of capabilities,” says Dissy. “Midsize companies must go head-to-head with much larger competitors to successfully recruit software engineers in Silicon Valley and elsewhere that have Smart Manufacturing knowledge and expertise. If they don’t do this, their competitors will, giving their customers new product capabilities at lower costs.”

Talent recruitment isn’t the only challenge. The proprietary nature of the standards supporting many Industry 4.0 applications presents data integration issues. Manufacturing consortiums like the Smart Manufacturing Leadership Coalition are working to even the playing field. The coalition has developed an open smart manufacturing platform enabling manufacturers of all sizes to easily and cost-effectively access open source Industry 4.0 technologies.

Fortunately, time is on the side of midsize manufacturers. “If Industry 4.0 is a nine inning game, we’re in the second inning,” Guarraia says. “Digitization is and should be an evolutionary process.” He advises CEOs of midsize manufacturers to steer their companies toward a point on the horizon three to five years away. “Expect to experience a non-linear journey with mistakes and slipups along the way,” says Dissy. “The goal is to hold tight to that vision of the horizon.”

The bottom line is that manufacturing is alive and well in the U.S. “Manufacturing used to be viewed as dirty, dumb, dangerous and disappearing,” says Deborah L. Wince-Smith,
CEO of U.S. Council on Competitiveness. “Now, it’s smart, safe, sustainable and surging.”

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