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The future of manufacturing has entered an era of continual change, fueled by cloud and edge computing, AI, supercomputing GPUs and the steady pace of innovation.

Don’t Overthink Manufacturing’s Future

Nov. 28, 2023
Against the steady wave of technological innovation, an organization’s ability to assess, pilot and scale technology will remain the competitive differentiator.

A decade ago, manufacturers worried about challenges like fragmenting customer demand, rising wages in low-cost regions, and the scarcity of talent. A complex and uncertain business environment appeared to be driving change. Managers hit by the Great Recession of 2008–2009 started thinking about the long-term value of strengthening operations with digital technologies. All this was before the COVID-19 crisis, before China became a frenemy and Russia became an outcast.

The 2010s saw a push to establish circular economies. This came hand-in-hand with the campaign to develop sustainable manufacturing. Such strategies include optimization of materials, waste management, increased energy efficiency, reduced water usage and adoption of low-carbon technologies. In retrospect, we can see how slowly manufacturing organizations came around to adopting sustainability policies and metrics.

What was the future of manufacturing at that point? Analysts touted the power of data streams enabled by information and communications technology (ICT) infrastructure and sensors. AI was not yet at the forefront of digital strategies. Instead, companies were investigating the benefits of real-time Big Data, IoT solutions, advanced automation, collaborative robots and cloud computing.

Global responses to Covid-19 changed everything.

Most manufacturing and supply chains were unprepared for it. After the initial shock of lockdowns, skyrocketing prices, and shortages, companies started to “think digital.” The two-year crisis period was a time of invention, innovation, remote collaboration, and flexibility. Digital became an inseparable element of operations, R&D and customer interaction.

The future of manufacturing was envisioned as relying on extensive use of collaborative and cloud-based solutions, automation, and digital twins for prototyping, simulation, and new-technology commissioning. Connectivity and data availability became pillars of manufacturing and supply chain management.

Resiliency in manufacturing has improved as digital technology and connectivity have become an integrated part of business worldwide. Manufacturers have learned to tame supply chains, post-pandemic, but geopolitical turmoil has spawned new challenges and is driving a wave of trade and manufacturing protectionism. Countries are investing to stay competitive, especially in energy and other critical sectors like chips, electric batteries, and defense manufacturing. Reshoring and near-shoring are signals that the world is struggling to regain balance, but there will be no going back to the world of the 2010s.

A number of futures were created in the last decade. Each perspective was based on the way we understood the world according to the inputs, experiences, and parameters we were able to calculate, estimate, and model.

Today, the ways we live, consume and produce are continually disrupted by technology, arriving in shorter and shorter cycles — the latest being AI.

Generative AI (GenAI) focuses on the creation of new and original data (e.g., images, text, audio). It may change how people and technology work together. The frenzy of attention that greeted GenAI in 2023 confirmed that we live in an “AI everywhere” world.

Early adopters of generative AI technology in manufacturing are emerging, piloting ChatGPT-like tools that provide users with information, content or code. GenAI can be integrated into enterprise solutions such as enterprise resource planning, product lifecycle management, and customer relationship management systems. GenAI technologies in such systems can assist human users in generating and comprehending complex content. Additionally, developers can use GenAI to create or enhance use cases and develop applications.

Digital twins — simulations of an object or process — are also knocking at the door. Immersive, hyper-realistic digital twins that blend simulation, collaboration, management, and closed-loop traceability have the potential to create a parallel global world of manufacturing and supply chains.

The future of manufacturing has thus entered an era of continual change. It is fueled by cloud and edge computing, AI, supercomputing GPUs and the steady pace of innovation from hyperscalers, established tech vendors and start-ups. As an optimist, I believe these technological tools offer a true democratization of the future.

My advice is to not overthink what the future will look like in manufacturing, energy, or work. Instead, strive to visualize your business as a resilient, developing organization. Build capability to access the value of digital technology during the initial phase of its lifecycle. The ability to assess, pilot, and scale will remain the crucial competitive differentiator.

Jan Burian is senior director, head of IDC Manufacturing Insights EMEA and leader of Europe: Future of Operations Practice.