According to a recent paper from the Brookings Institute, while the U.S. manufacturing industry has struggled in general over the past few decades, the current outlook is far more optimistic. Manufacturing employment fell from about 14 percent in 1996 to only eight percent of the workforce in 2016. Analysts have blamed the majority of loss of jobs to a shift towards countries with lower labor costs and fewer regulations.
One thing that has not always been accurately measured is overall productivity. American productivity has actually improved greatly since the days of the record employment figures. Even though fewer people work in manufacturing today, they get more done.
It is true that U.S. workers might still cost more, however it is important to weigh this against the fact that technology has begun to transform the manufacturing sector to make it safer, better, and more profitable. Working with higher levels of technology takes a higher skill set and adherence to regulations, which is a perfect match for the U.S. workforce.
The Four Tech Trends That Power Industry 4.0
According to McKinsey, the term “Industry 4.0” got coined to reference the next evolution in contemporary manufacturing history. The previous three modern revolutions included the 1970's lean revolution, the 1990's rise of outsourcing, and the 2000's pioneering of automation. The term doesn't encompass earlier manufacturing revolutions, like the Industrial Revolution.
At the same time, some people call this most recent evolution as Industry 4.0 because it encompasses four basic tech trends that have enhanced manufacturing productivity:
Big data describes the ability to capture and analyze enormous amounts of data in order to help make better decisions. One example of using big data to improve production which is referenced in the McKinsey article is a mine operator in South Africa that learned to capture and use more data with existing sensors. In turn, they found unnoticed fluctuations during one of their key processes. By stabilizing the issue and adjusting their processes, they improved their productivity by about $20 million in annual revenues.
Smart, connected machines can help improve productivity and make the human workforce more productive. These devices and the information that they provide helps manufacturers make better decisions about future consumer behaviors and efficient business processes. They can also automatically do many tasks that used to require human intervention. As a simple example, a smart printer can automatically order supplies or schedule maintenance. The combination of AI, machine learning and the IoT can help reduce waste and downtime while freeing up employees to focus on those things that people do best.
Today's robots don't necessarily look like androids from science fiction movies. In fact, they often resemble the non-robot machines that they evolved from. For example, Forbes described autonomous and remote-controlled dump trucks that can eliminate the need for drivers in many hazardous situations. Robots can reduce the number of dangerous jobs that people have to do. In addition, they are usually stronger, don't get tired, and have built-in safety devices that can decrease the chance of accidents.
In its early days, manufacturers and distributors relied on 3D printing mostly for prototypes or to create bespoke or uncommon items to satisfy customer demand. Recently, improvements in this technology have made it a go-to process for producing items, mostly when it's easier to transport materials and the technology than to transport a finished product. For a good glimpse into the future of 3D printing, take a look at this video from a company called Local Motors on the U.S. Department of Energy website. in the future, manufacturers may routinely use 3D printing for everything from auto manufacturing to building construction.
Considering Tech Transformation for your Manufacturing Business?
Some manufacturers may believe that they can produce products more cheaply and with fewer compliance issues if they send factories overseas. On the other hand, more progressive companies will find that technological revolutions can help them operate more safely, efficiently, and profitably closer to where these new technologies are being developed and supported. If workers cost more, it won't matter because they can also produce more to satisfy customers and drive profits.