North America's largest metal forming, fabricating, welding and finishing event heads to Orange County Convention Center in October 2024. FABTECH provides a convenient "one stop shop" venue where you can meet with world-class suppliers, see the latest industry products and developments, and find the tools to improve productivity, increase profits and discover new solutions to all of your metal forming, fabricating, welding and finishing needs.
North America's Largest Metal Forming, Fabricating, Welding and Finishing Event
By Derek Ochs, Director of Software Development, Macola Software
The U.S. manufacturing industry is the largest in the world, producing more than 18 percent of the world’s goods. With the country’s renewed focus on “buying American,” the opportunities for U.S. manufacturers are vibrant. At the same time, against the backdrop of globalization, U.S. manufacturers cannot rest on their laurels and must constantly innovate and uncover new efficiencies in order to compete with countries like China that traditionally have lower operating costs. Technology, including but not limited to automation, helps give U.S. manufacturers the edge they need to stay lean, productive and competitive.
To understand how manufacturers are capitalizing on emerging and mainstream technology automation, we commissioned a survey last spring of medium and large manufacturers based in the U.S. The survey found that overwhelmingly, the biggest drivers causing manufacturers to make changes to their business models or operations are technology and IT innovations.
Following are the survey’s notable findings and implications – as well as best practices for how manufacturers can join their peers and evaluate whether new and mainstream technologies are right for their own businesses.
“Industry 4.0” is Here
The survey findings underscored that manufacturers are embracing the “fourth industrial revolution,” a digital technology revolution also referred to as “Industry 4.0.” Manufacturers are finding value in applying 3D printing, the Industrial Internet of Things (IoT), software for business process automation and other innovations to their businesses.
With so many technology applications and tools available today, which are driving the most value for manufacturers? When looking at seven different technologies, including collaborative robots, 3D printing and wearables, a majority of manufacturers indicated that big data analytics drives the most business value, with the Industrial IoT close behind. This isn’t surprising given the amount of data collected by Internet-connected sensors on machinery. At the same time, Industry 4.0’s flagship technologies aren’t fads – with manufacturers leaning upon them every day on the shop floor. Fifty-nine percent of respondents are currently using 3D printing, and finding it has positively impacted their businesses in the areas of production efficiency, cost savings and revenue. Of those that don’t currently use 3D printing, 78 percent plan to use it in the future.
Other technology that was previously dubbed “emerging” is now decidedly in the mainstream. Seventy percent of manufacturers are currently using wearables (i.e., watches and glasses) in their operations. Of those that don’t use wearables yet, 61 percent plan to use them in the future. Finally, 57 percent of respondents are using industrial robotic technology, mainly for material handling and machine feeding in tandem with human employees.
As for technology tools that are still new and “buzz-worthy” and have not yet been implemented, manufacturers show the most interest in virtual reality, connected machinery, tablets, facial recognition and drones.
Business Process Automation Drives Value
“Automation” of all types has infiltrated and disrupted manufacturing operations in recent years, and can denote automation via software applications that streamline business processes, as well as automatic equipment like robotics that is used on the shop floor to augment or replace tasks previously performed by humans. While there are some reports around job loss due to automation, in many cases automation frees up teams to be more strategic and efficient. In particular, business process automation has become nearly standard practice for medium and large manufacturers, with 77 percent of respondents from our survey embracing it – and automating IT processes like data entry, plant management, order management and payroll/accounts payable.
The business value is tangible, with manufacturers who use business process automation seeing stronger revenue gains on average in 2016 as compared to those who do not automate, according to the survey. Within this same group of manufacturers, 81 percent said they have realized reduced costs and increased revenue in their organization from the use of automation technology. 76 percent noted automation has helped them reduce errors and improve accuracy.
Separating Hype from Reality
Despite the fast adoption of many technologies within manufacturing operations, not every innovation is right for your business. Here are some strategies to help you evaluate.
First, consider the hype cycle. Hype and technology go hand-in-hand. By understanding hype and how to avoid or exploit it we can make better business decisions. A famous marketer Roy Amara came up with a theory that eventually became known as Amara’s Law – “we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” In other words, in the short term, humans tend to exaggerate how important something will be because we like to get excited about the new and possible. In the long run, the novelty wears off, and we exaggerate the unimportance of the technology.
How do we separate hype from reality? Before considering whether to implement a technology application in your operations, take a step back and seek to distance yourself from the hype and truly understand if there is an opportunity to drive business value with the technology. Do your research; there is a lot of information available online from trade journals detailing the practical applications of Industry 4.0 technologies in manufacturing settings.
Finally, don’t be afraid to test a very new technology within your business via a small-scale pilot or prototype. Wal-Mart, for instance, is currently experimenting with drones for warehouse delivery. While Wal-Mart certainly has larger resources for such experiments, consider partnering with a university for a research project to keep the endeavor cost effective.
To learn more about how to separate manufacturing hype from reality, please attend my presentation, “Drones, Wearables & VR: Manufacturing Hype or Reality?” during Session F57 on Tuesday, November 7 at 10:30 AM in Room 401A.
FABTECH 2024
About the Expo
North America's largest metal forming, fabricating, welding and finishing event heads to Orange County Convention Center in October 2024. FABTECH provides a convenient "one stop shop" venue where you can meet with world-class suppliers, see the latest industry products and developments, and find the tools to improve productivity, increase profits and discover new solutions to all of your metal forming, fabricating, welding and finishing needs.
