Digitization In The Industry: 5 Trends For Manufacturing Companies

Digitization- The fourth industrial revolution is in full swing. A whole series of studies show, however, that most companies are not  far, with implementation. This was also the result of a survey by the Federal Association for Materials Management, Purchasing and Logistics (BME) in spring 2019. A large majority of the participants in the industry knew almost all of the 15 technologies for digitization asked for. However, most of the companies did not even have many of them in the planning stage, let alone in test operation.

In addition to digital progress, the framework factors for industrial companies are also changing massively. Parable, the leading provider of a software platform for networked work, has identified five developments that production managers and those responsible for digitization should be targeting. 

Digitization In The Industry: The End Of Offshoring

For a long time, factories were relocated abroad to reduce labor costs. But the potential savings are shrinking. The advancing digitization plays a central role in this. Because more and more work is being automated, the wage share in production costs is falling, while salaries in the so-called low-wage countries rise simultaneously. As a result, fewer and fewer companies are being drawn abroad. But that’s not all: Many are even relocating their production back. This is confirmed by a representative study by the Fraunhofer Institute ISI and the Karlsruhe University of Technology and Economics. For companies with international production sites, this means that they should put their foreign production to the test.

“Take a close look at their processes. Ask your industrial engineers to think about what might happen in a repatriated factory,”. “The repatriation of plants also offers the opportunity to rethink your technological infrastructure, including IT systems and operational technology (OT). You can also identify the potential for increasing efficiency – for the front office and employees in the field. “

Factories Are Getting Smaller

Supply chains are starting to become more regional and shrink to a fraction of their current size. As a result, the individual factories of the future will require less space to meet demand. They will increasingly settle in the vicinity of the cities that they also supply – a trend that Amazon has already initiated with its logistics centers. Therefore, production managers should now deal with the question of what a micro-factory could look like for their products: What technology would they use? What would the jobs look like there? This thought experiment is not far from the next step: to a test or a prototype. In this way, they gain valuable experience before the competition follows suit.

Digitization In The Industry: Variety Is Becoming The New Norm

One of the significant trends is the desire of many customers for evermore choice. In production, development, therefore, goes from smaller batches to one-offs. Technologies such as configurators or 3D printing enable manufacturers to meet this demand. The changeover then takes place not just a few times a day but almost continuously. To ensure that operating costs do not get out of hand, the factories have to be infinitely flexible and very efficient.

Industrial companies should therefore consider: For which products would they like to offer even more adaptations or variants? To understand these “micro-needs” of your customers, you should, first of all, do some market research. In the second step, you can consider which variants you need for this and which technologies, machines, and processes you need to implement this degree of customization.

The Shortage Of Skilled Workers Is Worsening

The flexible, smaller factory of tomorrow will be much more automated than most factories today. Therefore, utterly different employee qualifications are needed there. At the same time, this development coincides with a massive shortage of skilled workers. Because, according to figures from the Federal Statistical Office, retirement will begin in 2025 for baby boomers with high birth rates. In 2030 alone, half a million more people are expected to retire than enter the labor market. As the profile of workers in production changes with the advancement of digitalization, there is a need to rethink, “Jobs in production are increasing in strategic importance and can therefore be better paid. This means that they attract workers from other professions, such as the high-tech industry, who would like to work more practically. Likewise, manufacturing companies could already look for tech-savvy talent among their workers and develop them into their future roles. “

Networking Includes The Shop Floor And Field Service

In the factory of the future, every worker will operate a small army of machines. He has to communicate with them in real-time as well as with his peers. Because millions of euros are at stake for complex devices and services, it is essential to work more precisely than ever. Employees in the factory or on-site at the customer need clear work plans and precise and understandable instructions at all times. In addition, there is a need for a real-time feedback loop between the factory floor and the operations managers and international evaluation options for management. In other words, production companies need technologies that enable their employees to have access to all the information and all of the specialist knowledge they need to carry out their tasks.

As with most remarkable changes, those who move forward most courageously win, manufacturers who use the five technology trends as catalysts for their digital innovations have the best chance of securing a leadership role even in difficult economic times.

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