Manufacturing is changing. Our 2016 Manufacturing Report revealed an industry in the state of change, preparing for the next revolution. Its image is getting an uplift, cyber security is growing more complex, and distribution is becoming more focused on third-party services. Let’s see how closely the year kept up with our predictions.
The Manufacturing Picture Became a Reality For Students Across the Country.
We spoke about how manufacturing is becoming more clean, complex and based on new technologies. The old-age image of dirty floors, intense labor and sweat-laden work is on its way out. In October, numerous educators, organizations and business leaders took to the school system and public to raise awareness about what it means to work in manufacturing today as part of Manufacturing Day. The teaser video to American Ingenuity, as featured in this blog post, took the ideals of a clean, crisp and modern environment from the drawing board into classrooms and the minds of the next generation.
Part of the rationale behind Manufacturing Day goes back to changing how the public perceives the industry. Many continue to have the old images of what it means to work in manufacturing in their minds. Meanwhile, people want well-paying, challenging, exciting and world-changing careers, explains Polymer Ohio Manufacturing Services. Thus, more young people will be enticed to enter the field, providing relief to the growing manufacturing skills gap.
The world of manufacturing is only getting a better, more clean and enticing image. In fact, the following infographic sums up how advanced manufacturing has become, and it puts the pre-modern stereotypes to rest.
As We Predicted in Our Manufacturing Report, Cyber Security Did Grow Stronger.
With claims of hacking the election still permeating the internet, manufacturers are looking upon 2016’s cyber security improvements with even greater scrutiny. In our manufacturing report prediction, we defined good penetration testing as an essential component for more manufacturers to follow this year. Today, we must also face uncertainties placed by terrorist organizations. Consequently, manufacturers are also rethinking their budgets for cyber security.
In a 2016 manufacturing report, created by Sikich, the incidence of cyber-attacks on manufacturers grew more than attack prevalence rates on any other sector of the economy. In addition, automotive manufacturers were affected most, accounting for 30 percent of all cyber-attacks in 2015. Unfortunately, official statistics for 2016 are not yet available, reports Industry Week. However, the trend appears to show an increase in attacks on automotive and chemical companies for this year.
While we assumed more companies would work on penetration testing, only 33 percent did. Moreover, this statistic only focused on annual penetration testing. Yet a vulnerability could crop up almost overnight, so penetration testing needs to be more year-round, not an annual event.
There are other solutions to shoring up manufacturing cyber security. For example, blockchain technology might help keep different consumers’ and companies’ financial data secure. However, it is only one piece of the puzzle, and manufacturers must stop simply identifying risks in cyber security. In other words, manufacturers cannot mitigate risks without actually doing something, and while 90 percent of manufacturers recognize the importance of cyber security, most are still falling behind the curve in improving it, explains Ian Write of Engineering.com. Ultimately, manufacturers did increase cyber-security budgets by 77.3 percent, reports Qatalyst Global, but thorough penetration testing on a recurring, frequent basis seems to still be out of reach.
Manufacturers Did Look Towards Logistics Efficiency to Stay Competitive.
The prediction in our manufacturing report called for increased utilization of third-party logistics (3PLs) and more smart systems to stay competitive, and we literally hit this one on the head. Across the internet, more companies report use of logistics service providers than ever before. Amazon’s order fulfillment network has expanded to include grocery stores, Prime hubs and even two-hour delivery capabilities, reports the IQMS Manufacturing Blog, giving the e-commerce giant an unparalleled competitive advantage. Since most small and medium-sized businesses cannot realistically expand to the scope of Amazon, they must take advantage of 3PLs wherever possible. But the demand for outside expertise is not limited to small retailers.
Target took the bold step of hiring previous supply chain experts from Apple and Amazon to address problems maintaining and managing inventory, a sentiment echoed in the needs of a digital enterprise and data-driven supply chain, as explained by Stefan Schrauf and Phillipp Berttram of Strategy & PwC.
The need to unlock hidden potential without investing significant resources into new warehouses and distribution networks has never been higher. Following an organized structure, these five success factors are all essential components to creating an effective relationship with outsourced logistics:
- Re-evaluation and establishment of new end-to-end processes to create a digital supply chain.
- Organization and skills to ensure the new digital supply chain operates at maximum efficiency.
- Performance management to maintain production and efficiency.
- Collaborating with other parties to integrate a vast pool of suppliers, distributors and warehouses.
- Technology, such as machine-to-machine connectivity, including the Internet of Things, to make more decisions available in real-time and adjust product as needed.
Manufacturers Stayed the Course, But Jostled Along the Way.
Overall, manufacturers were aligned with many of our predictions closely, but our full expectations were not always attainable, such as slower progress in cyber security than anticipated. Realistically, the predictions represented an ideal year for manufacturing, but the turmoil of the election and disarray in the stock market, thinking back to the fluctuations in China and the U.S., fueled problems in manufacturing.
Fortunately, the election is over, and next year’s predictions are much more likely to come to fruition. Of course, there could always be that one breakthrough that redefines manufacturing and modernity, and if that happens, we will shall see how far the industry will grow in 2017.