Home / News / What the FUD? Finding Clarity in Manufacturing’s Future

What the FUD? Finding Clarity in Manufacturing’s Future

I love the camp of the “Taken” movies. The idea that you can be cool as a cucumber if you have “a very particular set of skills” does ring true, though, in that there is calm in knowing what lies ahead.

While I am not the actor Liam Neeson or his character Bryan Mills, I do feel I have been exposed to enough information about manufacturing that I can prognosticate about what will happen in the very near future despite the global concern and hand-wringing in the news. 

My prediction? In the grand scheme of time, I believe we have five, maybe 10 [metaphorical] seconds to organize for the future … very important seconds.

Here are four things that are almost certainly going to happen, and what manufacturing leaders should be doing about it.

1. You Will Decimate Your Own Supply Chain

You have certainly cultivated a list of quality suppliers over the years, but if you make products with lots of parts, you are going to have a lot fewer soon.

According to Michael Gravier, an associate professor of marketing and global supply chain management at Bryant University in Rhode Island, “3D printing means a greatly simplified, highly responsive, and infinitely flexible supply chain fulfills the order.”

With 3D printing, whole part groups in an assembly can now be a single part. You might want to use a 10x reduction in the number of parts that go into your products as a starting assumption, but here are a couple examples of 20:1 reductions – and even that might end up being conservative.

This will mean cultivating deeper trusted relationships with fewer partners who co-locate with your operations. These deeper relationships will start at design as these “mega parts” will be intricate and will need to be incredibly precise.

What to Do Now: Start determining which companies have or will have the capability of deeply partnering with you in designing your next-gen products. Start assessing which parts will be affected. Start testing new parts that replace part groups in specific products.

2. You Will Need to Read Your Customers’ Minds

With physical objects about to be dramatically easier to manipulate than ever before, customers will demand increased customization options. Academic talk of the long tail becomes real now that we have the technology to actually serve it. Additionally, as product cycles get shorter and shorter, a two-tier – let alone a three-tier – distribution system no longer makes sense.

In the bottling industry, for example, 30% of wine and spirits go through a single distributor. This means that alcohol made from potatoes, wheat, corn or grapes, combined with water, is moving by gas-guzzling or battery-draining trucks all over the country and the world. I think we can be certain that this can’t last, as we engineer a world where manufacturers can go direct to the consumer from a local base – if, for no other reason than the sheer ludicrousness of the cost of the supply chain logistics inherent in the system we have today.

In this new world, you also won’t have to wait for the retailer to tell the distributor to then tell you, the manufacturer, what changes the consumer wants in some imperfect game of telephone. If you do, you’ll be long out of business. You can’t approach this next phase of the journey with a commodity mindset; you’ll be dead. Focusing on value means that you will really have to know your customer.

What to Do Now: Rethink how you get buying and preference signals from your customers. If you have a product that could be sold through an Amazon or a Walmart, use these venues to understand early what exactly the customer wants. Rethink how your products will get to the consumer; in other words, evaluate what it would take to remove tiers of distribution. Study the role of product management in technology companies. Then reinvent the roles of brand or category managers with an even more data-driven approach (by adding in their direct digital behavior) to determining what your customers want. Create leading indicators of interest through limited-run product experimentation and testing to replace lagging indicators of what you sold.

3. Your Factories Will Shrink and Come Home

As automation increases, factory technology becomes more flexible, and 3D printing shrinks your supply chain, your factories are going to shrink. You won’t be chasing cheap labor around the world and you will put these factories near the markets they serve. This shift started even before 3D printing. As Boston Consulting Group’s Justin Rose and Martin Reeves argue in the Harvard Business Review:

“In 2004, the cost of manufacturing on the east coast of China was approximately 15 percentage points cheaper, on average, than in theUnited States. In 2016, that gap was down to about 1 percentage point.” 

As further evidence, in 2016 Walmart committed to buy $250 billion more products made, assembled or grown in the United States, in part prompted by the near elimination of a wage price gap.

So, the cost of labor is no longer a deciding factor. It also won’t make sense to use fuel or energy to move materials great distances from centralized locations, even when they are sold direct to the consumer, if the factories can be small, flexible and located near the markets they serve. Sure, there are some people predicting a future world of unlimited power, perhaps from the sun. Enormous power storage capability is required for electrical power abundance, and we are still pretty unsettled as to whether or not the battery as currently conceived is the most efficient and sustainable thing humans can come up with for this purpose. And, with the basic science of grid-sized battery storage still in the lab, it is pretty clear that we can’t count on this anytime soon.

What to Do Now: To get ahead of the pack, you need to package up the knowledge from your existing factories and test what it means to reinvent what you do in a smaller, more nimble footprint.

4. You Won’t be Able to Find the Talent You Need

Your smaller plants will be significantly more automated to be flexible enough to serve a wider variety of consumer demands. This means that you’ll need serious talent to operate, maintain and reconfigure this equipment that goes well beyond programming a PLC. I have heard from enough academics at conferences and at the World Economic Forum over the past year to know that academia is not rising to this challenge. You will have to attract and train these people yourself.

According to the National Association of Manufacturers, there are 488,000 unfilled manufacturing jobs (as of October 2018). Like it or not, you are about to become a technology company, and you have to behave like one. This means creating great jobs that aren’t in dank warehouses, but in clean, modern facilities with ergonomic workstations. It means augmenting workers with the ability to receive instructions, collaborate, and gain insight from mobile or wearable devices. It means turning your current recruitment strategies on their heads and starting over from the ground up.

What to Do Now: Figure out exactly what machines will do and what humans will do to optimally drive your results. Take a look at the state-of-the-art on display in Germany and Singapore, or even a Caterpillar plant near you, and start envisioning your blueprint now. Think about the design of everything from how the pipeline of talent will work, to the physical environment as well as the technology that supports it.

Conclusion: “Very Important Seconds” 

There was a time very recently that these four predictions were as pie-in-the-sky as a flying car, something one of Parsable’s customers actually develops today. They were “leave it for the next generation” types of challenges. With the pace of technology we are now seeing, these are now near-term issues. Every manufacturing leader should be looking to set their company up for success by leaving a legacy of designs for the future. If this is what is going to happen and IT IS going to happen very soon, carpe diem. Luckily, over your career you have amassed “a very particular set of skills” to get this rolling.

Ken Pulverman is the chief marketing officer of Parsable, which provides mobile process execution and measurement technology via mobile devices to help manufacturers—including advanced manufacturers—make complex processes simple. The goal: to modernize work to attract new talent, execute complex work more precisely and rapidly and continuously improve work processes.

About SkyNET

Leave a Reply

Your email address will not be published. Required fields are marked *