www.ml-council.com
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“Data will
no longer be
a by-product
of the manu-
facturing
process, but
will become
a co-product
that delivers
increasing
economic val-
ue to both the
customer and
the manufac-
turer.”
rapidly evolving from the goal of minimizing
direct labor costs and maximizing the economies of scale, to the potential elimination of
many direct labor costs and the maximizing
of market-driven product customization. This
evolution is perhaps, a natural progression,
driven by both changes in the global labor
pool and advancements in production capabilities. It is happening now because the economic constraints that have previously made
these changes impractical have also changed.
Much like the way cheap oil stymies the adoption of alternate energy sources, cheap labor
has for decades stymied the investment in production capability. The business proposition
for investment in new facilities simply wasn’t
able to overcome the low cost of labor in developing countries, until now.
While the labor component costs of products shrink, the need to be closer to markets
is also becoming a prominent driving factor. The flexible capabilities of advanced
manufacturing will slowly cause the migration away from large centralized factories,
towards smaller, more agile, networked production assets that are located closer to the
markets they serve. This is particularly compelling for products that have localization
requirements in product and political attributes, or where a reduction in transportation
costs creates a competitive advantage. All
economies may benefit in some ways from
this trend. The shrinking and redistribution
of factory assets will simultaneously create
repatriation of manufacturing to developed
economies, and maintain/expand satellite facilities for markets abroad.
A Hyper-Connected Business
The exponential adoption of ad- vanced technologies presents a dizzy array of potential changes
and investment demands for manufactur-
ing in the years ahead. It is clear that the
manufacturing business is changing into
a hyper-connected endeavor, both within
and without the four walls of the factory.
Huge datasets, AI, and autonomous production will combine to execute complexity
that extends beyond the human capacity to
manage in real time. A virtual facsimile of
the physical factory will become the interface
to production as physical execution becomes
increasingly removed from direct human
management decisions and intervention.
But not all technology will be adopted at
the same scale and pace. It’s certain that some
technologies will find their most effective applications in individual industries, while the
same technologies may have little penetration
in others.
The Future is Closer
Than You Think
Many technologies of the future are already in place. The differ- ence will be the scale of deployment. IIo T will continue to expand to everything imaginable; AI will be ubiquitous and
extend to every transaction; the compute infrastructure will be split between the cloud
and edge networks; while technologies
such as virtual and augmented reality will
be more application specific, enhancing human tasks with data and expert knowledge.
The advanced factories of the near future
have already begun their digital transformation and early adopters are beginning to create competitive advantage. By investing in
emerging technologies today, many leading
companies are now well on their way to creating the technical expertise and the critical
digital transformation culture they need to
succeed and thrive in the years ahead. That’s
the competitive imperative now facing all the
world’s manufacturing companies.
The future may look far off, but it will be
here before we know it. M
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