The difference today is that this seismic shift in world economies has occurred at a time when we are in the grip of unprecedented technological expansion and never before seen social behavioural changes.
Never before in history have world markets, economies and people been connected as we are today.
New channels to market are being created on the back of new technologies and buyer behaviour.
What this means for manufacturers is that they must connect or disappear. Ignoring change means isolation and decline. Rather than resist change or worse, ignore it, looking at it as a “perfect storm” of the convergence of technology, demand, customer access and efficiency, each superimposing in a synergistic way offers the chance to shape the future and supercharge manufacturing businesses in ways not dreamt of a decade ago.
The combination of advanced manufacturing technologies, such as robotics and intelligent automation, blended with as yet uncharted consumer behaviours for commercialism and choice, offers a potent mix. These factors are challenging the very foundations on which manufacturing has been based for almost a century. This is the new disruptive event. Ignore the change on the horizon and the risk is total failure. Harness the opportunity and the sky is the limit.
The reality is that there is a suite of technology out there and ready, with more being developed on a daily basis. Robotics, deep learning, big data and predictive consumer analytics are part of the toolkit that designers and manufacturers can use to transform a manufacturing business. The issue is about how manufacturers use these combined technologies and how they apply them in a unique, value focused way.
Clayton Christensen, the Kim B. Clark Professor of Business Administration at the Harvard Business School is widely regarded as one of the world’s foremost experts on innovation and growth. He is the father of the disruptive innovation theories and the world’s leading business thinker and authored the pivotal work on disruptive innovation in his first book, ‘Innovator’s Dilemma’ originally published in 1997.
Christensen’s theory states that disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. And the corporate world is littered with iconic businesses that failed to understand or respond to changing consumer patterns or embrace disruptive technologies.
Think of the challenges faced by Kodak, Nokia and SAAB. And it’s not just manufacturers: entire industries, such as the hotel, music and taxi industries are being disrupted by digital solutions offered by Airbnb, iTunes and Uber.
“What we are seeing is a combination of powerful forces across automation, robotics and e-retailing, each one of which could be considered a disruptive technology in its own right, potentially combining to create a disruptive and quantum shift in manufacturing,” says John McGuire, Chief Innovation Officer.
“Success is now about capturing, deploying and engineering disparate but connected technologies in unique and specific ways to meet the particular needs of the manufacturer. Do this, and a business will harness the potential to create a sustainable and competitive advantage in the marketplace.
“At a time when the global economy is still delicately negotiating its way through recovery, the dynamics for manufacturing are once again dramatically shifting. Getting ahead of the curve must be paramount in the mind of every manufacturer who wishes to thrive and prosper.
“The dynamics that are now at play are occurring at a macro global level. They are undeniable, indisputable and unstoppable. Ignoring them is fraught with danger. However, leveraging them could provide the competitive advantage for manufacturers to succeed in the foreseeable future.”
“The intelligent co-worker, where exo-skeletal robots can assist manual labour to move objects that would have been beyond an individual’s capacity, thus replacing larger workforces, are now available.”
Global economies are recovering within a dramatically different landscape. Economies that only five years ago were described as “high cost centres” are no longer the case.
Downward salary pressure in places such as the United States, United Kingdom and Ireland, coupled with double digit wages growth in some developing countries, is having the impact of quickly swinging the pendulum of manufacturing economics.
“This cost-base swing, coupled with a legacy of technical advantage in many of the developed countries, suggests that manufacturing production is once again on the move, but this time it might be moving for good,” says John.
“For manufacturing in emerging continents such as Asia or Africa, this pendulum swing will mean the need to defend their position through a different set of drivers than they have used in the past. Traditionally, these markets benefited from low-cost labour but this differential is now rapidly diminishing. Their benefit may now be their proximity to a growing consumer base with rising incomes.
Hence, the opportunity exists to leverage off smart ways to connect with emerging middle-class consumers within these economies. Manufacturers in these markets must adapt plans for transitioning their rapidly escalating cost of labour to automation, particularly as the robotics price point continues to fall,” says John.
Ultimately, the moving of production facilities on a frequent basis as labour costs fluctuate is unsustainable. The cost of moving a large scale plant, retraining labour forces and reorganising distribution supply chains is substantial. In the long run, relocating on a regular or semi-regular basis, whenever labour costs swing, is not financially sustainable.
However, technology may provide the alternative. The adoption and deployment of advanced manufacturing techniques, including digital automation, robotics and e-manufacturing, if designed and applied correctly, can have the effect of taking the cost of labour of the equation.
Significant advances are being made in the field of robotics and the cost of deployment is reducing substantially.
The intelligent co-worker, where exoskeletal robots can assist manual labour to move objects that would have been beyond an individual’s capacity, thus replacing larger workforces, are now available.
Fully intelligent robots can be programmed to recognise specific assembly parts and can complete many assembly functions unaided and with minimal assistance and supervision.
This might sound far-fetched and something from a science fiction movie, it is not, it is reality. The da Vinci surgical system has been performing heart bypass surgery since 2009 and Robodoc has been assisting in hip replacements since 1992.
Robots are now available in mass production at reasonable price points as vacuum cleaners in our homes. Automated vehicles operate within mine sites and are used to deliver food and medicines in some hospitals. Robotic ‘layer picking’ is commonplace for inventory management and dispatch.
“If robotic solutions are available for these complex and precision tasks, the applications to manufacturing are well within reach,” says John.
The reality is that advances in computing power coupled with enhanced sensor technology for measuring forces and identifying items, along with sophisticated stepping servo motors is enabling robotics to achieve just about any task.
The mass deployment to highly specific tasks in manufacturing is now not only feasible, it is highly possible.
In addition, the cost of deploying robotic technology is very competitive. The hurdles and barriers are falling. Getting on board is the future.
Other advances, such as the advent of additive manufacturing through the use of 3D printing, has the potential to be a game changer. Traditionally, many processes in manufacturing use a combination of subtractive manufacturing and component assembly.
Raw materials will be cut, formed or shaped and machined and then assembled in a specific way to make a particular product or part of a product. The advent of 3D printing allows a product or component to be built up, layer upon layer, from a three dimensional diagram of the final design.
The technology is still developing and there may be issues of bonding strength between the layers for some products and the type of materials that can be 3D printed, however, as the technology develops these issues will become less and less.
This type of technology has the potential to move manufacturing from large industrial assembly lines that rely on volume and repeatable and interchangeable parts as means of reducing cost, to a paradigm of smaller batch quantities that are highly tailored and highly specific to a customer’s individual needs, located much closer to the ultimate consumer.
An additional trend, that of consumer behaviour, is also having a profound effect on manufacturers. We have an insatiable appetite for data and information, surpassed only by our insatiable appetite to communicate.
"The McKinsey Global Institute list of disruptive technologies includes such areas as: advanced robotics, energy storage, 3D printing, advanced materials and autonomous or nearautonomous vehicles."
We now purchase more on the internet than ever before. We want to read reviews about the products we intend to buy, and we want products specifically tailored to our needs.
Manufacturers are looking at sophisticated methods of providing this information to us and providing customised products to us, at low cost, without the cost overlay of expensive retailing outlets.
In every walk of life, knowingly or unknowingly, we are becoming ever more dependent on our information technology systems, with the result being richer and more sophisticated lives, where life itself moves at a faster pace.
The uptake of smart phone technology and tablets allows connectivity at an unprecedented level. Purchasing behaviour, where we purchase on line, from international retailers with sophisticated retail offerings challenge supply chains. Using data analytics to predict this behaviour and adjust production volumes and supply chains to meet it will be the new wave in successful manufacturing.
Trends are seeing advertising moving on line in favour of traditional media sources. The benefits of digital advertising is not only reaching a wide and global audience, but it allows very sophisticated and highly specific tailored and personalised advertising techniques, focused on specific target markets.
Governments and economies in many jurisdictions are looking at how manufacturing can be re-engineered and stimulated to form a solid and structured part of their economies. There is a desire by governments around the world to create jobs and manufacturing is seen as an employer of people, however, this too is changing.
As an example, the US Government has recently announced a range of initiatives to invest in research around advanced manufacturing, to enhance productivity and counteract low cost economies.
The UK government white paper ‘Public perceptions of manufacturing and efforts to rebalance the UK economy’ sought to provide for the first time an evidence base for the discussion on the image of manufacturing in the UK.
In Australia, debate continues to rage as to methods to stimulate manufacturing without providing compensation as the Australian economy goes through a structural shift from a resources-based economy to longer term sustainable industries.
Understanding forces that are beyond your control can be unnerving. However, for the sophisticated business, it is also the opportunity.
It is the interplay of all these technology and social changes and how manufacturers uniquely blend and combine them to create a sustainable competitive advantage that is key. The successful manufacturer of the future will exploit predictive purchasing behaviour analytics and automatically modulate production volumes and production types, to customise production to meet specific buyer trends.
They will operate in highly automated, low labour facilities with sophisticated and intelligent enterprise management systems that can quickly respond to changing market needs – in real time. They will move further up the value chain and become part of global production networks. These are just some of the changes that manufacturers will need to adopt to adapt to the external influences and gain competitive advantage.
To achieve this, the manufacturing facility of the future will be very different from what we know it to be today.
It will be a highly sophisticated, technologically advanced facility where the production plant is dynamically capturing data about market and production process and is instantly adding value to the product that is being produced,” says John.
“Using data analytics to predict this behaviour and adjust production volumes and supply chains to meet it will be the new wave in successful manufacturing.”
This is an eloquent engineering problem. We already have powerful and usable technologies to shape future manufacturing – via product development, production flexibility, innovation, supply chain options and by linking manufacturers to the customer experience.
“Rather than being remote from the end user, manufacturers have incredible access to opportunities that will allow them to create bespoke products, connecting customers to suppliers. Manufacturers will be able enhance product and brand loyalty, and improve product life cycles, by using technology to manage such activities as servicing or driving purchases through direct marketing,” adds John.
“Leveraging the benefits offered by synergistic development of technology is the key to delivering growth solutions. Our opportunity is to channel the momentum created by disruptive change and harness that energy to deliver substantive and dynamic responses for the manufacturing industry,” says John.
“Sophisticated engineering and design, integrated thinking and knowledge, plus expertise in all of these technologies allows us to do this for clients,” says John.