Here are a few of the strategic issues plundering sleep from manufacturing executives today: a lower U.S. corporate tax rate, staggering technol- ogy advancements, the risk of a global trade war, a talent crunch that promises to intensify, new supply chain partners, and B2B customers with increasingly Amazon-esque B2C expectations. That’s a decidedly
abbreviated version of a longer, more fluid priority list.
“In today’s economy, manufacturers have to be jugglers—balancing immediate
considerations with long-term priorities,” asserts Rick Schreiber, the national leader
of BDO’s manufacturing and distribution practice. In the short-term, vacillations and
unpredictable outcomes in trade policy and geopolitics occupy both boardrooms and
newsrooms. Over the longer-term, manufacturers must chart a path to digitization.
It’s not a matter of ‘if’, but ‘when’ regarding Industry 4.0 adoption. Either you hop
on board or you run out the clock until you can no longer keep up with the manufacturers that made smart investments early on.”
There is little, if any, doubt among
manufacturing consulting leaders
that shop-floor co-bots, embedded
sensors, artificial intelligence (AI),
robotic process automation (RPA),
3D printing, analytics, digital transformation and other components of
Industry 4.0 are reshaping the manufacturing industry in profound ways
Two trends all but assure this
impact will sustain, notes Vladimir
Lukić, a Boston Consulting Group
Partner and Managing Director who
is a member of the firm’s industrial
goods, operations, and people and
organization practices: decreasing
costs and increasing accessibility.
A shop floor robot that cost six fig-
ures a few years ago can now be had
for less than $25,000. Production-
grade 3D printers now cost as little
as a fancy Apple desktop did a few
years ago. And, Lukić emphasizes,
employees at all levels of manufac-
turing companies are eager to bring
to their work the speed, convenience
and power of the technologies they
routinely use at home. “One of our
supply chain experts likes to say
that our customers expect their five-
to-nine experience to become their
nine-to-five experience,” says EY
Americas Advisory Industrial Prod-
ucts Leader Jerry Gootee.
Lukić agrees, noting that a
growing number of manufactur-
ing employees are seeing “the art
of the possible” manifested else-
where and are itching to use it in
their work. “I can’t tell you,” he
adds, “how many times I’ve heard
comments like, ‘Listen, even my
kid can do this with an app.’”
An unavoidable journey toward
an Industry 4.0-enabled future does
not mean it will be a smooth ride.
Consulting leaders indicate that
manufacturing executives across
all sectors are calling for help with
a comprehensive set of challenges
related to technological advance-
ments and disruptions—including
assistance with strategy, operations,
trading partners, talent, and security.
Growth and Government
As is currently the case in many
realms, the short-term prognosis
for manufacturers is a bit volatile.
The positive news is very good:
U.S. economic growth is helping
many manufacturing companies.
This growth, says Grant Thornton
Manufacturing industry leader Jeff
French, allows manufacturers to
resume looking forward while increasing their growth investments.
“Activity really began picking up
last September and growth was very
strong through the Fall,” he says.
“Although it flattened out a bit over
the winter, it has picked up significantly since then.” While growth
is welcome, it brings challenges,