U.S. CEOs Finally Begin to Push the ‘Smart Manufacturing’ Edge

But while the United States has become more competitive as a manufacturing base for many reasons, one arena where many of the nation’s advantages should come together has been missing from the list of burgeoning sectors: ‘smart manufacturing’, which offers speed and flexibility through digital automation.

Expect that to change. Harnessing smart-manufacturing capabilities “makes us more competitive,” says Hal Sirkin, Chicago-based senior partner of the Boston Consulting Group and co-author of The U.S. Manufacturing Renaissance: How Shifting Global Economics Are Creating an American Comeback. “We can compete against less-automated, more-labor-intensive countries. The more we can use these techniques, the more competitive we become. The jobs that left the U.S. will come back, but in different forms and different ways.”

Indeed, the United States is enjoying a favorable new shift in its cost position that has allowed it to rise to No. 2 in manufacturing competitiveness, behind China, according to Sirkin’s new report. And experts believe American manufacturers increasingly will leverage this and other nascent advantages most effectively through smart manufacturing.

“Strengths we still have in our favor in the U.S. to a great degree include intellectual property, talent, universities and our education system,” says Bob McCutcheon, U.S. industrial-products leader at PwC. “We still have a strongly innovative culture when it comes to technology—an advantage we can use not only in the technology sector and on the consumer-products side of the economy, but in the manufacturing economy as well.”

Pressing the digital envelope “can be a differentiator for North American manufacturing,” says Russ Rasmus, practice leader for global manufacturing for Accenture Strategy. “It’s something Americans can bring to the manufacturing agenda that we haven’t been able to until the last five years.”

But Thomas Kull, professor at Arizona State University, allowed that smart manufacturing “is laying down a challenge to U.S. creativity and initiative. The race to make the most from these technologies is on. Fortunately, the United States has a nice track record for ingenuity. Unfortunately, we also have a tendency toward complacency.”

Smart manufacturing already has helped some iconic American manufacturers such as Harley-Davidson compete more effectively. And the consensus is that other American companies and, collectively, the U.S. manufacturing base as a whole, can best press its budding smart-manufacturing edge in a handful of ways.

One is advanced technologies such as 3D printing, where local “additive manufacturing” can create massive advantages in the supply chain. Another is “augmented reality,” which uses digital imaging to help workers put things together—and may come in especially handy for the digital natives of the Millennial generation, Pradeep Amladi, vice president of manufacturing for SAP said.

A third area, McCutcheon adds, is use of sensors and smart automation to fine-tune the manufacturing process. And a fourth arena is big data and analytics, which have become the biggest recipient of IT investments by manufacturers these days. “The emphasis,” Rasmus says, “is on getting information off the manufacturing floor to use in decision-making.”

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