Saturday, January 11, 2014

Manufacturing Trends towards 2050

Well it is a new year and in many of us we look ahead, last year I looked at 2020 from an operational landscape, this year let us take a little bit further look out for looking at manufacturing. These are long term trends that will evolve and impact architectures, and I believe the whole landscape of operational systems. It relates to the discussion I brought up late last year on the trend from globalization to continentalision, due to speed of demand, and cost relative to energy etc.

Some interesting charts that show another set of trends I found in reading from ARC:
The top chart shows an interesting but fully expected trend towards more local, often small businesses, this aligns with continentalision, where time and agility to deliver is key, combined with another trend which is the move to customization of the end product. (note this is the opposite to what we see in the industrial software/ commercial software market where customization is giving way to “good enough” applications.) People will shift from brand to local product that aligns with the way they live , environment etc, this means more than language it means the culture of the consuming product. To achieve this combined with optimization even multi national companies will shift to local manufacturing sites for final productisation.  Example is in tobacco manufacturing where primary manufacturing is trending to centralize, and the packaging is local, enabling supply chain optimization, while agility to serve local markets.
But the bigger trend this move to “local/ smaller manufacturing facilities” suggests is the shift to “collaborative manufacturing” across an ecosystem of smaller more agile manufacturing facilities often run and owned locally. The opportunity for this comes through shift in technology to the “cloud” and “managed services” which enable a multi site manufacturing chain to managed in a series manufacturing facilities across the “product value chain” even if they are not the same company, but now a “collaborative manufacturing value chain” for that product. Managed services also provide the ability for these smaller companies to adopt mature operational/ MES applications as “managed services” providing them with operational control and alignment which has not been affordable before.
The chart below also supports the big trends by functions:
The key trends of shifting to renewable s, the impact of energy costs as the end of the “second industry revolution (oil based) “ declines, the “bottom of the pyramid” which refers to lowest 4 Billion income earners how we raise their standard of living. This is much more holistic view of the world than the 20th century, except for the mass customization demand of my local product.
My feelings that this time to deliver, and satisfy the market the old “shelf space” will rule, with immediate satisfaction and freshness driving buying habits, combined with costs as transport and logistic costs and risk rise.
The final chart to reflect on shows the growing factors that effect manufacturing and operational decisions and therefore systems. 

This diagram does not look into the future but shows how in the last 20 years the major factors that influence manufacturing have expanded significantly, and they continue to grow. I would add the big one which is the shortage of skilled people, or operational empowerment in a dynamic workforce. Where now we have plants coming on line faster, or being acquired either into a global supply chain, or being added into a “collaborative manufacturing value chain” relative to a product. Combine this with the dynamic workforce that will be rotating roles, locations at less than 2 years in a role, while the ability to deliver more customized products drives the complexity of the production process, and value chain.
All good food for thought, as we look at significant operational transformation.

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