Next-Generation Manufacturing Technology Sets Early-Adopters Up for Success

May 20, 2019
Succeed and solve challenges with technology.

Most manufacturers have invested in some type of technology to run their businesses, whether its new equipment, robotics, software, or business intelligence tools. Each year, Plex Systems conducts a survey that gathers insights on how manufacturers are using technology to solve their day-to-day challenges as well as major industry challenges. We also ask what they’re planning for in the future. The results are published in a report that we share so that you can get an idea on how your peers are tackling issues and preparing for shifts in the industry.

This year, the 4th Annual State of Manufacturing Technology Report, reveals that manufacturers who invest in technologies that enable a connected environment are more resilient and optimistic about the challenges ahead.

Key findings include:

Factors Driving Technology Decisions

Manufacturers are generally optimistic about the future—55 percent of respondents are confident in their company’s projected growth over the next 12 months. Industry numbers at the end of 2018 support this: The Manufacturing Purchasing Manager’s Index (PMI) grew for the last 27 consecutive months.1 This is good news however, growth doesn’t come without some pain.

There are still many challenges manufacturers face in meeting increased market demand. The skilled worker shortage continues to be a major hurdle to overcome. Concerns about tariffs and lower-priced competitors round out the top three challenges. Interesting to note is that technology use topped both the list of challenges to growth and what manufacturers believed their company lacks to respond to competition—which highlights the critical role technology plays in how companies grow and how well the business manages challenges.

Solving the Industry’s Biggest Challenges with Technology

Manufacturers stated that using a manufacturing system of record has helped improve operations: 73 percent improved inventory traceability, 67 percent greater data accuracy, 58 percent improved quality controls, 45 percent improved mobile access to data and information, and 40 percent more accurate projections/planning. In addition, cloud technology helps manufacturers connect their enterprises, enabling employees to have more information do their jobs more effectively. This connectivity also delivers supply chain visibility for anticipating changes in customer demand.

One-third of manufacturers are using management dashboards and 67 percent are using sales analytics for management insight—and the use of analytics is expected to grow 20 percent. The huge opportunity is to leverage operational data for more control and visibility across the organization. As more manufacturers see that “big data” isn’t as much about building a massive predictive analytics system but more about tapping into machine, sensor, and tool data to make decisions about optimizing production, we expect the cloud to play a pivotal role in building the necessary connectivity to accomplish this.

Future Technology Use Focused on Operational Excellence

Technology must have a direct impact on the company’s ability to keep production moving efficiently. Future technologies not yet proven in smaller to mid-sized production environments are likely to not be adopted as fast. The top three technology initiatives manufacturers said they’ll undertake over the next five years are operational efficiency (67 percent), enhanced plant floor automation and integration (60 percent), and enhanced quality program (49 percent).

With the massive amount of emerging technology hitting the manufacturing space, adoption rates are fairly low. Top emerging technologies in use today include 27 percent Bluetooth devices, 24 percent 3D printing/additive manufacturing, and 14 percent IIoT. Twenty-three percent say augmented reality/virtual reality is the single most over-hyped technology in the industry. Smart wearables (12 percent), artificial intelligence (11 percent), big data (6 percent), and blockchain (five percent) round out the top five.

The Industrial Internet of Things (IIoT) Becomes Real

For manufacturers to realize the full potential of Industry 4.0, they must begin the process of “digitizing” which lays the foundation for IIoT. We see that process beginning to take hold. And adoption rates are only going to grow—34 percent of manufacturers say they plan on using IIoT in the next five years compared to 14 percent who are using it today.

Manufacturers who have started on the path to IIoT have done so to achieve realistic, incremental enhancements in line with their business strategies. Since 35 percent of manufacturers plan to implement IIoT projects within the next five years, we believe the more examples of practical IIoT use cases that improve operations and quality, the more other manufacturers will start their own journey.

Next-Generation Manufacturing Technology Separates Leaders from the Laggards

Manufacturers see technology as an effective way to manage and overcome industry challenges. When next-generation technology is focused on enabling the core functions of a manufacturing business, they believe it separates the leaders from the followers (76 percent agree). The technologies that make the biggest impact for manufacturing leaders today are those that contribute to and leverage connectivity. The cloud provides the foundation that results in increased end-to-end visibility across plants and from the shop floor to the top floor.

For more insights, read the full report. Download the 4th Annual State of Manufacturing Technology Report.

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