An RSM Global Blog
The future of the manufacturing industry across the developed world is uncertain and policy makers everywhere are looking for a magic bullet. Last month Nissan committed to building new cars in Britain only after “assurances” were provided by the British government over the impact of Brexit on the car industry. In the US, meanwhile, the presidential election has seen renewed promises to grow the manufacturing industry with both candidates vowing to bring manufacturing jobs back to America and revitalise the hardest-hit manufacturing communities like Detroit and Michigan, albeit in different ways.
However, while the industry landscape looks uncertain and these developments move along slowly, manufacturing has been transforming. Technology is transforming the industry. So much so that we find ourselves in the fourth Industrial Revolution. History tells us that this will impact manufacturing significantly and in many different ways including supply chains, consumer demand and labour. We have come a long way from steam power and mass production which drove the first and second Industrial Revolutions. The fourth Industrial Revolution is defined by data. Big data and the Internet of Things (IoT) are at the heart of the movement, however, the key is how this data is interpreted and applied to optimise manufacturing overall.
Smart manufacturing is transforming the manufacturing industry globally and companies which do not move with the times could suffer. A report from the Conference Board of Canada from earlier this year found that some manufacturers are working with 20-year old software. One Associate Director at the Board commented, “In lieu of data and facts, many operational leaders are still relying on experience, gut, and manually produced spreadsheets to make decisions.”
There is a real opportunity for middle market manufacturers to take advantage of these new technologies which are becoming more affordable, while middle market companies are nimble enough to experiment with new processes and ways of thinking which could put them ahead of their larger corporate competitors.
But innovating doesn’t require a complete rebuild of your supply chain and there are many small changes middle market companies can implement to make their processes smarter. Smart tags can help optimise supply chain processes by tracking inventory in real-time, from raw materials to the final product. Modern manufacturers are also employing cloud technology to manage these smart devices to help information flow from the factory floor to the very ends of the supply chain.
Mobile technologies are playing a more significant role in manufacturing businesses as they are becoming more affordable and middle market companies are catching on. In RSM US LLP’s 2016 Manufacturing Monitor, which surveyed 1,174 middle market manufacturers from around the world, 64% of respondents indicated that they had plans to implement mobile technologies into their business. Various mobile platforms, including phones, tablets and smart watches can be used specifically for the manufacturing environment. These devices are great platforms on which to share real-time performance data and allow quality and technical managers to have all of the information they need in their day-to-day jobs on them at all times.
Some businesses are also looking at IoT technologies to improve operations and product quality, and reduce costs. In fact, 40% of companies surveyed already have an IoT strategy in place. IoT also has obvious benefits that can be realised in production processes, including process optimisation and preventative maintenance - but it also has other benefits, such as guarding against cyber-attacks.
It is disconcerting that not all businesses are embracing smart manufacturing. We know that nearly one-third of declining manufacturers expect to decrease their IT expenditures in the next year. But, investing in technology does not have to mean pouring money into the latest and greatest technology. Even smaller, less expensive technologies can help you improve your processes in more ways than you think.
To read the RSM Manufacturing Monitor 2016, click here.