Digitizing manufacturing’s future

The United States is in the midst of another industrial renaissance. Technology and advances in software and hardware are driving a comeback for manufacturing, with increased productivity and promise for renewing aging infrastructure.

Smart data and a push for high-tech are transforming the industrial landscape, with widespread dedication to productivity, efficiency, speed and quality.

Just as industrialization transformed the United States into a global power in the late 1800s, leading-edge trends in advanced manufacturing are driving the U.S. economy forward today in another phase now being called Industry 4.0. To perpetuate this revolution, infrastructure and policy must keep apace with technology.

Today’s volume of data, computational power and connectivity is unprecedented, with huge benefits for industry. Last year, Accenture concluded that an industrial-scale version of the Internet of Things could add $14.2 trillion to the world economy in the next 15 years.

Sectors, companies and governments are forging partnerships to reap the full benefit of this potential. President Barack Obama will join German Chancellor Angela Merkel to open Hannover Messe 2016, marking the first time a sitting U.S. president has participated the world’s largest industrial technology fair.

“Someone from back in the 1940s could not have foreseen the science fiction-like direction the industry has taken,” said Siegfried Russwurm, chief technology officer and member of the managing board of Siemens AG. “We are truly entering a new industrial age—we are not just talking about evolutionary steps and the next big machine tool—but something on a far more exciting level: the merging of the real and virtual worlds. This meshing of real and virtual industry can operate with unprecedented creativity, versatility, speed and cost effectiveness,” Russwurm said. “The result is a fully flexible production line that can change the configuration of products routed through the industrial process without interruption.”

The digital transformation is occurring across industries—from energy and computing to automotive, transportation, medical manufacturing, aerospace and more. An interconnected relationship between users and ‘things’ is popping up all over—in big data, virtual design, industrial software, intelligent automation via sensors and robotics, cloud technology, and smart utilities and transportation systems.

When all these components work together to automate and digitize processes, industries and companies can deliver a better experience for end users. “It’s not just B to B or B to C anymore, but it’s machine to machine and machine to human, and what is capable now with all this data,” said Eric Spiegel, president and CEO of Siemens USA.

“The data is not just being stored somewhere, but it is going to be used to optimize businesses and create new business models, to really drive more of a revolution.”

It’s a pivotal moment for companies, for the U.S. economy and for consumers. “In the new world of advanced manufacturing, factor costs like labor and energy are going to become less and less important,” Spiegel said.

Instead, “the critical issues are, how do I keep driving faster innovation and how do I get the right skilled labor force? There will still be a lot of manufacturing jobs in the future—just fewer on the shop floor and more in engineering, design, computers, programming and software development,” Spiegel said.

There is great potential in further automating and standardizing manufacturing processes. For these innovations to be widely adopted and usable by consumers, manufacturing infrastructure needs to keep moving to the next level of efficiency and modernization, with newer equipment, facilities and digital resources.

A 2015 McKinsey survey of manufacturing leaders found that 78 percent of suppliers are prepared to embrace digital technologies in their industrial applications. The same study found that almost half of today’s machines still need to be upgraded or replaced for manufacturers to reap the full potential of Industry 4.0.

As processes become more automated and streamline manufacturing and daily life, this evolution produces an ironic side effect of humanizing industry—the more that technology enables industrial processes, the more humans can interact with machines, and evolve as a workforce and as a society. The end result is a better experience for customers—an overriding objective for manufacturers.