Manufacturing in 2022: Not Accelerating Smart Manufacturing? Your Competition Is

Ryan Spurr

Some people will insist on introducing new concepts or rebranded terminology with their 2022 predictions, but let’s be clear: that’s all hype, as little of significance has changed. Don’t get me wrong. There are many advancements in all sorts of enabling technologies relevant to manufacturing operations and information technology. The real momentum is less about any individual technology and more about what is fundamentally changing within the sector, and I can assure you that it’s not technology-driven.

What has changed is the culmination of business headwinds, a need for competitive advantage, and a heightened appetite for change. What does this all boil down to? Acceleration.

Digital Transformation Is Ramping Up

Before the pandemic, there was a great deal of hype around smart manufacturing. Still, most organizations were not addressing substantive technology convergence, adopting newer enabling technologies, or dramatically reshaping their business process to prepare for the future. Those that did pursue new technologies were primarily focused on small proof of concepts that by themselves didn’t scale or move the needle. 

The pandemic changed all preconceived notions and has struck a nerve in the manufacturing sector. It’s changing how leaders look at radical business change from workforce gaps to supply chain disruption to meeting demand in new ways. Starting with the pre-pandemic trade wars, workforce shortages, and growing global competition, the pandemic only catalyzed the already in-motion undercurrents in manufacturing. This is why “74% of CEOs say their organizations are pursuing large-scale digital transformation initiatives” as they grapple with offsetting headwinds, building more flexible and resilient operations, or gaining competitive advantage in the future. 

The various market forces are quickly changing how organizations address business change and technology adoption. Together, they point to the need for a larger vision, alignment with organizational change and departmental needs, and the intersection of technology at a scale and velocity we haven’t seen for decades in this industry. The adoption of new business models and processes, accompanied by enabling technology, will accelerate in 2022 as manufacturers play catchup or seek to lead.

Convergence: It’s Past Time to Integrate OT and IT

What good is accelerating next-generation technologies like sensors, machine vision, artificial intelligence, remote management, and industrial IoT platforms if manufacturers haven’t created an OT/IT integrated infrastructure? 

The stark reality is that most organizations haven’t come to terms with the infrastructure divide between operations and information technology. In fact, some in the marketplace are theorizing the days of the IT department might be numbered. Will IT play a role in the future of technology and process? Or will business units adopt entirely new strategies for their digital future? Whatever the case, the future is a fully integrated technology company despite which organizations own it. This future has integrated infrastructure and focuses on digitally native processes, workforce optimization, and client experience.

Converged networks and infrastructure will lead to expanded productivity, create environments employees want to work in, and establish new competitive advantages. The near-term future will comprise a fully integrated environment that will unlock data silos, support the scale of smart technology pilots, and create a value-chain more resilient and focused on long term optimization.

The investment must include infrastructure that meets the needs of operations (think uptime, resilience, speed, and configuration control) and information technology (access management, visibility, and threat reduction). Today, solutions exist that make convergence achievable while also meeting the vast needs of multiple departments. Convergence is one of the most stark changes underway as it lays the foundation for years of continuous improvement, and next year will only see this trend accelerate.

One Buzzword Allowed: Hyper Automation

What would a prediction be without a buzzword? While I’m not usually a fan of them, I love Gartner’s coined phrase “hyper automation” because I think it articulates the expansion of automation in today’s manufacturers, encompassing it both in breadth and depth. For organizations that rely on Lean/Six Sigma methodologies, there remains a massive amount of waste in most manufacturing processes. The headwinds associated with the post-pandemic world are great catalysts for long-term change no manufacturer should let pass by. If uncertain about whether to capitalize on automation in this time of change, you only need to look at research that shows that Industry 4.0 technologies coupled with process change can raise productivity by up to 40% and create a more flexible factory. Those organizations that capitalize on automation will outperform their peers and create sustained competitive advantage while mitigating today’s business challenges. 

Automation isn’t always about robots—many other approaches allow manufacturers to automate their way to success. The first area of expected growth is office automation and includes automating back-office processes, tasks, and low-value activities across applications, platforms, and businesses. Over time, these small automation activities (whether organization-wide or democratized to employees) will free up traditional workers to focus on higher-value tasks and fuel productivity improvements in areas of the business where it’s long been stalled.

The second area expected to grow is in the form of industrial automation. While it’s been around in various forms for decades, the modern version will see a world that breaks down traditional OT expectations connecting both industrial controls systems, facilities, workers, and different IoT technologies into a single interconnected platform. This will enable manufacturers to integrate everything to reduce human error and waste, augment workforce gaps, improve quality, and streamline operations in a whole new way that isn’t just limited to the factory. 

Expect automation to be one of the most prominent trends for many years to come. It will mitigate many of today’s business challenges while readying organizations to scale with demand in the out years.

More Integration: Data and Edge Technology

74% of leaders are looking to tackle existing data silos, whether connecting operational technology for the first time or delivering data to different internal stakeholders. With infrastructure convergence, improved industrial security, and next-generation automation solutions, the next critical element remaining is the acceleration of data acquisition 

Data acquisition is hugely important and will challenge the traditional SCADA-only or siloed operational infrastructure model. Gaining competitive advantage isn’t just about real-time visibility and insight for plant workers on the floor—it’s also necessary to bring valuable data to the supply chain, material planners, design engineers, producibility engineers, quality engineers, and other up or downstream employees.

Unlocking data across the value chain will empower employees to tackle everyday business challenges and enable entirely new solutions. Many of those new solutions will integrate and operate at the edge. Edge solutions might include machine vision or artificial intelligence or fuel advancements into how business systems and workers integrate with the factory. 

Tapping into data to drive workforce visibility will unlock new solutions typically considered a no pursuit and create a wildly more flexible and resilient manufacturing organization. With continued uncertainty of the long-term impact of the pandemic, workforce and supply chain disruptions, and a rapidly changing employee model, expect data and edge integration to be a critical focus area for manufacturers.

It Always Comes Back to Security

Security was a huge focus in 2021, mainly because cybersecurity attacks propelled manufacturing to the second most targeted industry in 2020. Security will continue to be a critical investment in 2022 for similar reasons, but due to the acceleration of the very platforms and technologies driving business change and how those technologies will introduce new risks as companies converge infrastructure and vertically integrate data across enterprise infrastructure. 

Spending surveys indicate IT budgets are increasing and forecast how companies are taking this joint investment in new technologies and cybersecurity seriously and incrementally investing 2022 budget in accounting for such risks. In traditional IT cybersecurity solutions, companies are also funding industrial security hardware, software, and services to ensure that the historical gaps in industrial security are not exposed going forward.

In the end, security is as vital as ever. Integrated OT/IT security budgets, investments into managed cybersecurity solutions, and improvements in overall security hygiene from networks to monitoring to response will all accelerate in 2022.

Invest in Your Workforce to Ensure Productivity

When it comes to the tools manufacturing frontline employees use, let’s be honest—for decades, most manufacturing operations have placed less value on the technology this portion of the workforce uses. In the past, it might have made sense. Operations were largely manual tasks filled by a never-ending supply of low-cost or replaceable labor. Technology inserted into the factory is also cost-allocated back to product costs so that less technology may support higher profit margins. 

Today and into the future, technology is quickly becoming the standard for achieving competitive advantage, critical to attracting and retaining a workforce, and an ever essential means to improving productivity. So it is crucial that we not forget about the committed and trusted workforce that remains. 

We must also recognize that job roles and the type of work we ask our employees to execute will also shift. For example, many frontline workers’ “activity is becoming more digitized and automated, which calls for higher-level skills—and upgrading existing jobs to attract the next generation of workers.”Offices may have been forever altered, but factories must continue to operate. We must recognize that people are not going away. For most manufacturing subindustries, the utopia of a “lights out” factory is unachievable. Manufacturers will continue to rely upon employees to conduct operations with or without automated solutions in place. It’s essential that we reskill, upskill, and enable the workforce with productive, intuitive, and purpose-built technologies that make it easier for them to perform their job duties while also supporting an innovative and technology-rich environment that attracts and retains the best talent.

The future is unwritten but what is certain is the manufacturing industry is under tremendous pressure to change. “A digitally progressive organization is a future-ready organization that’s able to pivot, scale up or down, and maintain stability” amongst competitive landscapes as well as disruptive forces. Those companies that take on today’s challenges with a multifaceted business process and technology investment strategy will indeed outperform their competitors in the short and long term. Connection’s Manufacturing Practice understands the acceleration of foundational technologies and investment into a mix of smart technologies is sure to focus on manufacturing