Manufacturing is at a critical juncture, with resiliency emerging as the central challenge for the industry. Recent vulnerabilities to external disruptions, ranging from demand fluctuations to energy price shifts, have underscored the pressing need for manufacturers to fortify themselves against unforeseen events.
A recent research publication outlines why 2024 is poised to be a pivotal year for manufacturers, focusing on mitigating vulnerability and enhancing long-term resilience. In 2021 and 2022 alone, the industry suffered a staggering $3.2 trillion in additional revenue losses due to disruptions in engineering, supply, or production.
Lead times from product order to delivery increased by 40%, reflecting the industry’s struggle to swiftly adapt to rapidly changing conditions. To address these challenges, manufacturers are prioritizing six key strategies in their digital manufacturing initiatives for 2024:
1. No Factory is an Island
Manufacturers are recognizing the imperative of adaptability across all production-related facets, necessitating tight integration into the supply and product chain. Seamless planning between demand and operations, driven by demand-driven manufacturing, is now a key objective. Integration between Enterprise/ERP and Manufacturing Operations Management (MOM) is crucial, supported by integrated business planning.
Supply chain planning solutions are expanding into production planning, with projects, such as SAP transformations to S/4, actively seeking better integration with Manufacturing Execution Systems (MES). Unified product and plant designs, along with converged PLM systems, are essential for anticipating and simulating changes.
2. The Race to Autonomous, AI-Powered Operations
The increasing frequency of disruptions requires manufacturing decisions to shift from weekly to daily or even real-time. AI adoption is accelerating as manufacturers aim for autonomous operations, allowing production managers and engineers to focus on anticipating major trends and evolving plant operations accordingly.
3. Automation Investments are Increasing
Driven by the need for flexibility and a shortage of skilled labor, manufacturers are investing heavily in automation. Future factories are designed for full automation, including machines, lines, and internal logistics. The average investment in digitizing production and supply networks per company is expected to double in the next three years.
4. Digital Twins are Going Mainstream
Operational digital twins, integrating ERP, PLM, and MES without massive updates, are gaining traction. This approach enables faster optimization opportunities discovery and resolution deployment across factories. Digital twins also address quality issues and contribute to sustainable manufacturing.
5. Generative AI
Generative AI is becoming indispensable for accessing and managing knowledge in engineering and manufacturing. Experimentation with operations copilots and applications in maintenance job planning, generative design, prototyping, and code conversion is expected to accelerate by the end of 2024.
6. People Remain at the Center
The need for skilled labor is intensifying, requiring in-house data and AI expertise. As automation evolves, new skills on the shop floor are essential. Roles will transform, with production engineers focusing on optimization via twins, maintenance technicians preventing failures, and manual operators programming and supervising robots.
In the pursuit of sustainable growth, adaptability and resiliency have become paramount. As disruptions persist, manufacturers are gearing up for significant technology investments and transformative agendas, signaling a dynamic evolution in the industry.