Manufacturing Survey: Choose the Right Technology

Findings from this year’s annual State of Manufacturing Technology Report on future technology plans and purchases.

Today’s manufacturers are inundated with technology innovations. From the showy wearables displayed at CES to the foundational technologies that underpin smart factories, there are several paths manufacturers can choose to move toward a future where their operations run more smoothly, efficiently, and profitably.

However, given the options, it can be hard to know where to start. For instance, how should manufacturers qualify technology investments? What characteristics should they look for? And will today’s choices still serve their needs both today and in the future?

With a fast-moving industry, it’s important to stay on top of trends and opportunities. That’s why we survey hundreds of manufacturers each year to understand what they’re investing in, what is making the biggest impact, and how companies plan to use technology to enhance their competitive differentiators.

Consider the following findings from this year’s annual State of Manufacturing Technology Report on future technology plans and purchases.

Solving Tomorrow’s Challenges

When looking at technology use, it’s important to first understand the external factors currently impacting manufacturers, and how they might be affecting the buying and implementing process. While the industry has generally been growing for the past couple of years, there are looming concerns about the skilled worker shortage. It was the No. 1 concern of this year’s survey respondents and demonstrates that regardless of market growth, there is a challenge ahead of us to fill those positions. Other external concerns included the potential impact tariffs will have on the industry, as well as lower-priced competitors.

I’ve heard from manufacturers firsthand who have so many orders coming in they are extending delivery times, being forced to raise prices, or in some cases even turning work down. While a booming economy is good in several aspects, it also creates additional pressure on manufacturers to find the right workers, improve their processes, and reduce inefficiencies all while meeting their customers’ needs.

Regardless of the challenges, the manufacturers we surveyed generally felt optimistic about their futures—55 percent of respondents are confident in their company’s projected growth over the next 12 months.

Technology: A Pragmatic Problem-Solver

We know through our work with thousands of manufacturing professionals around the world that leaders typically don’t invest in technology simply because it’s new or part of a big trend. Technology must have a direct and measurable impact on the company’s ability to work efficiently. Future technologies not yet proven in smaller to mid-sized production environments are likely to not be adopted as fast. The survey data reflects this as well: Consistent with past years, this segment is less likely to take on more recent innovations such as wearables, artificial intelligence, and blockchain. It doesn’t mean that these technologies won’t eventually have a role in manufacturing operations, but does validate the pragmatism of many manufacturing industry leaders when it comes to business investments.

The technology that manufacturers are most comfortable with is management dashboards (one-third use these today) and sales analytics for management insight (at 67 percent). One of the fastest-growing technology segments is analytics: the use of analytics in operations is expected to grow 20 percent in the next five years.

Analytics hold the key to allowing manufacturers to leverage operational data for more control and visibility across the organization. As more manufacturers see that “big data” isn’t as much about building a massive predictive analytics system but more about tapping into machine, sensor, and tool data to make decisions about optimizing production, we expect the cloud to play a pivotal role in building the necessary connectivity to accomplish this.

As the pressure to fill open jobs to meet customer demand intensifies, manufacturers are seeing an opportunity to look inside the organization to make changes to business processes and free workers from repetitive tasks. Tasks like manual cycle counting, inventory management, software/server maintenance, or running business and production reports can be managed in a more effective and efficient way. Technology like the cloud enables employees to take on higher-value work, as well as give them access to information that helps them do their jobs better.

Creating a Framework for Future Success

When we began to analyze what kinds of technologies made the biggest impact today, and which had staying power when manufacturers share their five-year investment plans, we noticed a few commonalities: Technologies that helped make the biggest operational improvements were automated, integrated, and connected.

Some technologies more readily support this strategy—such as big investments in a manufacturing system of record, and cloud technologies that easily integrate APIs with other business processes and systems—but others, such as analytics and IIoT initiatives, could be layered onto existing systems to pull, synthesize and contextualize relevant information.

This also aligns with the future goals of most manufacturers surveyed: 60 percent of manufacturers planning to use technology to enhance plant floor integration and automation; 48 percent intending to increase business process automation; and another third working to both increase plant/enterprise integration and increase supply chain connectivity.

Next-Generation Manufacturing Technology Separates Leaders from the Rest

It’s clear that manufacturers see technology as an effective way to manage and overcome industry challenges. When next-generation technology is focused on enabling the core functions of a manufacturing business, manufacturers believe it separates the leaders from the followers (76 percent agree).

Finally, if we were to distill one thing from this year’s survey, it’s this: There are multiple paths to building a manufacturing business of the future, but organizations should choose their next steps wisely.

Richard Murray is chief product officer at Plex Systems.