The Future of the Manufacturing Industry
The manufacturing industry is in a state of flux. While some of the big trends expected to dominate the industry include the rise of artificial intelligence, increased automation and the Internet of Things, other factors that will help shape the manufacturing industry include the increased use of data and data security as well as the future of jobs and the workforce.
All of this shapes what Professor Klaus Schwab, founder and executive chairman of the World Economic Forum, is calling the Fourth Industrial Revolution. It’s going to be an exciting time for manufacturing and CEOs, CFOs and HR have opportunities to leverage these changes in a positive way.
We predict four major changes:
The Future of the Workforce
As Boomers retire, manufacturers will have to fill these vacant positions. While there has been some optimism about a resurgence in manufacturing jobs, the growth rate is lower than pre-2008 levels. Instead of an increase in new jobs, manufacturers are backfilling the positions left open by retirement.
The issue with filling those spaces is the shortfall of skilled workers. Experts estimate that by 2025, nearly two million jobs will remain empty. The National Association of Manufacturers estimate that there are 500,000 jobs that are currently unfilled. Manufacturers will have to look at ways to educate and train current and future employees to close the skills gap. Companies that prioritize education and continuous training will benefit by having a skilled workforce and have access to top talent.
New Technology
Artificial intelligence, the Internet of Things, industrial automation, cloud and edge computing and robotics are advancing rapidly and have already affected manufacturing. The top technology investment for manufacturers would also include cloud computing, predictive analytics, robotics, 3D printing and IoT.
As the price of computing and cloud storage continue to fall, more manufacturers will be able to access these technologies to solve supply chain management issues and capitalize on more powerful data analytics. With a lower barrier to entry to these innovative technologies, companies that fail to keep up may find themselves facing new, global competitors who can produce products faster, better, cheaper and more tailored to their customers’ needs.
CEOs and management teams will have to figure out how to integrate these new technologies and how to upgrade their employees’ skills so they can take full advantage of technological growth. They will also have to foster an atmosphere that encourages and leverages innovation.
Understanding and Leveraging Data
Big data has already made an impact in the manufacturing industry and that will continue to trend upwards. Leveraging smart analysis of the massive amount of available data will produce more efficient processes, smarter products and an even tighter relationship between customers, suppliers and manufacturers. There is also the expectation that the data loop of information from the physical space to the digital space will provide manufacturers with the opportunity to gather new information and use it to solve problems and identify new opportunities.
Data Security
With all this data expected in the next decade and beyond, data security will be an important issue for manufacturers. Manufacturers will need to perform risk and threat assessments on a regular basis as they implement more technology into their processes. With the addition of IoT and other technologies, manufacturers run an increased risk of hackers, ransomware and malware looking to access and steal intellectual property which can impact revenue.
The Fourth Industrial Revolution has begun and it’s already reshaping the manufacturing industry. While the transformation can be challenging, it’s also an opportunity for manufacturers to implement changes that will yield positive results for employees, production and revenue.
