Industrial manufacturers with global exposure said the projected contribution of international sales to total revenue will likely reach 31% over the next 12 months, or one percentage point higher than the previous quarter, according to a January 2014 survey by PricewaterhouseCoopers (PwC).
But while steady growth in the manufacturing industry may be welcome news, it can also lead to issues such as managing and transportation costs, as well as logistics. For these, Industrial Internet is touted as the next big thing in the efficient management of the manufacturing process, resulting in reduced lead time to product launch and shorter output times.
Industrial Internet is essentially a new ecosystem of connected machines that are programmed to increase efficiency and minimize waste. General Electric (GE), which coined the term, believes this technology has the potential to lift manufacturing growth to pre-recession levels, with 46% of the global economy benefiting from this system. GE forecasts Industrial Internet to add up to USD 15 trillion to the global GDP over the next 20 years. The company rolled out 14 new Industrial Internet-related products last year.
Apart from a push toward the standardization of Industrial Internet, the manufacturing industry sees a handful of other trends particularly in operations and technology. According to third-party logistics company and freight broker Cerasis, investments in platforms such as ERP (enterprise resource planning) and TMS (transportation management systems) can help greatly in managing process, increasing efficiency and improving reports.
In addition, IDC sees potential in 3D value chains, listing it as one of its Top 10 predictions for 2014, which also includes expectations for PLM (product lifecycle management) strategies to become an investment priority for IT manufacturing.
'MANUFACTURING RENAISSANCE'
Overall, these are trends that indicate a movement toward the "factory of the future" with IDC predicting this year will be pivotal for a new "manufacturing renaissance".
"The manufacturing industry has an established track record of continuously improving productivity and is at the cusp of a new wave of gains that will dramatically restructure value chains to be closer to demand regardless of direct labor costs. This is being driven by an 'intelligent economy' where customers are more informed, talent is at a premium and the time to react to changes is compressed," Robert Parker, group VP for IDC Manufacturing Insights, said in the company's forecast statement.
"In 2014, companies should put together a set of business initiatives across critical line of business areas such as supply chain, factory operations, product management, and customer experience/aftermarket services, and follow a progression toward the principles of the '3D' value chain, the theme for our 2014 predictions," he continued.
One technology that will be hotly discussed in the manufacturing industry is 3D printing, which has been used in manufacturing, although its use has been limited to specific processes. Based on research from the Industrial Research Institute, further integration of 3D printing into the manufacturing process and the proliferation of e-commerce will result in a widening of quality gap - a division between the low-end quality results, where manufacturing will be focused on rapid results at localized hubs, and the high-end model, where research firms can provide product ideas and social capital to SMEs and local manufacturers.
For now though, the industry is still far from seeing 3D printing on a large-scale. However, discussions around 3D printing highlight the fact that when there are new properties or elements introduced at any stage of the supply chain, processes are inevitably going to change across the board--making extensive adoption an understandably cautious process in itself.
© Zawya BusinessPulse 2014
