Trends and Predictions 2020: Manufacturing

Stephen DeAngelis

January 29, 2020

Dark clouds are gathering on the horizon as the global economy appears headed for a downturn. Thanks to the Trump administration’s trade wars, IDC analysts note, “Costs throughout the manufacturing value chain are seemingly impacted every day. The uncertainty appears likely to continue into 2020, and thus manufacturers’ optimism has experienced a noteworthy setback. … The coming year promises to be an ever-changing environment for manufacturers as they try to regain their footing amidst continued volatility in costs and policy decisions.”[1] The analysts caution against taking a wait-and-see attitude. They write, “While the potential for uncertainty may continue for the foreseeable future, manufacturing leaders should increase resilience in their operations and double down on the core of their portfolios.”

They believe resilience can be enhanced by building “digital muscle.” They explain, “Levers to support this include building ‘digital muscle’ across areas like the supply chain, mobilizing partnerships within their ecosystem to drive targeted business goals, and leaning into corporate social responsibility. Manufacturing leaders can begin by examining current supply networks and considering how they could build additional agility throughout, including adding digital technologies that increase visibility and transparency to drive the ability to flex production and resources as necessary.” Deloitte analysts assert one factor holding back manufacturers is a severe labor shortage. An economic slowdown may shrink the labor gap, but it won’t eliminate it. The labor shortage has motivated many manufacturers to double down on automation strategies and press forward with other Industry 4.0 technologies. Below are a few manufacturing trends and predictions identified by subject matter experts.

Manufacturing trends

Trend 1. Online and on-demand. Filemon Schoffer (@filemonschoffer), co-founder and CCO of 3D Hubs, notes, “With the help of digital platforms that facilitate the entire process through a network of distributed partners, online manufacturers have been experimenting with new materials and innovative business models over the past year. By creating an ecosystem of quality manufacturers, all engineers have to do to get parts made is upload their computer-assisted designs (CADs), specifying material, surface finish, threaded holes, tolerances and lead time to the cloud. The platform will then confirm the design, and a member of the distributed network with manufacturing capabilities for the specific part will take on the project. … While this industry is still in its infancy, the potential it unlocks for engineers is huge.”[2]

Trend 2. Wearable technology. The adoption of wearable technologies has been relatively slow; however, Justin A. Metzger (@JustinAMetzger), sees an acceleration in the adoption of wearable technologies. He writes, “The rise of the Internet of Things (IoT) in industrial applications has given way to the increased prevalence of wearable technology in the manufacturing industry. Manufacturers of all types and sizes are increasingly looking into — and investing in — wearable devices with different sensors that can be used by their workforce.”[3]

Trend 3. Artificial intelligence and machine learning. Analysts at Linchpin SEO note, “Manufacturing is such a massive industry that it can take time for changes to be implemented across the board, and the increased use of AI and machine learning will be no different. However, while the progress might be slow, it’s only going to go in one direction, and that’s towards the ubiquitous use of these technologies. In such a complex industry, AI, machine learning, and advanced analytics offer so many opportunities to improve efficiency and increase profit margins that they simply can’t be ignored. The more complexities your company faces, the greater the opportunity to use these technologies to get that competitive edge you need to succeed. These technologies aren’t just limited to one area of your business; they can improve your performance in every area. Whether it’s on the factory floor, in your supply chain, or in your customer relations, there are numerous ways machine learning, AI and advanced analytics can improve your business practices.”[4]

Trend 4. Predictive Everything. One of the benefits of cognitive technologies is their ability to make predictions. Daniel Newman (@danielnewmanUV), principal analyst of Futurum Research and CEO of Broadsuite Media Group, reports, “Research shows a single hour of downtime can equate to $100,000 in losses in a manufacturing environment. Using data, AI, and predictive analytics, some say manufacturers can reduce planned outages by 50%. … Predictive analytics help companies better understand how their machines work, and why they fail, which allows them to prevent those failures altogether. Going forward: not just a nice to have, but a must-have for manufacturing environments.”[5]

Trend 5. Adoption of 5G telecommunications. Daniels writes, “2020 is the year we are likely to see the much talked about 5G to be rolled out on a much larger scale, and it is expected to have a big impact on smart manufacturing. 5G will allow manufacturers to improve latency and enable real-time communication on a scale not seen before.” Newman adds, “With 5G, manufacturers can begin to increase their use of sensor, cloud, centralized tracking, quality inspection, etc., forming an ‘ecosystem’ of smart manufacturing. Yes, we may see a growing disparity between 5G have and have-nots in 2020 (much like IoT). But it will undoubtedly play a larger role in smart manufacturing moving forward.”

Manufacturing predictions

Prediction 1. Manufacturers will increasingly adopt integrated platforms. Louis Columbus (@LouisColumbus), a Principal at IQMS, predicts, “Frustrated with the delays of relying on multiple systems for accounting and production reports, manufacturers will adopt a single, integrated system that tells them the immediate impact of production decisions on their profitability. In 2020, more manufacturers will transition from separate accounting, supply chain, ERP and MES systems to a common platform. Factors driving this change include the following: manufacturers are looking to become more efficient at short-notice productions runs; the pressure to excel as a supplier who can exceed quality benchmarks has never been greater, and the need to track shop floor decisions’ impacts on financial performance are now must-have insights they need to compete.”[6]

Prediction 2. Robots continue to rise. Columbus predicts, “Robots get installed and used for diverse, repetitive tasks on the shop floor ranging from end-of-arm assembly, labeling, pick and place, packaging, stacking, and palletizing to mitigate recurring labor shortages. 29% of mid-tier North American manufacturers said investing in robotics is their first priority in 2020. Plastics extrusion manufacturers are investing in robotics because they can’t find enough workers for shifts. Geographically remote manufacturers are relying on robotics to scale up fast and take larger customer production jobs they would otherwise pass on due to lack of labor.”

Prediction 3. Sustainability becomes a manufacturing asset. According to Columbus, “Manufacturers [will] learn how to turn sustainability initiatives into a lean, competitive advantage, reducing costs, and improving their industry reputations for being environmentally friendly. … Manufacturers will acquire more energy-efficient production equipment such as electric vs hydraulic modeling machines. Sustainability is manufacturing’s greatest inflection point of 2020.”

Prediction 4. Manufacturers will be more data-driven. Columbus predicts, “Manufacturers will be more data-driven in 2020, adopting predictive analytics to troubleshoot problems, perform root cause analysis, improve product quality, and control per-unit costs. Searching for new ways to gain production efficiency across their shop floors and minimize the impact of higher material costs, labor shortages and tightening regulatory costs and reporting, manufacturers will turn to predictive analytics more in 2020 than in the past.” Newman adds, “With so many global variables at hand, predictive analytics can help manufacturers make better, smarter, faster, and less risky decisions about everything from machine maintenance to supply chain optimization, all of which impacts customer experience; from the quality of goods produced to when customers receive orders.”

Prediction 5. Slow Industry 4.0 adoption. Analysts from Linchpin SEO note, “This bullet point has been conveyed in many predictions in the past few years. Undoubtedly, it will continue to appear in the year 2020, and even after that. Technology that is empowering modern manufacturing is slowly becoming more complex and is tremendously gaining wider adoption. Early adopters of this technology are already providing value for their clients in ways they didn’t before. … A full industry 4.0 capability hasn’t been fully realized in most organizations. A change is expected, especially with technologies that will see this become a reality and fully functional even in the most Luddite-filled operations.”[7]

Concluding thoughts

Metzger concludes, “The fourth Industrial Revolution isn’t coming. It’s already arrived. Smart factories are becoming the norm in manufacturing, and they rely on connected devices to leverage technologies like automation, artificial intelligence, IoT and more. In addition, these devices are capable of sensing their environments and interacting with one another. As factories of the future continue to grow and develop, manufacturers need to realize that they must be able to adapt the networks that connect them — efficiently and effectively.” Analysts from Linchpin SEO add, “Technology will force manufacturers to concentrate on improving their responsiveness and agility because of changing customer demands and market conditions. Decreasing the time it takes to create, receive, schedule, and process a client’s order is becoming increasingly crucial to the average manufacturing outfit.”

Footnotes
[1] Staff, “2020 Manufacturing Industry Outlook,” Deloitte.
[2] Filemon Schoffer, “Three Digital Manufacturing Trends for 2020,” SupplyChainBrain, 9 December 2019.
[3] Justin A. Metzger, “5 Manufacturing Trends to Watch in 2020,” Association of Equipment Manufacturers, 2 January 2020.
[4] James Daniels, “5 Manufacturing Trends for 2020,” Industry Today, 7 November 2019.
[5] Daniel Newman, “Top 5 Digital Transformation Trends In Manufacturing For 2020,” Forbes, 30 September 2019.
[6] Louis Columbus, “Top 10 2020 Manufacturing Trends,” IQMS Manufacturing Blog, 9 January 2020.
[7] Staff, “Trends That Will Transform The Industrial Manufacturing Industry Outlook For 2020,” Linchpin SEO, 26 December 2019.