Tech News

How the future of manufacturing is starting to fuel innovation?

Internet of Things, robots, Big Data analytics: All these trendy technologies that we are speaking of everyday are also disrupting the manufacturing sector, which could have much more impact on the economy than having a refrigerator that tells you when to buy milk. The integration of information technology and automation techniques into manufacturing process is what we called smart manufacturing.
According to Jim Davis, Vice Provost, Information Technology at UCLA and Sujeet Chand, CTO at Rockwell Automation, in an article published in Time Magazine (see here), “the advanced process manufacturing technology – or smart manufacturing – will fundamentally change how products are invented, manufactured, shipped and sold.”

At stake are:

–         Workers at the forefront, thanks to machines able to react according to their environment, assist aged workers and provide e-learning tools;

–         Factories’ sustainability, that can be reached through energy efficiency techniques and information on the energy consumption;

–         Customers in the loop through flexibility, adaptability and better after-sales experience

–         Manufacturing jobs, which can be kept in the US thanks to businesses able of diminishing the labor costs gap with China and thus remaining competitive in the global marketplace.

Some of the strategic technologies in smart manufacturing have existed for years, but the revolution comes from the very low price at which they are now sold. Microprocessors and electronic sensors are some examples. It is especially noteworthy for additive manufacturing, a process of making a three-dimensional solid object of virtually any shape from a digital model. Although the technology has been created in the 80s, sales have increased largely only since 2010.

A market for large manufacturers and tech SMEs

The main industries that will be disrupted by the smart manufacturing are aerospace, defense (including arms), automotive, and healthcare. Some large manufacturers are already making significant investments to make their factories smarter. General Electric has created an Advanced Manufacturing and Software Technology Center near Detroit. To manufacture the Flyknit, Nike used a micro-level engineering process where computer-controlled “knitting” technology shapes the shoe upper by combining strands of polyester yarn, which allows a waste reduction by 80% compared to Nike traditional shoes.

Innovative SMEs are also major stakeholder in smart manufacturing, developing new technologies for the manufacturing businesses. In additive manufacturing, 3D Systems, the pioneers in producing 3D printers, Organovo, which is developing 3D bioprinting, or Makerbot, which sells affordable desktop 3D printers, are growing quickly. In industrial automation, ATEK Access Technologies, EASOM Automation Systems or Steinbichler Vision Systems are dynamic companies in the Midwest.

A threat for American manufacturing jobs?

During the last 20 years, manufacturing companies were able to get enough competitiveness to be present on national or international markets by relying on quality procedures (e.g. ISO 9001) and streamlining their internal organizations and through strategies like Lean (elimination of non-value added activities) or Six Sigma (statistical methods to reduce process variation).

The smart manufacturing is now putting factories’ capabilities forward, by reducing labor costs, and above all, improving flexibility – the ability to respond to continuous fast changes in customer requirements – and reactivity – the ability to comply with incessantly growing stringent specifications customization needs, quality requirements, etc.

But will robots replace workers? Yes and no. Once you have applied smart manufacturing techniques in your factory, a large part of labor costs is taken out of the equation. The advantage of setting the production in low-wage countries begins to disappear, thus outsourced manufacturers are coming back to the US and are creating new jobs. According to a survey by the Boston Consulting Group, 48% of large manufacturers (more than $1 billion sales) are planning to return production to the US from offshore.

Besides, as factories get smarter, traditional manufacturing jobs will decrease, but an increasingly larger number of “indirect” jobs will be necessary to make the technology work in the manufacturing process. Studies show that as factories get smarter, the employment multipliers will increase to be two, three, four or more times greater than the number of jobs directly in manufacturing.

A supported sector
Considering smart manufacturing’s impact on the future of manufacturing in the US, the sector has been identified as essential by officials and benefit thus from a significant support from State and Federal policies and programs.

In February 2014, President Obama announces two new public-private Manufacturing Innovation Institutes: a Detroit-area based consortium with a focus on lightweight and modern metals manufacturing (LM3I, led by EWI) and a Chicago based consortium that will concentrate on digital manufacturing and design technologies (DMDI, led by UI labs). They will be supported by a $140 million Federal commitment combined with more than $140 million in non-federal resources.

Transatlantic collaborations on smart manufacturing technologies and business models

We will continue to look carefully at this sector to accelerate partnerships between France and the US:

–         In June: we are honored to accompany our partner CEA LIST, co-leader of the French National Industrial Program on “The Future of Factories” for a roadshow in IL, MI and OH to introduce their technologies to American companies.

–         In November, we will partner with the French Consulate in San Francisco and EDF to organize our annual CaFFEET Conference on « Smart Factory : the impact on utilities’business model » on November 19th to 21th, in San Francisco

Please contact us if interested.

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