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The Transformation of Manufacturing is Underway- Is Your Organization Prepared?

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These past few weeks have featured an explosion of business, general media and technology vendor recognition concerning the new era of digital manufacturing that is underway and its profound impacts of how we think about this area.  The notions of additive manufacturing, smart devices and predictive analytics applied to products and services are now becoming more top-of-mind for multiple industry executives.

We are moving from an era of predominantly physical to that of digitized and software concentrated aspects of products and services.  The sooner your company and organizational teams understand the implications of these trends, the better.

This week, the Wall Street Journal featured a special dedicated insert with the lead article, A Revolution in the Making. The series highlighted the profound impacts that additive manufacturing will have on global supply chains in the not too distant future.  Two articles highlight efforts underway at Ford Motor, General Electric, Nike and Mattel in their current applied use of additive manufacturing techniques applied to customized manufacturing. In late May, the Financial Times published an article concluding that the digital based transformation of manufacturing is the key for European based firms to lead in a sustainable recovery from the current economic malaise, but questions if the broader aspects of manufacturing firms fare committed toward change.

Product (PLM) and service lifecycle management (SLM) technology provider PTC is conducting its PTC Live Global customer event this week.  Besides reinforcing the themes noted above, this vendor also co-sponsored a research study with Oxford Economics which is titled Manufacturing Transformation. (No-cost sign-up required to download) This report surveyed over 300 manufacturing executives across six industry sectors. By our view, one of the more significant takeaways from the findings was that 68 percent of those surveyed expect to undergo a significant business process transformation over the next three years. Geographically, European based manufacturers expect more of this transformation, no doubt another reinforcement of the FT article noted above.

The survey results further uncovered that customer fragmentation is a current major concern for manufacturers which is being translated to a heightened attention to coordination of strategy and planning among engineering, manufacturing and service functions.  However, nearly 70 percent of manufacturing C-level executives view talent shortages and labor costs as a critical worry.

When we developed our Supply Chain Matters 2013 Predictions for Global Supply Chains late last year, we considered a prediction on the impact of additive manufacturing but instead noted the trend in our honorable mention predictions. Our thought was that 2013 may well be the year where the momentum of adoption of additive manufacturing techniques across multi-industry supply chains would accelerate. More transformational work remains, but the momentum is clearly accelerating.

In our ten listed 2013 predictions, we identified in Prediction Four that supply chain talent retention, management and development will remain a significant problem across global supply chains.  That challenge continues to manifest itself in executive and other surveys, the latest being the Oxford Economics study.  Prediction Eight portended that the digitization and the building momentum toward bundled hardware, software and services would facilitate further teardown of functional walls. We believe that it will drive product development, customer fulfillment and service under a common leadership umbrella.

Yes, the keys toward industry competitiveness are quickly moving into dimensions of virtual and additive manufacturing where customer needs are individualized, where time-to-market dimensions are even faster, and where design, build and service anywhere have true meaning.  The evidence is quickly building, and the needs for your organization to be prepared to take advantage of these forces are becoming far more compelling. Readiness includes not just technology but ever more important areas of organization, skills development and other enterprise transformational needs.

In the remainder of 2013, Supply Chain Matters will provide added depth to the implications of manufacturing transformation and its implications in organizational and supply chain dimensions. For the time being, we pose two questions for your thoughts:

Are you delivering these manufacturing transformational messages and their implications to your supply chain wide organizational teams?

Are plans and initiatives addressing transformational needs being identified, particularly to help people transform their skills?

 

Bob Ferrari

 

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