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Manufacturing In the Middle: Growth, Opportunity and New Challenges

Jun, 21, 2018 Hi-network.com

There is no one size fits all view when it comes to manufacturing. Large, advanced plants are using a plethora of advanced manufacturing processes, robots and data as a core part of their operations. There are emerging startups who are lean and able to respond to changing customer demands quickly. Then there are also a lot of companies in the middle, ranging from around 10 million in revenue up to 1 billion in revenue and are a significant impact on the overall economy. This group is also seeing substantial growth in both revenue and employment while taking some very innovative and agile approaches to smart manufacturing. A recent report,Middle Market Manufacturing -How to Thrive in a Transforming Environment, from the National Center for the Middle Market at Ohio State University (and co-sponsored by Cisco) highlighted some of the areas these mid-size manufacturers are focusing on as well as some of the current challenges they are addressing both near and long-term.

The report noted five key insights and areas that manufacturers in the middle market are focusing on, these include:

  • Competition
  • Supply chain relationships
  • Changing product/service mix
  • Technology on the factory floor
  • Talent

Completion: 86% of the businesses surveyed noted that competitive pressure has grown over the last five years, from both a global standpoint and adjacent companies entering into new spaces. Some of the challenges that have arisen out of increased completion include more pressure on supply chains, customer consolidation and the potential impacts of tariffs on pricing.

Supply chain: The overall management and utilization of the supply chain increasingly become essential, and a competitive advantage for manufacturers. Shifts in customer demands for more speed as well as "just-in-time" manufacturing means collaboration between these groups, both upstream and downstream, is now a critical component to ensuring timeliness, transparency, and better supplier relationships. The report notes that companies who can optimize these supply chain integrations are also the ones seeing faster growth.

Changing product/service mix: Increasingly, manufacturers are looking for ways to not only deliver quality products but how to add new value-added services as a way to differentiate in a more competitive market.  Adding further value streams and services to products is changing the way manufacturers organizing and going to market. These changes also mean the need to add new capabilities and shifting the current business model. More connected devices with IoT as an example means changing how a company will support security, connectivity, data, and privacy.

Technology on the factory floor:  Manufacturers are making investments in some key areas. The report found there were five top areas that middle market manufacturers are focused on.

Source: Middle Market Manufacturing: How to Thrive in a Transforming Environment (2018). National Center for the Middle Market.

These included:

  • Cybersecurity
  • New materials/composites
  • Advanced process control
  • Robotics/advanced automation
  • Additive manufacturing and rapid prototyping

When factoring in the supply chain, competition, market changes, and talent, choosing the right technology can help increase productivity, improve the manufacturing process and drive growth, but these investments also add in more risk to properly secure connected machinery and the need to manage all the new data that is now being produced.

Talent: More than half of the manufacturers surveyed in the report noted that talent is one of their most significant challenges. While there is a challenge in attracting talent overall to enter the manufacturing field, the problem is also finding the right specialized expertise who can support and implement all the new technology and automation on the factory floor. Aging workforce is also a significant factor with talent retiring, and this means more outreach to vocational schools, universities, and organizations to help fill the gap. Adding in globalization and completion as noted above adds to the challenge.

The report also looks into areas such how to overcome the risk noted and how to overcome them, and the best practices that growing manufacturers are utilizing. I invite you to download the full report here:

 

I also invite you to explore the following manufacturing topics:

  • Cisco Connected Factory
  • IT OT Convergence
  • Factory Security

tag-icon Tags chauds: Industrial Automation Cisco Industrial Security smart manufacturing factory collaboration

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