24
January
Smart Manufacturing Trends in 2024
January 24, 2024
In Blog
The manufacturing industry is undergoing significant changes due to the rapid advancement of technology and the evolving nature of the global economy. Smart manufacturing technology is expected to be at the forefront of manufacturing industry trends in 2024, following a turbulent few years. This is because facilities continuously seek new and creative ways to increase productivity and efficiency while preparing for unforeseen events and interruptions. Though it suffered greatly during the global pandemic, the manufacturing industry is gradually recovering, with a predicted annual growth of 3.57% between now and 2028.
The manufacturing industry will receive significant support from technology in 2024 as it prepares to face new challenges. Many manufacturers aim to persist in pursuing their digital transformation goals, even though some may be contemplating suspending investments due to the challenging business environment. They are focusing on developing resilience throughout the organization and constantly seeking ways to improve efficiency. Employing generative AI, one of the newest tools in the toolbox, and exploring the industrial metaverse are among the strategies that businesses seem to be adopting to enhance their operations the smart factory approach.
In this blog post, we will explore these trends and discuss how these can enhance your operations, strengthening the stability and health of your company.
Trends in Smart Manufacturing by 2024
Manufacturers are exploring ways to fortify the resilience of their businesses and shield them from external economic shocks as the industry continues to recover. The “new normal” and recovery undoubtedly take center stage in the smart factory trends of 2024, but they also build on technological advancements and breakthroughs that have long been in progress, independent of any other developments that may have been occurring globally.
In this post, we’ll explore the main trends influencing the manufacturing sector in 2024, along with methods for overcoming these obstacles and seizing the opportunities they bring. Among these developments in smart manufacturing trends are:
Smart Factories Transforming Shop Floors and Operations
A smart factory is an automated, highly advanced facility that utilizes technology to operate much more precisely, accurately, and flexibly. Comparing a smartphone to a conventional phone is analogous, as the former can perform many more tasks far more effectively.
A common phrase used in discussions about “Industry 4.0,” or the fourth industrial revolution, is “smart manufacturing.” The first industrial revolution focused on using steam and water power for mechanization. The second dealt with electrical power and assembly lines in mass production. The third utilized electronics and computer technologies to automate production. The fourth step now revolves around digitizing everything using intelligent, self-governing technologies.
Traditional manufacturing ecosystems and supply chains have been relied upon by businesses for many years. Still, the COVID-19 pandemic and other global issues exposed these systems, highlighting the need for a nimbler approach.
By 2032, the size of the worldwide smart factory market is projected to be approximately USD 321.98 billion, expanding at a compound annual growth rate (CAGR) of 9.52% between 2023 and 2032.
Businesses that invest in smart manufacturing technologies and digital transformation can gain significant business advantages, such as:
Higher Caliber of Product
Product quality can be significantly increased using AI-powered automated procedures and quality control techniques. Consistent performance ensures the consistency of products, making machines less prone to errors than human operators. Furthermore, machine learning can anticipate and identify flaws or errors before they become critical.
Better Efficiency
Smart factories can optimize production lines through the use of automation, machine learning, and artificial intelligence. They can enhance operational effectiveness, reduce waste, and minimize downtime. Analyzing data in real-time makes it easier to identify inefficiencies or bottlenecks that can be swiftly addressed.
Long-Term Sustainability
Smart industries can also contribute to sustainable development objectives. The environmental impact of an industry can be reduced by utilizing automation and AI optimization to better manage energy and resources. Predictive maintenance further allows equipment to be maintained at maximum efficiency, thereby reducing overall energy consumption.
Better Decision-Making Enabled by Digital Twin Technology and Predictive Maintenance
For top manufacturers, the cost of downtime due to ineffective maintenance can be exorbitant. Significant facilities, for example, lose 323 production hours annually, with the average cost of lost income, fines, personnel idle time, and line restarts amounting to $532,000 per hour or $172 million annually per facility.
Predictive maintenance can address this issue. By employing tools and techniques for data analysis, predictive maintenance can identify potential flaws in machinery and processes, allowing you to address them before they cause failure.
Predictive maintenance offers significant benefits, including a 25–30% increase in overall equipment effectiveness (OEE), a 70% reduction in downtime, and a 40% decrease in maintenance expenses. The predictive maintenance market is projected to grow at a compound annual growth rate of 30.6% to reach USD 15.9 billion by 2026.
Another trend known as “digital twins” has emerged with the development of Artificial Intelligence (AI), the Internet of Things (IoT), and big data.
In the concept of “digital twin manufacturing,” a digital duplicate or “twin” of a natural manufacturing system or process is utilized. This digital model achieves real-time simulation of the behavior and performance of its physical counterpart, providing insightful information and facilitating improved decision-making.
By 2027, the market for digital twins is projected to reach $73.5 billion.
Reshoring Gains Momentum Amid Supply Chain Issues
Supply chains continue to face disruptions caused by global challenges such as the COVID-19 epidemic and the conflict in Ukraine, and these issues show no signs of resolution in the near future. Manufacturers, compelled to navigate through these challenging circumstances, are increasingly adopting reshoring strategies, bringing production closer to home.
Advantages of Reshoring:
Decreased Transport Expenses
Production taking place domestically results in a significant reduction in the expenses and duration of international product transportation. Reshoring benefits automakers like Tesla, allowing them to manufacture vehicles closer to their primary market, thereby lowering logistics costs and time.
Control of Quality
Reshoring allows greater control over production procedures and closer oversight, ensuring a consistently high-quality final product. For instance, Apple has returned part of its manufacturing to the United States to strictly oversee the quality of its products.
Time to Market
Domestic manufacturing can significantly shorten the lead time from production to market, enabling quicker responses to market developments. The adaptability of restored manufacturing was evident when many US corporations pivoted to locally produce ventilators during the COVID-19 outbreak in response to unexpected demand.
Local Employment Generation
Reshoring contributes to regional economies by generating jobs. For example, General Electric moved some of its appliance manufacturing operations back to Kentucky, positively impacting its economy and creating several hundred new jobs.
As businesses strive to become less susceptible to supply chain disruptions from global crises and aim for greater resilience, expect this trend to continue.
Addressing Labor Shortages: Manufacturers Reskill Employees and Raise Wages
Manufacturers face a competitive labor market and elevated employee turnover rates in 2023 as they adapt to new talent models.
A study conducted by Deloitte and the Manufacturing Institute projects that there could be 2.1 million unfilled manufacturing jobs by 2030, with potential costs of up to $1 trillion associated with these vacancies alone.
Significant staff turnover is evident, with voluntary separations surpassing layoffs, exacerbating this trend. Due to this persistent labor scarcity and the compounding effects of supply chain limitations, operational efficiency and margins are suffering. Smart manufacturing systems are employing the following tactics to recruit and retain talent to address these issues:
- Raising Income: Manufacturers are considering increasing compensation to attract and retain qualified workers as the talent shortage becomes more apparent. According to a poll conducted by The National Association of Manufacturers, approximately 75% of manufacturers planned to increase pay by 3% in 2022.
- Upskilling and Reskilling: The workforce must possess strong technical and digital skills due to the growing use of digital technology in manufacturing. According to workers under 25, career opportunities (65%) and training and development (69%) are the main reasons people continue with their current workplace.
Manufacturers are expected to prioritize reskilling projects. These initiatives may involve collaborating with academic institutions to acquire digital expertise, partnering with startups to access new technology and talent, and organizing ongoing training programs to enhance employees’ abilities.
Moreover, according to the Deloitte survey, 75% of respondents in the manufacturing sector stated that finding and retaining current employees is their most significant challenge. As a result, this is expected to remain a top priority in 2024.
Industry Push for Carbon Neutrality from Manufacturing Companies
The manufacturing and industrial industries generate five percent of global carbon emissions and utilize fifty-four percent of the world’s energy resources, according to the World Economic Forum.
A quarter of Fortune Global 500 firms have already pledged to achieve carbon neutrality by 2030, among the many corporations that have made this commitment. Customers who care about the environment are primarily responsible for this, as they seek environmentally friendly items and support businesses that share similar beliefs.
Benefits for Organizations Committing to Carbon Neutrality in the Modern World
Enhanced Brand Worth and Reputation
A manufacturer's brand value and consumer loyalty grow when they commit to becoming carbon neutral, showcasing their dedication to environmental responsibility. Patagonia is a well-known outdoor apparel brand with a solid reputation for environmental stewardship, offsetting its carbon emissions and supporting sustainable practices.
Operational Efficiency and Cost Savings
The transition to carbon neutrality often involves adopting energy-efficient technology and streamlining procedures, reducing energy usage and cost savings. Interface, a multinational maker of modular flooring, provides an example of this by implementing energy-efficient measures, resulting in a 96% reduction in carbon emissions and significant cost savings.
Gaining Entry into Novel Markets and Clientele
Achieving carbon neutrality enables producers to connect with consumers who prioritize sustainability and enter emerging markets. The global consumer goods giant Unilever experienced increased market share and achieved carbon neutrality throughout its operations by meeting consumer demand for sustainable products.
Operational Efficiency and Cost Savings
The transition to carbon neutrality often involves adopting energy-efficient technology and streamlining procedures, reducing energy usage and cost savings. Interface, a multinational maker of modular flooring, provides an example of this by implementing energy-efficient measures, resulting in a 96% reduction in carbon emissions and significant cost savings.
Successful Strategies Adopted by Specific Manufacturers in Making Changes
Businesses have implemented a range of tactics, from restructuring their organizational structures to establishing significant alliances, to overcome challenges related to the electrification and decarbonization of their product lines. Some of their methods include:
- Working Together to Reduce Carbon Emissions: Several manufacturers are forming joint ventures and external collaborations to meet strict emissions regulations for their products. They make notable progress in product decarbonization by identifying critical needs and seeking outside partners with the expertise to address them. For example, a well-known provider of industrial automation has partnered with a clean energy solutions provider to electrify mine haulage vehicles with energy storage devices, showcasing the value of strategic cooperation in promoting sustainability.
- Backing Net-Zero Emissions: Some producers are investing in electrification and other low-carbon or renewable fuel technologies for their products to achieve net-zero emissions. A major engine manufacturer, for instance, is investing over $1 billion in US dollars at its US facilities to support engines running on low-carbon fuels like hydrogen, aligning with its broader objectives for clean energy.
- Constructing a Niche Vertical: Manufacturers are electrifying their product lines, and some are establishing specialized divisions for this purpose. One of the world’s top producers of mining and construction equipment, for example, has created a dedicated vertical to develop zero-emission technologies and products, such as electrified drivetrain product lines and modular, scalable advanced power sources, to assist clients in meeting their climate-related objectives.
- Entering Adjacent Markets with Purposeful Expansion: To keep up with electrification trends, several manufacturers are focusing on nearby markets. Making strategic investments in these areas can facilitate growth and prepare for new opportunities. For instance, a leading US fabrication company prioritizes capital investment in lightweight materials to support client expansion in EVs, energy infrastructure, and renewables.
The Visionaries Will Shape the Future of Manufacturing
Visionary leadership and a proactive mentality will be essential to embrace the trends of Smart Factory 4.0. Manufacturers, to maximize efficiency and gain a competitive advantage, need to understand the potential of smart factories and leverage cutting-edge technology.
Utilizing digital twin and predictive maintenance technologies enables manufacturers to make informed decisions and reach new levels of efficiency. Prioritizing carbon neutrality demonstrates a commitment to sustainability, attracting eco-aware customers, while reshoring offers an opportunity to reduce supply chain risks and enhance resilience.
By implementing these trends and adopting a forward-thinking strategy, manufacturers can establish themselves as leaders in their industry and guide the sector toward prosperity.
Smart Factory MOM solution, by eWorkplace Manufacturing, is definitely covering all the bases to ensure manufacturers are moving on the right path to make their factories “smart.” They also provide comprehensive implementation services that ensure business transformation by maximizing technology, processes, and resources.
Our tried-and-true implementation process, coupled with domain and industry experience, ensures that your intended business results are understood and realized. Our meticulous implementation services are designed to minimize the likelihood of project failure and guarantee successful project delivery at a predetermined cost. We customize our strategy to match your specific demands after careful collaboration with your team to determine your unique business requirements.
Schedule your free demo of the Smart Factory MOM solution today and see how it can benefit your organization to move fast in the smart manufacturing race.
