Top Digital Transformation Trends in Manufacturing for 2020

One of the most fascinating things about digital transformation is that it moves instantly—and slowly—all at the same time. The trends we see on the horizon for Industry 4.0 in 2020 are much the same as trends that we’ve seen growing … revolutionizing … over the last few years. The difference isn’t so much in the technology, it’s in the number of companies beginning to utilize it, and the reasons why.

Case in point: the Internet of Things. Technologists, myself included, have been talking about the massive IoT benefit for manufacturing, literally, for years. Heading into the 2020s, however, it’s not just the technologists that are spouting the benefits. It’s the manufacturing companies themselves recognizing the massive impact of connecting one’s work and processes to the IoT. It’s also the increasingly demanding consumers who want higher quality goods, often with responsible manufacturing practice, right now this very moment. If there’s one thing that’s clear, it’s that manufacturers will be facing increasing pressures in cost, efficiency, and quality in the coming decade. And they’re finding that new tech adoption—be it IoT, 5G, AI, enterprise resource planning, or VR/AR training—is the only way to survive.

The following are some of the top digital transformation trends in manufacturing we expect to expand in 2020, and the reasons why.

Internet of Things

First things first: can we all celebrate the fact that we’ve dropped the additional I from the IIoT? More and more, digitization isn’t happening by industry—it’s happening everywhere. The IoT used in manufacturing overlaps at innumerable points with IoT in retail, martech, and just about everything else. In fact, the continuing interplay of all those avenues of data and connectivity are providing incredibly important insights that are changing the way manufacturing is being run.

For instance, yes, the IoT promises cost savings. It helps provide insights on processes, costs, productivity, etc. But at the same time, it’s also providing information about the supply chain—the quality of parts and products being used, where they came from, and how they were grown, bought, or created. More and more, customers are demanding that the things they buy are manufactured responsibly. And manufacturers—not just brands selling the products being manufactured—are being help accountable for those details thanks to the IoT.

Research from MPI Group found nearly 70 percent of manufacturers credit the IoT with increasing their profitability. Research shows manufacturing companies will invest some $267 billion by 2020. Clearly, they’re starting to get the message that the technology can provide incredible value for them. Also noteworthy, however, is that 90 percent of manufacturing companies in the United States today have fewer than 500 employees, according to the National Association of Manufacturers. Will they have the capacity to invest in, and support employees knowledgeable of, the IoT? It’s questionable. And it may be the one thing that causes small manufacturers to drop out of the digital transformation game altogether.

Predictive Everything

Research shows a single hour of downtime can equate to $100,000 in losses in a manufacturing environment. Using data, AI, and predictive analytic, some say manufacturers can reduce planned outages by 50 percent. IBM says it can even decrease unplanned outage by 15 percent. Predictive analytics help companies better understand how their machine work, and why they fail, which allows them to prevent those failures altogether. Going forward: not just a nice to have, but a must have for manufacturing environments.

Indeed, manufacturers today are operating in an environment that is full of risks and unknowns—how will the market change? How will it be disrupted? Where will their business take them, geographically? Will they be able to find partners in those areas that share the same level of commitment to quality as they do? With so many global variables at hand, predictive analytics can help manufacturers make better, smarter, faster, and less risky decisions about everything from machine maintenance to supply chain optimization.

5G

Yes, we’re finally hitting an age when 5G will play a role in improving latency, providing high bandwidth, and allow for reliable real-time communication on a massive scale. With 5G, manufacturers can begin to increase their use of senor, cloud, centralized tracking, quality inspection, etc., forming an “ecosystem” of smart manufacturing. Yes, we may see a growing disparity between 5G have and have-nots in 2020 (much like IoT). But it will undoubtedly play a larger role in smart manufacturing moving forward.

Obviously, technology like 3-D printing will continue to allow companies to make faster, cheaper prototypes while AR and VR will continue to allow for better, safer training across the board. However, as I noted, the growing connectedness of consumer demands will play a much more significant role in changing manufacturing for the better in the coming year than those technologies themselves. Today, every company is here to serve the customer, no matter how far away from the customer they may have functioned in the past. The IoT will force them to do that even more in the coming decade. It will also make that level of accountability possible.

Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.

The original version of this article was first published on Forbes.

Daniel Newman

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited by CNBC, Barrons, Business Insider and hundreds of other sites across the world. A 7x Best-Selling Author including his most recent “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
Daniel Newman