Predicting the top 7 trends in manufacturing for 2020

After starting the year strongly, manufacturing left 2019 faced with shrinking production and global uncertainty. Deloitte suggests manufacturers should increase the resilience in their operations…

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January 3, 20206 minutes read

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After starting the year strongly, manufacturing left 2019 faced with shrinking production and global uncertainty. Deloitte suggests manufacturers should increase the resilience in their operations while building and improving their ‘digital muscle’.

So how will this translate into the major technology trends in manufacturing for 2020?

Manufacturers will have to navigate the data tsunami

From smart factories to autonomous supply chains to IoT sensors in plants and products, manufacturers have access to incredibly valuable data going into 2020. But the sheer volume of data and speed of its creation is resulting in a data tsunami. A survey from the Manufacturing Leadership Council revealed that only 9% of companies thought they were prepared to use the volumes of data from IoT devices to drive decision-making.

This requires a fresh approach to how manufacturers capture, analyze and transform their data into insightful information to improve operations, drive innovation and seize new business opportunities. Fully exploiting AI and analytics for manufacturers in 2020 will mean a greater focus on data preparation and integration to bring together and enrich information from a wide range of sources to quickly identify trends and guide recommendations for decision-making. 

Customer-centricity will drive the connected supply chain

The rapid advance in connected technologies is moving manufacturers from focusing on internal operational improvements to their customer. ‘Customer-centricity’ seems to be on every manufacturer’s lips – the need to re-oriented your business to meet customer demands in an increasingly connected world.

As manufacturing industries, especially automotive, become more centered around the customer, the challenge for better experience and continual innovation grows. This is placing new pressure on global supply chains as companies seek to build complex multi-tiered ecosystems with suppliers and non-traditional partners. In 2020, the move to a fully digital, connected supply chain will accelerate as manufacturers address the need to respond in real time to demand fluctuations

Sustainability will be a key priority for manufacturers

The ethical supply chain is gaining traction – fast. Traceability and accountability in relation to materials, resources, and sourcing are becoming increasingly important to consumers. Studies show that customers are willing to pay a premium of up to 25% for products they believe to be ethically sourced. From virtually nowhere, sustainability and social responsibility are high on the supply chain executive’s agenda. Over 90% of supply chain professionals told a 2019 OpenText survey that an ethical supply chain was extremely or very important to their business.

In 2020, manufacturers and their supply chains will be increasingly driven by transparency around environmental and socially responsible best practices.

The smart factory will rely on AI-assisted analytics

There is no doubt that factories are getting smarter. The number of industrial IoT devices being deployed is reaching dizzying proportions. Today, manufacturers are taking advantage of connected devices and sensor to increase the efficiency and productivity of their operations. However, after years of discussing the issue, we are still faced with a vast volume and variety of data from a host of IIoT systems.

As 2020 progresses and IIoT helps make the smart factory smarter still, manufacturers will move to exploit AI-assisted analytics to ensure that no IIoT data is left unused. Optimizing IIoT data lies at the heart of delivering value into production and product development, through disruptive technologies such as the digital twin.

Digital twins will transform manufacturing

Digital twins will continue to be one of the fastest growing applications of Industrial IoT in 2020. The digital twin market is set to grow at 35% between 2019 and 2024 as manufacturers increasingly deploy digital twins to transform their business. This year, manufacturers will leverage digital twins to optimize supply chain efficiency, gaining a much clearer view of materials usage and identifying opportunities to automate replenishment.

In addition, the use of digital twins will grow in product development by blending data from production systems and enterprise applications to incorporate real-world product use feedback into design. As more and more parts and sub-systems ship with their own digital twin, manufacturers with look to enterprise IIoT platforms for end-to-end management and security of their digital twin capabilities.

Globalization will lead to greater supply chain complexity

Increased trade tariffs from North America, and Brexit in Europe, are the two key driving forces of increased levels of complexity across today’s global supply chains. This continued political uncertainty will create a paralysis among manufacturers and a delay in investment. In some cases, manufacturers are being forced to unravel global sourcing strategies and near shore production back to domestic markets. These enforced regional mandates will cause manufacturers to review the management of their digital integration strategy. As a result, in 2020, manufacturers will increasingly adopt cloud or hybrid integration environments for a flexible and scalable way to manage their supply chain infrastructures.

Changing workforce will place focus on automation

The rising skills gap remains a major challenge for manufacturers. Estimates say as many as 2.4 million jobs will be unfilled this decade as an aging workforce retires and attracting STEM graduates proves difficult. In addition, manufacturing staff often lack the digital skills needed to support the digital transformation of manufacturing business. This all adds up to a potential loss of manufacturing GDP of $454 billion by 2028 simply through the lack of qualified employees. The focus is automation. This is not just physical robots that can take care of some of the production but digital process automation that can improve process efficiency while freeing staff from boring, mundane, but essential tasks. This gives the organization the opportunity to upskill their existing workforce.

In 2020, manufacturers will build upon their automation efforts to help re-train personnel and re-orient roles to the needs of digital production and supply chains.

In tough and uncertain times, the conventional wisdom has always been to look towards cost reduction and improved efficiency. However, the super-fast, consumer-driven environment that manufacturers find themselves in today no longer makes that approach enough. We have talked a good deal about disruptive digital technologies. For manufacturing, 2020 will be the year that many of these technologies go from disruption to transformational and towards business-as-usual.

If you’d like to find out more about OpenText solutions for the manufacturing sector, please visit our website.

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