Despite market uncertainty, manufacturers must weather the risk that comes with embracing new technologies.
The sting of 2001 and 2008 is still too painful for some industrial manufacturing companies to forget. Back then, global economic expansion enticed industrial manufacturers to invest in new equipment and technologies designed to improve factory performance for themselves and their customers. When markets unexpectedly crashed, they paid a steep price for having bought at the top of the cycle. The payoff took years to realize, if it appeared at all. This recollection colors the tentative steps that many industrial manufacturing companies are taking today. Indeed, economic growth, although occurring, isn’t particularly robust. It’s anybody’s guess whether China is heading for a soft landing or a renewed takeoff. The Eurozone’s future and the prospects for Brazil, India, and Russia are impossible to read. It’s tempting to believe that a boardroom version of “the prevent defense” — avoiding possible big losses by taking few chances — may be the best strategy.
But that conclusion is a false choice. Manufacturing may be facing some headwinds, but it’s undeniably in the midst of a technological renaissance that is transforming the look, systems, and processes of the modern factory. Despite the risks — and despite recent history — industrial manufacturing companies cannot afford to ignore these advances. By embracing them now, they can improve productivity in their own plants, compete against rivals, and maintain an edge with customers who are seeking their own gains from innovation. Rather than fearing the past, industrial manufacturing executives should be asking these critical questions: At a time of rapid change and limited upside, which technology investments will have the biggest positive impact on my business? And what is the value potential, return on investment, and risk of investing in these technologies?
Given today’s leading-edge capabilities, it’s reasonable to envision — and prepare for — a data-driven factory of the future where all internal and external activities are connected through the same information platform. Customers, designers, and operators will share information on everything from initial concepts, to installation, to performance feedback throughout the life cycle. Operators will access materials on demand, collaborate with robots to use them safely and ergonomically, and rely on virtual work instructions presented at the point of use. Assembly lines will output highly personalized products, sometimes in a lot size of one, that contain zero defects.