2020 has been a year like no other for the manufacturing industry globally. While there were considerable setbacks like pandemic driven shutdowns & supply chain & operational issues, the learning & the digital transformation wave that was unleashed was unparalleled. The pandemic pushed manufacturers across the globe to be more innovative, agile & more resilient than ever. According to a KPMG survey, 96% of manufacturing leaders confessed that the progress to digitize their operations has accelerated, with 48% saying that it has sped up by a matter of years.
2021 is expected to be a year of cautious optimism for manufacturing. Moody’s has revised their outlook for the global manufacturing industry to stable from negative, with an EBITDA forecast of growth of around 8% in 2021 following double-digit decline in 2020. Here are some trends that will play a major role in enabling this.
1. Digital Transformation shifting from Industry 4.0 to Industry 5.0: Pre-pandemic, even industry 4.0 initiatives were considered to be far-fetched. Smart manufacturing spurred on from collecting data from multiple sources, analyzed via AIi computing engines & deep learning algorithms to get a comprehensive picture of their business, to evaluate production, planning, forecasting and optimization decisions. While Industry 4.0 focuses on making manufacturing smarter without human intervention, Industry 5.0 involves collaboration between smart manufacturing by machines & creativity of humans. The result of this will be a product that caters to the highly personalized requirements of the customer of today, while making sure the quality, efficiency of operations is top notch.
2. Focus on Sustainability: Fuelled by global warming, rising energy costs and the recent pandemic, sustainability-both in terms of resource efficiency- whether it is energy, water or supply chain practices, has ceased to be a buzzword and become a critical priority for manufacturers. According to a recent survey of manufacturing leaders, 63% leaders have sustainability as a priority for 2021, with principal areas of focus being energy efficiency (34%), waste reduction (16%), and operations management (13%).Innovative new age solutions like AI & IoT ensure that energy wastage can be pinpointed to the exact piece of equipment and cause, ensuring that loss is curtailed in real-time. With aid of these solutions, manufacturers can reduce both indirect energy consumption (reducing number of shifts, decreasing hours of functioning) and direct energy consumption (reduce total load for machinery, ensuring that loading threshold is never exceeded) resulting in not just cost savings, but also increased productivity, easier compliance, and more efficient operations.
3. Remote Monitoring & Predictive Maintenance According to Aberdeen research, an hour of downtime costs companies USD 260000 on an average as long back in 2016. Though preventive maintenance has been the prevalent industry gold standard against this, rising competition & focus on quality & optimization requires all the plant equipment to be in top condition all the time to avoid failures and unplanned downtime. Predictive maintenance is the solution for this, by identifying problems, diagnosing the precise issue, it provides proactive alerts in real time, maximizing equipment availability & OEE (Overall Equipment Effectiveness) and decreasing downtime, maintenance costs & efficiency losses. With Remote monitoring becoming a necessity from a luxury due to the pandemic, More and more manufacturers are experiencing how data insights and sensor capabilities enable them to automate & monitor repetitive activities, protecting both worker health & overall efficiency gains.While the earlier trend was to only implement this for the most critical/expensive piece of machinery in the plant, innovative solutions (software driven) now ensure that the entire plant can be covered for a fraction of the previous cost, exposing errors with greater accuracy & clarity.
4. Virtual Plant Experts: Previously, any optimization, insights or diagnosis of critical issues at plant level was under the purview of a handful of experts, who typically would be senior leaders in the manufacturing world. Bringing in these experts for every single problem is often cumbersome & expensive, & risky in the current scenario brought on by the pandemic. It is here that AI driven solutions like UptimeAI make a difference by bringing human-like intelligence at scale in equipment monitoring. By extracting best practices from a peer based learning environment enabled by these solutions, issues can be diagnosed faster, more accurately with lesser alerts. With every new issue resolution, the system also learns continuously. In 2021, Virtual Plant Experts will be the best friends of manufacturers, enabling them to proactively optimize processes, resources & manpower.
5. Agile & localized Supply Chains: Supply chains were the worst hit during the pandemic. From outsourcing & offshoring, manufacturers are now turning towards domestic manufacturing & building where they sell, to ensure faster time to market, lower working capital, easier compliance to government policies & increased resiliency. In addition, Manufacturers are now turning towards digital solutions for greater visibility on their supply chains end-to-end, right from suppliers to customers at real time. Advanced technologies like the Internet of Things, Machine learning are enabling connected supply chains across complex networks to make sure the right material reaches the right place on time.
All in all, 2021 promises to be an interesting year for Manufacturing, as the industry evolves into one that is innovative, agile & responsive both to the needs of consumers and the market, that will take it to newer heights.