Posted By Jeff Moad, July 06, 2015 at 4:10 PM, in Category: Transformative Technologies
Manufacturing 4.0, with its promise of plants populated with smart, connected machines, conjures an alluring vision of the future. Armed with loads of real-time data generated by ever-more-intelligent machines, manufacturers will be able to address potential production disruptions even before they happen. And more automated and agile work cells and production lines will be able to quickly adjust output to match changing demand signals.
There’s just one problem: Getting from here to there. As members of the Manufacturing Leadership Council often argue, most manufacturers today are constrained by a legacy of production machines that were never designed to be smart, sensor-enabled, or connected. Most manufacturers aren’t about to replace this very expensive legacy asset which, when purchased, was expected to be utilized for years, if not decades. And most don’t know how to assess and cost-justify the smart retrofits that legacy machines would require to play in a M4.0 world.
Wouldn’t it be great if manufacturers could carve out test beds where they could invest in and learn from new, smart, M4.0-era equipment, machines, and processes before attempting to incorporate them more broadly across global production networks?
It turns out that an increasing number of U.S. manufacturers may have an opportunity to do just that, if they play their cards right. That’s because, according to recent government figures, there’s been a dramatic surge recently in manufacturers investing to build or expand plants.
The U.S. Census Bureau last week reported that nonresidential manufacturing construction spending in May rose to $89.69 billion, a 70.1% increase over manufacturing construction spending in the same period a year ago. The Census Bureau said the current level of nonresidential manufacturing construction spending is at an all-time high.
“The pace of increase in construction outlays for manufacturing structures is breathtaking over the past few months,” Stephen Stanley, chief economist at Amherst Pierpont Securities, was quoted as saying. “This is a very positive sign for the manufacturing sector, as it suggests that firms see sufficient demand going forward to justify updating and/or expanding their physical facilities.”
Growth in manufacturing-related construction spending far exceeded the 8.1% jump in overall non-residential construction spending for May.
At the same time, U.S. manufacturers are also planning to significantly increase hiring. Industry researcher Markit Economics recently found that, in June, U.S. manufacturers recorded the fastest payroll headcount increase since September 2014.
There are several possible explanations for the surge in manufacturing construction spending and hiring. Despite the U.S. dollar’s continued strength, manufacturing labor costs in China continue to rise, and as energy costs in the U.S. remain relatively low, the cost profile of U.S.-based manufacturing is seen as being more competitive.
These are all positive trends. But the question is whether the current surge in spending by manufacturers will end up being just another temporary uptick, or if manufacturers will chose to use the expansion to gain the kind of experience with M4.0 concepts and technologies that can deliver long-term competitive advantage.
Some manufacturers appear to be trying to do just that. Earlier this year, for example, General Electric said it will invest part of the $200 million it is spending on a new plant in Chakan, India, to build a test bed where it will try out technologies intended to create what the company calls “Brilliant Factories.”
Closer to home, another example is MBX Systems, a small Chicago-based maker of computer server appliances that last year opened a new facility in San Jose, CA, in order to better serve larger customers. To support that initiative, MBX completely rethought its production environment, implementing a series of large, smart super cells that allow MBX to simultaneously build and test many more servers while monitoring and controlling processes remotely. MBX, a top 2015 Manufacturing Leadership Awards winner, quadrupled its total build capacity while quintupling the number of servers it is able to assemble and test at the same time.
The lessons presented by manufacturers such as GE and MBX is that, with the advent of M4.0 technologies, new investments in capacity and people must be accompanied by the willingness to embrace new ideas. This is not the time for business as usual.
Written by Jeff Moad
Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit
Very interesting article. When you write:
"There’s just one problem: Getting from here to there. As members of the Manufacturing Leadership Council often argue, most manufacturers today are constrained by a legacy of production machines that were never designed to be smart, sensor-enabled, or connected. Most manufacturers aren’t about to replace this very expensive legacy asset which, when purchased, was expected to be utilized for years, if not decades. And most don’t know how to assess and cost-justify the smart retrofits that legacy machines would require to play in a M4.0 world."
Something that is addressing that challenge with legacy production machines is MTConnect. As stated at the MTConnect website, "MTConnect is an open, royalty-free standard that is intended to foster greater interoperability between devices and software applications. By establishing an open and extensible channel of communication for plug-and-play interconnectivity between devices, equipment and systems, MTConnect allows sources to exchange and understand each other’s data. This common communication is facilitated by XML and HTTP technology to provide real-time data from throughout a factory. This common communication empowers software developers to implement applications aimed at providing more efficient operations, improved production optimization and increased productivity.”
MTConnect is real and is becoming the defacto standard for connecting to machine tools. I would be happy to talk to you more on MTConnect and its real life uses.