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Several “megatrends” affecting manufacturers and the world at large will begin unfolding in coming years. University of Cambridge Judge Business School Dean Dr. Mauro F. Guillen made this prediction during a presentation at the recent Manufacturing Leadership Council’s “Manufacturing in 2030: The Shape of Things to Come” event.

Three trends: “Three kinds of trends … are coming together to produce a very different situation by the year 2030,” said Guillen, the author of “2030: How Today’s Biggest Trends Will Collide and Reshape the Future of Everything.” He categorized them as “population trends, trends about emerging markets and technological trends.”

Here, we break down some of the highlights from these three umbrella trends.

Durable-goods demands will start earlier—and extend later: Owing largely to immigration patterns, large durable-goods purchases will, on average, start to come earlier in life, Guillen said.

• Thus, in coming years, durable-goods manufacturers can probably expect their customer demographic to broaden to include younger people.
• At the same time, Guillen said, given that people are living longer and better, consumers will wield purchasing power for longer than they did in decades past. “There is a massive concentration of wealth in the upper age groups,” Guillen said. This will mean greater demand for certain goods, such as robotics capable of caretaking, later into people’s lives.

Purchasing-power centers will shift: Currently, the U.S. and Europe are the world’s largest consumer economies, but by 2030, those distinctions will belong to China and India, Guillen said. And by 2040, India will have eclipsed China in this regard, due to population growth.

• While older people will hold onto their purchasing power, younger consumers will hold sway for larger buys as they spend their money on homes, cars and other major purchases.
• Meanwhile, wealth accumulation will continue to grow everywhere in the world, he said, fueling the appetite for manufacturers’ goods.

Emerging markets will overtake developed ones: Manufacturers can soon expect to see emerging markets become larger than developed ones, Guillen said.

• That trend will mean a shift in manufacturer focus away from the U.S. and Europe and toward Africa and India. Said Guillen, “Sooner or later consumer markets will gravitate toward where the population is.”

The last word: Guillen’s main point of advice for manufacturers? To “identify the wave that you want to surf and take that opportunity, go with that wave. It’s so much better than going against the prevailing winds. You’ll be aligning yourself with the global economy.”

A radical shift in consumer behavior accelerated by the COVID-19 pandemic has exponentially expanded the wide-scale adoption of e-commerce and online purchasing. As consumers increasingly make online purchases for standard items like groceries and household supplies, this shift is likely to become permanent ― creating a significant impact on warehouse operations and creating new opportunities for innovation.

Early winners so far in this business environment have been the technology-embracing early adopters such as Amazon and Ocado, who have innovated with robotics and software to create more efficient, durable supply chains. However, there’s room in this space for all players who are prepared to adopt warehouse automation and robotics. It’s likely that those who don’t participate in this disruptive innovation risk being left behind.

Adapting to Warehouse Challenges

Traditionally, robotics has been applied in repeatable, fixtured applications such as those on automotive assembly lines. Now, artificial intelligence (AI) and the Internet of Things (IoT) are enabling breakthroughs in robotic perception and complex decision-making in real time. This allows robotic technologies to operate effectively in more complicated, unstructured environments such as the warehouse and distribution networks.

Due to the inherent modularity and scalability of robotics systems for picking, sorting, and palletizing, organizations of all sizes can reap the benefits of these innovations while making warehouse operations more efficient, cost-effective and safe. The ability to add solutions with a high return ROI, intermixed with manual processes, make them ideal candidates for investment in existing manual facilities.

The Robotics Opportunity

The rise of e-commerce has stressed existing parcel and distribution networks to their limits. Faced with a huge need for the efficiencies and increased capacity that warehouse automation can fill, a new breed of intelligent robotics solutions has started to go mainstream. The scalability of these solutions makes them a good fit for an industry that is still mostly manual, and they are a logical next step. For many enterprises, warehouse automation adoption is lagging significantly or absent altogether. According to DHL research, 80% of warehouses remain manually operated. Another recent survey indicates that the greatest investments to date are in conveyance (63%), while robotic palletizing and picking are still very low (15% and 8%, respectively).

Major e-commerce companies know that nimble, automated supply chains are key to meeting demand and staying ahead of the competition. To keep up with these major players, smaller and emerging e-commerce companies must take the right steps to automate their warehouse supply chains too.

Every Season is Peak Season

Prior to the pandemic, e-commerce and logistics were geared toward the peak season (early November through January). Distribution networks would ramp up for peak, then struggle with underutilized capacity for the remaining nine months. In 2020, the peak began in mid-March and hasn’t slowed. The challenge now for many smaller enterprises is how to innovate and grow within a peak environment that never subsides. Enterprises no longer have the luxury of a downtime during which to upgrade facilities to increase capacity and integrate new technology.

The e-commerce giants have an easier time integrating new technology organically because their technology stacks are already built. Smaller enterprises must work to bridge this chasm. One of the advantages of advanced robotics is that it can be integrated into operations without taking down a system or facility. Robotics can be added little by little, in a modular fashion, without major disruptions.

The Holistic Approach

There is now a significant need among both types of businesses to explore the best ways to develop, productize, and scale solutions across their entire distribution networks. By adopting a customized holistic solution that addresses key challenges and provides insights across their IT and warehousing infrastructures, companies now have an opportunity to drive continuous improvements and create flexible, robust supply chains that can keep up with increasing customer demands.

“We are here to put our shoulders to the wheel of progress,” MLC Co-founder David R. Brousell told the hundreds of live and virtual attendees in his opening remarks at the MLC’s new Manufacturing in 2030 event, which opened in New Orleans earlier today.

“We can’t be certain about what tomorrow will bring, let alone what might be in 2030,” he continued. However, “we can project or extrapolate based on current trends and conditions, with a reasonable amount of probability, what the shape of manufacturing will look like in 10 years’ time.”

Well before the pandemic, noted Brousell, manufacturing companies were altering their organizational structures, in part due to the influence of technologies that were increasingly empowering more people with information, shifting from hierarchical, command-and-control models to flatter, more collaborative ways of organizing people and processes. As a result, manufacturing is now harnessing its intellectual capital much more effectively than ever before.

“All around us, conventional notions of what can be accomplished in production as we understand the potential of new technologies, how we arrange work and processes based on new organizational forms, and how we leverage the creativity of our people, are being reimagined,” he said.

There will continue to be challenges ahead, of course, from continued global disruptions, to redefining the relationship between humans and machines, to the increasing urgency of combatting climate change and how to create more sustainable, digitally enabled, circular business models. “Competitive advantage will flow to the companies that master these challenges,” he added.

But there will also be massive opportunities too. In the decade ahead and beyond, Brousell believes that factories and plants will be distinguished by a now evolving set of technological, organizational, and leadership characteristics that will set them apart from facilities of the past. “The extent and depth of change ahead of us will be profound”, he predicted.

That’s why events such as Manufacturing in 2030, and the MLC’s upcoming year long M2030 Project during 2022, is so vitally important to help manufacturers explore, understand, and plan for, the shape of things to come for the manufacturing industry over the next decade.

“If we do things right in the next 10 years,” stressed Brousell, “we have the opportunity to create the greatest engine of manufacturing production humankind has ever seen.”

Many manufacturers are ahead of the curve when it comes to digital 4.0, but not all may know about the numerous potential benefits of digital twins. A virtual replica of a physical product, asset or system, a digital twin makes the physical computable. It offers manufacturers a range of advantages, including better business visibility, increased product reliability and new revenue streams.

Is digital twinning right for your business? Below are some key considerations to weigh as you think about adopting this advanced manufacturing technology.

1. Digital twins are not complete representations of a product.
   Digital twins are akin to algorithms. They are highly reliant on data input, and since it’s nearly impossible to turn every aspect of a physical product into data, digital twins are not precisely twins, though they are pretty close. A digital twin is created by outfitting a product with sensors that can track functionality. These can then be used to study simulations of the product’s performance. So digital twins are made up of models and data, but their complexity is reliant on the data used to create them.
2. Digital twins evolve over time.
   As a product moves through its lifecycle, the information in its digital twin will shift in response to its performance, technical configurations and environmental parameters.
3. Information and data are key across a product’s lifecycle.
   For a digital twin to remain relevant and useful over time, make sure you are utilizing a data structure that can be easily used and exchanged over different systems and applications.
4. You can use digital threads to enable digital twins.
   Digital threads are a communication framework that link all elements of a product’s data, from design to obsolescence. Using them reduces the complexity of digital-twin implementation and increases digital twins’ accuracy.
5. Transparency is critical.
   Identify, classify and correlate data across various sources so there’s transparency and automated information-identification processing. These are crucial for smooth digital-twin deployment.
6. Open format is best.
   In contrast to a proprietary system, which ties an organization’s data to specific systems, limiting its use, an open format ensures that your digital twins can be easily updated, scaled and extended when new models and data representing new outcomes become available.
7. Your device management plan matters.
   In addition to ensuring that data is in a format that can be accessed and used over time, you should make similar considerations for devices that will access that data (i.e., phones, tablets and laptops). Make sure that your device plan can keep up with your needs for monitoring, updating and security.
8. The cloud is your friend.
   Cloud-based computing, storage, analytics and artificial intelligence/machine learning services enable operational technology and information technology managers to build, deploy and grow solutions quickly and affordably.
9. There are costs and benefits.
   Digital twins today may be expensive to build and maintain, but they enable technical agility and speed that foster easier scaling—and save money in the long run to boot.

Learn more about digital twins: As decision-makers in manufacturing embrace digital transformation, it is imperative to consider digital twins as key pieces of the process. For more insights on digital twins in manufacturing, read Digital Twins: The Key to Unlocking Value and Innovation.

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Manufacturing Leadership Journal content and MLC resources are exclusively available to MLC members. Please sign up for an account or log in to view this content.

Manufacturing Leadership Journal content and MLC resources are exclusively available to MLC members. Please sign up for an account or log in to view this content.

Manufacturing Leadership Journal content and MLC resources are exclusively available to MLC members. Please sign up for an account or log in to view this content.

Manufacturing Leadership Journal content and MLC resources are exclusively available to MLC members. Please sign up for an account or log in to view this content.