3 Manufacturing Trends and How They Can Affect Your Business
By: Dan Johnson
There’s little question that the manufacturing industry is experiencing a sea change in how it does business. Over the past several years, and even decades, off-shoring led many companies to rethink how and where they made goods, while the more recent on-shoring trend did exactly the same thing in reverse.
Today, data drives everything. Evolving business models and hyper-efficient manufacturing strategies such as Lean and Just-In-Time (JIT) use data to streamline manufacturing operations and make them more nimble and responsive to customer demands and marketplace trends. Data informs every business decision and underlies the three manufacturing trends we discuss in this blog post:
1. Less is more.
Manufacturers are beginning to embrace the concept of less-is-more, which involves less of everything. By “less” we mean smaller production lot sizes for greater flexibility, fewer chokepoints to increase efficiencies, and smaller, controlled runs that meet customer demands in a more timely fashion without being a slave to set-up costs.
Even manufacturing efficiency strategies such as Material Requirements Planning (MRP) can be affected – and improved – by less-is-more. The original intent of MRP was to enable manufacturers to build inventory based on predicted inventory (and predicted deviation of inventory) that was going to be consumed in a manufacturing process. This would enable Purchasing to have the raw materials required for a manufacturing process on hand, ready for use, when they were needed. But some manufacturers are finding that going to back to the traditional managing of a baseline inventory is a more efficient way for them to handle inventory replenishment management. The result? They can achieve greater throughout and a lower cost basis – again, less is more.
For some, this may sound like heresy. After all, MRP was a phenomenal breakthrough in the quest to automate inventory management. But here’s the reality – 80 percent of what an ongoing manufacturing operation consumes is a stable, known quantity. It doesn’t change much so there’s really no need to include this in planning. In fact, this stock is better managed on the shop floor by the workers who consume the material. If it’s managed on the shop floor instead of by a planner in the MRP system, inventory and costs will go down. MRP will only add frustration. Less is more.
2. Customers are becoming empowered to participate in manufacturing strategies.
Technology, connectivity, and the availability of data have made customers significantly smarter and more engaged in business decisions than ever before. Manufacturers that see this and empower customers to take an active role in what, how, and when they manufacture products stand to benefit substantially from this new relationship. Customers are no longer just a revenue source, they’re a source of valuable information and inspiration.
3. The value of agility is increasing.
Agility in manufacturing trends means the ability to engineer on the fly to meet customer demands and then quickly and flexibly implement a production process with that less-is-more mentality we discussed in manufacturing trend number one.
The importance of agility in manufacturing is not altogether new. In fact, in the early 90’s manufacturers began to notice that rapid changes in the marketplace were beginning to outstrip manufacturing’s ability to adapt. It became apparent that manufacturers must adjust quickly or die.
Agility essentially involves a fundamental approach to streamlining production to maximize cycle-time reduction. An agile manufacturer engages employees and management in continuous business process improvement to reduce steps, resource consumption, and costs. An agile manufacturer is faster, more flexible, and more cost-efficient.
These are by no means the only manufacturing trends taking shape this year. Every industry segment, geographic region, and type of enterprise could probably generate a completely different list of manufacturing trends with no trouble at all. But these are certainly major ones we’re seeing that are poised to affect manufacturing this year and for years to come.