Bottom Line: The top 10 manufacturing trends reflect how manufacturers are planning to achieve their goals of revenue growth, operational improvements, digital transformation, and launching new products and services in 2019.
Manufacturers who excel at orchestrating analytics, Business Intelligence (BI), quality management and real-time monitoring to improve manufacturing strategies are growing 10% faster than their peers. 81% say real-time monitoring is improving their business, and 60% say analytics and Business Intelligence (BI) are essential for managing manufacturing operations today. These and many other fascinating insights into what sets the highest performing manufacturers apart from their peers are available from IQMS’ latest survey Where ERP Is Making The Greatest Contributions To Growth. A copy of the survey results are downloadable here (PDF, free, opt-in).
The Following are the Top 10 Manufacturing Trends for 2019:
- Analytics and Business Intelligence (BI) gains greater adoption across supplier networks, shop floors and senior management teams. Look for 2019 to be the year where advanced analytics, BI, predictive analytics and machine learning apps and platforms enable manufacturers to operate from an integrated data model that capitalizes on legacy systems while providing more rigorous analytical tools. In parallel, there will be more self-service analytics and BI apps specifically designed for manufacturers. With the advanced analytics spending predicted to grow from $136B in 2016 to $232B in 2021, attaining an 11.3% CAGR, this area is going to lead all IT investment categories for manufacturing CEOs.
- Heightened competitive and customer-driven pressure to excel at quality is going to make quality management & compliance apps sales soar in 2019. Manufacturers who have never implemented an ERP system will purchase their first one in 2019, driven by the need to attain and stay at high-quality I’m seeing aerospace and defense (A&D) suppliers invest in advanced ERP systems with quality management and compliance as the cornerstone so they can excel at customer-initiated audits that occur at least every 90 days or more.
- Many manufacturing supply chains will evolve into intelligent networks with real-time track-and-trace, legacy systems integration and greater delivery accuracy and quality metrics than ever before. Applying analytics, BI, quality management and track-and-trace applications to supply chain problems are together creating knowledge sharing networks. In 2019 look for more manufacturers to integrate legacy on-premise, 3rd party, and new cloud-based applications into a single unified platform that integrates with suppliers and enables greater speed and scale.
- Real-time monitoring will continue to progress beyond light sticks and Programmable Logic Controllers (PLCs) to WiFi and Internet of Things (IoT) sensors. Real-time monitoring creates a contextually rich stream of data that provides insights into product quality, machine performance, machine yields and holds clues to solving many manufacturers’ most challenging problems. 81% of manufacturers say real-time monitoring is improving their businesses today, according to our latest IQMS survey. The survey also found that manufacturers growing 10% a year or more are early adopters of Radio Frequency Identification (RFID) tags and the Internet of Things (IoT) sensors, capturing data streams at a higher accuracy level than manual methods. The following graphic details the results of our latest IQMS survey:
- Due to the chronic labor shortage in manufacturing coupled with increased demand high volume parts and assemblies, robotics adoption will grow rapidly in mid-tier manufacturers. Look for this trend to accelerate in 2019 as the fastest-growing manufacturers who have succeeded in winning new customers turn to robotics to fulfill the high volume orders of their new, and often foreign-based customers. Manufacturers setting the pace in this area have won large contracts with foreign-based medical products and components providers who need 1 million parts a week or more. With a chronic labor shortage and flourishing growth opportunities, robotics will emerge in 2019 as the proven path to solving the productivity paradox. Due to all of these factors advanced robotics spending is predicted to grow from $92B in 2016 to $225B in 2021, attaining a 19.7% Compound Annual Growth Rate (CAGR) with manufacturing, resource industries, consumer, and healthcare being the largest segments today.
- The manufacturing trend of smart machines is on the way to becoming the new normal across manufacturing’s shop and production floors on a global scale. Walk across any new shop or production floor, and you’ll see many machines that device-specific operating systems have graphical interfaces configurable to the control panel and mobile device level. They all have extensive reporting capabilities including advanced statistical analysis of performance, quality, and yields. Machinery providers are rushing their next-generation machines to market in response to manufacturers’ drive to create lights-out manufacturing operations in the next 12 months or less. The goal of having a completely unattended, autonomous production line running multiple shifts is a high priority for many manufacturers today. It’s a proven strategy for competing and winning new customers against more entrenched, and manually-based competitors.
- Pragmatic, results-driven pilots of Industrial Internet of Things (IIoT) are transitioned to full production when they prove they can solve production problems to the machine level. IIoT holds the potential to normalize the diverse data structures that slow down greater device- and plant-level analysis of key performance metrics. Expect to see IIoT revolutionize many aspects of manufacturing operations including real-time production monitoring, improving the accuracy of key metrics including Overall Equipment Effectiveness (OEE), production yield rates and production efficiency. Greater IIoT adoption in 2019 will make it possible for more manufacturers to pursue the following roadmap to improving OEE and see measurable business gains.
- In 2019, blockchain’s greatest potential will emerge in manufacturing. Increasing visibility across every area of manufacturing starting with suppliers, strategic sourcing, procurement, and supplier quality to shop floor operations including machine-level monitoring and service, blockchain can enable entirely new manufacturing business models. Supply chains are the foundation of every manufacturing business, capable of making use of blockchain’s distributed ledger structure and block-based approach to aggregating value-exchange transactions to improve supply chain efficiency first. By improving supplier order accuracy, product quality, and track-and-traceability, manufacturers will be able to meet delivery dates, improve product quality and sell more. Manufacturers have the most at-scale deployments of blockchain today, leading all industries according to Capgemini.
- Manufacturers will accelerate the development and launch of smart, connected products to escape price wars and open up new product-as-a-service and service-based pricing models. The era of smart, connected products has arrived. Manufacturers predict 47% of all their products will be smart, connected and capable of generating product-as-a-service revenue by 2020. Capgemini estimates the size of the connected products market globally will range between $519B to $685B by 2020. Capgemini’s conservative estimate based on survey data and market analysis is that smart, connected products will add $518.9B or 6.63% to manufacturing value-added to the GNP of surveyed countries. In an optimistic scenario, where manufacturers accelerate their smart, connected product efforts, their combined efforts could potentially add up to $685.6B to manufacturing value added in 2020.
- Spending on security will soar in manufacturing following at least one or more breaches of manufacturers occur in 2019. The majority of manufacturers are relying on legacy enterprise security systems that aren’t scaling for the number and complexity of threat surfaces today, leaving many of them vulnerable to breaches or worse. Every endpoint and identity is a new security perimeter. Manufacturers will turn to a “never trust, always verify, enforce least privilege” approach to security, adopting a Zero Trust Privilege(ZTP) to overcome these and more security challenges. ZTP grants least privilege access based on verifying who is requesting access, the context of their request, and ascertaining the risk of the access environment. Designed to secure infrastructure, DevOps, cloud, containers, Big Data, and scale to protect a wide spectrum of use cases, ZTP is replacing legacy approaches to Privileged Access Management by minimizing attack surfaces, improving audit and compliance visibility, and reducing risk, complexity, and costs for enterprises. Leaders in this field include Centrify for Privileged Access Management, Idaptive, (a new company soon to be spun out from Centrify) for Next-Gen Access, as well as Cisco, F5 and Palo Alto Networks in networking. Due to all of these factors the cybersecurity market is predicted to grow from $81B in 2016 to $117B in 2021, attaining a 7.7% Compound Annual Growth Rate (CAGR).