By Scott Renner, Global Director of Industrial Manufacturing at Oracle

The changing nature of products and customer engagement in today’s evolving world is creating new industry segments and reinventing, sometimes even eliminating, others. In this fluid environment, manufacturers have become acutely aware of the risks of being left behind if they do not master emerging technologies. But manufacturers need a compelling reason based on business gains and/or competitive pressures in their markets to make this change. Manufacturing has also been slow, expensive to change, and disastrous when things go wrong. Factory infrastructure has historically required large investments with long capitalization periods. So why should companies start investing in the “factory of the future” now?

Customers want to get personal

The need for instant gratification, personalization, and rising expectations of individualistic product attributes are pushing product engineering and manufacturing to new levels of customized complexity. The customer is changing what they want from products, how they want to consume them and what relationship they have with the manufacturers who produce them.

To maintain costs and product quality, manufacturers must increase their effectiveness by learning to combine factory automation with process flexibility. In the factory of the future, conversion processes need to go beyond automation and become autonomous. This new factory pushes past the simple replace labor with a machine scheme by deploying intelligent machines that will make decisions in more flexible and unstructured ways.

The Evolution of Factory Intelligence

Many emerging technologies will be deployed to help create these enhanced capabilities. Artificial intelligence will develop so that it transforms our current understanding of product configuration, production scheduling, and real-time decision making for optimized profitability. Digital twin capabilities will evolve as the ultimate factory management tool, where the physicality of the factory is combined with past and current data attributes of product and process to assess impacts on throughput, quality or product/machine changeover. The sophistication of the digital twin becomes the instant-replay of production sequences for analysis. IIoT will be combined with 5G cellular connectivity to go beyond creating a central repository into data lake for analysis. Data shared amongst the machines turns into intelligence that ensure that manufacturing assets operate as a balanced system.

The need for manufacturing flexibility, responsiveness, and efficiency will also change the physicality of workspaces. Machines are now learning to work alongside human labor and their enhanced capabilities will be the foundation of the modular production facility where manufacturing processes can be configured on an order by order basis. Ultimately these dynamics and technical capabilities will create factories that can autonomously recognize demand, configure a production plan, assemble the necessary assets for the conversion of material and react to real time feedback within the factory ecosystem.

Product Innovation Will Depend on Advanced Environments

The digitization of the economy is also changing the nature of products. Data will no longer be a by-product of the manufacturing process, but will become a co-product that delivers increasing economic value to both the customer and manufacturer. Physical, digital, and social capabilities become parts of the same product, inevitably increasing the complexity of the product design, builds, new systems, and collaboration with ecosystem partners.

Technical and economic breakthroughs in new materials will revolutionize product design and application and whole new industries will rise up to support them. The advanced digital nature of future products is a given, but their changing physical characteristics may have even more of a transformational impact on the manufacturing industry. The adoption of new material will be driven by the transitional need for product enhancements, environmental and energy efficiency forces — they will also create new market spaces for competitive entrants.

This is currently happening most acutely with additive manufacturing where the potential to revolutionize manufacturing is just beginning to be realized. Finding initial applications in prototyping, 3D printing will continue to migrate toward the center of production facilities and eventually be deployed in the heart of the manufacturing line. This will begin to create the most efficient just-in-time delivery possible and be a key enabler for product individualization.

Globalization Favors the Tech-savvy

Globalization has been an economic dynamic that has affected manufacturing since WWII. Historically, globalization was mostly about international trade agreements; however, global access also meant lower labor rates. Since the 1970’s, factory assets and jobs have shifted to developing countries.

Today’s manufacturing environment is rapidly evolving from the goal of minimizing direct labor costs and maximizing the economies of scale, to the potential elimination of many direct labor costs and the maximization of market driven product customization. Cheap labor has stymied the investment in product capability for decades, but as the need to be closer to markets is becoming a prominent driving factor, manufacturing will slowly migrate away from large centralized factories and towards smaller more agile networked producing assets. The shrinking and redistribution of factory assets will simultaneously create repatriation of manufacturing to developed economies, and maintain/expand satellite facilities for markets abroad.

A Hyper-Connected Business

The exponential adoption of advanced technologies presents a dizzy array of potential changes and investment demands for manufacturing in the years ahead. Huge datasets, AI and autonomous production will combine to execute complexity that extends beyond the human capacity to manage in real time. A virtual facsimile of the physical factory will become the interface to production as physical execution becomes increasingly removed from direct human management decisions and intervention.

The Future is Closer Than You Think

The advanced factories of the near future have already begun their digital transformation and early adopters are beginning to create a competitive advantage. By investing in emerging technology, companies are creating technical expertise and critical digital transformation culture they need to succeed and thrive in the years ahead.

The future may look far off, but it will be here before we know it. Get a preview at Hannover Messe — Oracle, along with its partners Accenture, Bosch Rexroth, BISTel, Mitsubishi, Essentri, FESTO, GemDT, Inspirage and Promatis, will demonstrate it today.

This is a condensed version of a blog originally featured on the Manufacturing Leadership Council website. To view the full article, click here.