2019 will be the year of boldness for the manufacturers. In fact, 2018 has been marked by economic uncertainty and trends suggest that 2019 will not be different. From tariff wars and trade policy to Brexit and data protection, manufacturers have to navigate through troubled waters in a turbulent and highly politicized environment. So it won’t be about taking the opportunities as they come anymore but of carrying out profound digital transformations of industrial operations. According to a recent survey of 151 North American manufacturers conducted by Decision Analyst (IQMS), technologies that provide greater clarity and mobility are at the top of the list to accelerate their strategic transformation. Especially since we know now that the manufacturers who already use these technologies to answer strategic challenges are growing at least 10% faster than their peers.
1- The era of smart machines has arrived
2019 will be a key year for manufacturers to move toward smarter production.
Although smart machines that collect and analyze data have been on the market for decades (even before the invention of the word Industry 4.0), they are far from being everywhere in industrial environments and many manufacturers still use a few or no intelligent tools.
The trend to adopt connected tools and machines will continue in 2019 and, in our opinion, for many years to come. In addition, many manufacturers of smart machines are focusing on a software-intensive products developments approach.
The result is more affordable industrial machines that can operate without supervision for two or more shifts of production. This will make it easier for small and medium-sized manufacturers to become an intelligent (or semi-intelligent) factory.
To conclude, with the labor shortage and the booming growth opportunities, smart machines will become in 2019 the answer to the productivity paradox. The expenses in this sector are expected to increase from $92B in 2016 to $225B in 2021, reaching a compound annual growth rate (CAGR) of 19.7%.
2-More and more real-time
The adoption of real-time monitoring is accelerating beyond programmable logic controllers (PLCs) to WiFi and Internet of Things (IoT) sensors.
Real-time monitoring creates a rich data flow that provides information on product quality, machine performance, and yields and that solves the most difficult problems that many manufacturers face.
This information is certainly not new for you, dear readers, but, the adoption of these technologies is still slow because of the lack of evidence of efficiency and performances as well as a fear of moving forward.
Nowadays, we have more and more evidence of performances and success which, in our opinion, will be an accelerating factor of the adoption of these technologies.
Indeed, according to the last IQMS study, 81% of manufacturers say that real-time monitoring improves their activities. The survey also revealed that the manufacturers who have early adopted the RFID tags or the IoT sensors, capturing data flow with a higher level of accuracy than manual methods are growing by 10% or more per year.
3- Always more data… but also more sources to secure
As we have seen in the previous sections, the trend towards smart machines is becoming the new standard in manufacturing and production workshops worldwide. These machines all have advanced reporting capabilities, including high-level statistical analysis of performance, quality, and yield.
Manufacturers will therefore see the amount of data it records grow in an exponential way.
This is the reason why we believe that 2019 will be a great year for advanced data analysis, decision analysis, predictive analysis and machine learning to enable manufacturers to operate from an integrated data model that leverages existing systems while providing more rigorous analysis tools. At the same time, there will be more business-decision applications specifically designed for manufacturers.
This approach will necessarily involve an increasing amount of investment in cyber security in the industrial world. Especially since we can expect some unpleasant surprises in 2019.
Indeed, most manufacturers rely on legacy enterprise security systems that do not adapt to the number and complexity of threat surfaces we have to face nowadays, leaving a lot of vulnerability. Each termination point and identity constitutes a new security perimeter. Manufacturers will therefore have to adopt rigorous zero tolerance approaches to secure their networks and production. As a result of all these factors, and according to IQMS, the cyber security market is expected to grow from $81B in 2016 to $117B in 2021, reaching a compound annual growth rate of 7.7%.
4- More efficient software integrations
The omnipresence of mobile ERP and quality management application deployments on industrial installations will accelerate in 2019, reinforced by advancements in the integration, ease-of-use and growth of the high-speed cellular network (we are waiting to see what 5G will bring). Many manufacturers consider access to mobile ERP as a technology that provides greater data accuracy, improves operational efficiency and reduces production times.
In several discussions, companies in the automotive, industrial and plastics industries have recognized that mobile ERP applications also allow them to better manage product life cycles. This visibility not only provide greater operational efficiency, but it also reduces production times and activates alerts that save days and weeks of lost time.
5- A more and more digitized supply chain
Following the same trend as 2018, the logistic and supply chains will continue to evolve drastically in reaction to a market that has been fatal for this sector in recent years (Sears, one of the American emblems, has just seen one of these last financial remedies fail).
Many industrial supply chains will evolve into smart networks with real-time monitoring, integration of existing systems, metrics of quality and delivery accuracy never before achieved. The application of data analysis, BI, quality management and supply chain problems monitoring creates a set of knowledge sharing networks with very high added value. In 2019, we will see more and more integrated manufacturers using unified platforms for supply chain management, including supplier integration, allowing faster and more scalable solutions.
6- More innovation
In 2019, we are going to see an acceleration in the development and launch of intelligent and connected products to escape the price-war and open up new pricing models based on products and services. The era of intelligent and connected products has arrived. Manufacturers expect that 47% of all their products will be smart, connected and able to generate “product as a service” revenue by 2020. Capgemini estimates that the size of the global market for connected products will be between $519 billion and $685 billion by 2020.
We cannot talk about innovation without talking about Artificial Intelligence, which we will see more and more applications in the industrial field. In addition, blockchain technologies will have to be closely watched, as many people predict better applicability in the industrial field, which will remain, in our opinion, at a low level but could open doors to change by 2020.
To conclude, 2019 promises to be an excellent year for the manufacturing industry. As new technologies, systems and processes are introduced into companies in the coming years, we will see significant changes in the way products are designed and manufactured, while manufacturers will see their efficiency increase and so their revenues and customer satisfaction.
At BRIDGR we are more than ready to continue this adventure and support manufacturers in their digital shift!