There was good news to end last week with the manufacturing sector growing faster than expected in the final months of 2016 as the UK economy continued to defy worries of a downturn following the Brexit vote.
Output from the sector grew by 2.1% in December and was up 1.2% in the October-to-December quarter. But, again, it came with a health warning that a falling pound had helped by making our exports cheaper.
The ONS figures showed the wider measure of industrial output, which includes manufacturing, rose by a better-than-expected in December and there were additional reasons to cheer with a robust construction sector in positive territory. This also takes the burden of responsibility off the services sector, which is likely to show – albeit traditionally – a downturn for the beginning of 2017 as consumers go into winter hibernation.
The UK has a great manufacturing tradition. For centuries, we’ve been a beacon of brains and innovation that sparked previous industrial revolutions, but like every industry, it is entering another ‘game changing phase.’ A digital and robotics revolution that will fundamentally change the way businesses operate in this sector for ever.
Revolution or Evolution?
The next manufacturing age, known as Industry 4.0, shares several goals with the previous three industrial revolutions. These include increased speed to market, quality and cost-effectiveness.
However, the similarities end there. Where mass production and global economies of scale were game changers in earlier chapters, the factories of the future aim for greater flexibility and individualisation.
A range of developing technologies are challenging existing production models by enabling secure, plant-wide connectivity between machines, people, information and business processes. So what are these technological game-changers that will be driving the next decade in manufacturing? And what should businesses leaders be sitting up, taking note and focusing their time and investment on?
The Internet of Things (IoT)
IoT is a network of interconnected devices, machines, vehicles or any ‘living’ object that have the ability to share data without being told to by humans.
These systems are rapidly finding their way into the manufacturing environment where process huge amounts of data and information in split seconds and translate that into the right actions on the shop floor or out to sales forces, retailers or other extensions of the business.
Forget pulling cross department reports or sitting in meeting rooms drowning in excel spreadsheets. ‘Anecdotal’ is also so last decade.
‘Big’ Data and Analytics
We’ve all heard the term ‘big data’ but probably never really bothered to consider what it can achieve. In a nutshell, it’s a network of computers’ ability to analyse and to reveal patterns, or trends. In manufacturing is becomes of especially good use when looking at human behaviour, maybe how we’re using a product or device and how that product can become more efficient or be built with less risk.
What’s also pretty clear is by analysing vast amounts of data, it can spot market needs and therefore open new opportunities or income streams.
Whilst even the big firms are just getting to grips with using this information, SME’s can still replicate and take learning’s on using even more simple data to better effect. From customer buying habits, profitable or weaker catchment areas. Or, having a little digital widget that tells the sales team when a previously purchased product is likely to need replacing as it ends it’s ‘wear cycle’. Large or small, manufacturers need a strategic plan for collecting, organising and using data effectively.
Man Versus Machine
Robots are out of their cages and on the loose. They are now able to work safely alongside humans and this development is set to transform the shop floor environment sooner than most MD’s of a manufacturing business would imagine.
These machines, once just the reserve of the nuclear power stations or massive car plants where if something went wrong a siren would kick off and red flashing lights signal the need to evacuate is no longer. With visual analysis, learning abilities and even awareness of situations they are able to perform more complex tasks with greater agility.
But here is the rub. With increased smart robotics will likely come job losses, especially in functional or repetitive areas. The human ability to think out situations laterally, creatively or emotionally will give us the upper hand. The downside is a robot doesn’t need a tea break, require a work-place pension or want two weeks in Corfu in July.
3D printing technology is advancing fast. It enables the production of solid objects from digital data. The benefits for manufacturers are vast. From creating prototypes or bespoke products in a fraction of the time or cost. Tooling or moulding costs would tumble and you could export a product digitally by sending the digital coded blueprint into production to anywhere in the world.
There is even a restaurant in (yes, of course) New York that 3D prints your food. Specialising in pizza, pasta and brownies for dessert. You can image the Silicon Valley billionaires salivating at the mouth whilst making the pilgrimage for a basic margarita costing $50. It works in a layered way, printing the dough and the tomato sauce, although the cheese added by hand. Furniture, bridges and even artificial limbs can all be printed.
These technologies are poised to be a major catalyst for growth across the sector, enabling manufacturers to ramp up productivity and output, as well as focus on new business interests. Exploring the potential of these technologies now and finding ways to get ahead of the curve, could see those who invest in a very exciting place in the coming years.