The Digital Manufacturing Revolution: What Companies Need to do to Catch Up

Q: What are these key areas that the U.S. is behind in, and why are U.S. manufacturers falling behind?
A: The answer to this question is directly related to the creation of the Digital Manufacturing and Design Innovation Institute (DMDII), a signature effort of UI LABS. You may know that DMDII is one of the seven Institutes within the National Network for Manufacturing Innovation (NNMI). In 2011, a number of esteemed advisors to President Obama in technology and business pointed out the flagging position of the U.S. in manufacturing innovation compared to other nations—a result not just of the outsourcing of low-wage jobs but also a decline in research and development activity and in the demand for high-tech jobs for skilled workers.

The recommendation put forth to the president was to establish the NNMI to support pre-competitive research, development, and demonstration that would benefit all U.S. manufacturers. Within that network, DMDII focuses on digital manufacturing: using digital technologies to transform the way parts, components, and systems are designed and manufactured by using data more efficiently and effectively at every step of the process.

Q: Are there specific CEO leadership skills required for leading a digital transformation?
A: It comes back to a forward-looking perspective and an understanding that leading or even keeping pace with the global manufacturing sector requires an investment in the future. We have had the privilege of working with manufacturers that are true visionaries in their field, and even they realize that the type of transformation we are seeking for the U.S. supply chain requires a coordinated effort among university, industry and government partners.

Q: Mid-market manufacturers don’t have the same resources that larger firms do. How can the digital revolution help them catch up and remain competitive, even leapfrogging their competition?
A: Reaching small- and medium-sized enterprises (SMEs) is a critical part of DMDII’s mandate. We are accomplishing this through multiple avenues. One is the establishment of pilot “DMDII chapters” in Rockford and the Quad Cities, expanding the reach of the institute to these economic hubs and helping to digitize the supply chain through direct outreach to SMEs within these communities. We expect to launch additional chapters to expand our geographic reach. The other avenue is, fittingly, digital in nature: an open-source, online platform called the Digital Manufacturing Commons (DMC). Many of the DMDII projects in progress now will result in tools and applications that will be made available to users of the DMC, leading to the democratization of these resources for manufacturers large and small.

One of the first steps in remaining competitive for a mid-market firm is to plan ahead and make strategic investments in the future of the company. We have over 100 SMEs among our 180+ DMDII members—companies that have taken a first step down this road.

Q: Are there common mistakes or pitfalls that companies should be aware of?
A: One of our greatest challenges is getting management to pay attention to and buy in to digital technologies and understand how to apply these technologies to their businesses. Understandably, the leadership of many smaller companies is focused on the day-to-day operations of the business: namely, filling orders and making payroll. There is a risk in making an investment outside of these core activities, and in trying something novel. Part of what DMDII does is to establish a “safe space” for risk-taking and to take a modest investment and leverage it with the resources of an entire consortium.

Q: Is there a minimum investment needed? And how long will it take for companies to see their ROI?
A: The Illinois Manufacturing Lab (IML), a program run by UI LABS and the University of Illinois, has shown that even modest investments can yield an impressive ROI. A case study completed with a company called Tek Pak took an investment of less than $10,000 to analyze its machining processes with software applications and resulted in immediate efficiency gains valued at $72,000 per year.

Katie Kuehner-Hebert
Katie Kuehner-Hebert has more than two decades of experience writing about corporate, financial and industry-specific issues. She is based in Running Springs, Calif.