The Third Industrial Revolution (1970 – 2010) was characterized by the advent of electronics and information technology that enabled the automation of production facilities at a scale that was unprecedented. This paved the way for a wave of productivity that played a significant role in the growth of our economy and created an entire ecosystem of manufacturing automation/IT vendors, implementers and practitioners to bring these innovative new capabilities into production. This era has reached its plateau, and the implications for our manufacturing competitiveness are significant.
Manufacturing productivity and innovation has been a significant source of growth and prosperity here in the U.S. Yet the past decade has revealed an unprecedented flattening and even decline in our manufacturing productivity by worker (see the adjoining chart). The reasons why are complex but it’s clear that the flattening value/productivity curve of Industry 3.0 has not yet made way for the promised value/productivity curve of Industry 4.0.
Many have hailed the Fourth Industrial Revolution as the silver bullet that will usher in this new era of productivity and value creation. While this is a reachable premise in principle, what gets lost in translation is that the transition of the manufacturing ecosystem from one era to the next has historically been disruptive and messy.
Old behaviors and business models must make way for new ones, and those that refuse to make that transition will be remembered on the “ash heap of history.”
We find ourselves in that transitional period between our cognizance of the Fourth Industrial Revolution and the actual embodiment of the ideas and capabilities it heralds. As an ecosystem, we are aggressively aligning around this vision of a better future but our behaviors, capabilities and business models are still firmly rooted in the past. In almost every way, to borrow Geoffrey Moore’s analogy, this entire ecosystem is still pre-chasm, even though every vendor in this marketplace has, understandably, taken their existing portfolio and rebranded it under the umbrella of Industry 4.0.
Most manufacturers are concluding that despite access to new technologies like the cloud, IIoT, AI, and augmented reality, very little has changed in terms of the cost and complexity of implementing manufacturing systems. The statistics bear this out as well, with anywhere from 72 to 80 percent of all digital transformation initiatives being characterized as “not successful.”
This should raise alarm bells everywhere!
Closed and proprietary architectures and technologies on the plant floor are still the norm, and there is no silver bullet on the horizon to significantly improve this trajectory.
It is also vital that we recognize the ramifications of the Third Industrial Revolution for small and medium manufacturers (SMMs). The cost and complexity of automation and digitization have made them inaccessible for most SMMs, causing a “digital divide” that continues to expand, further constraining their productivity and growth initiatives.
This has extraordinary implications for large enterprises, given that they need their supply network—the majority of which are SMMs—to join them on the journey to a fully digitally integrated ecosystem.
A resilient, agile supply chain is a connected supply chain, where end-to-end visibility, in real time, is the key to enable manufacturers to predict and respond to supply chain disruptions.
This is only feasible if we can enable the democratization of smart manufacturing, providing accessibility to these essential capabilities for SMMs, as well.
The prospect of the Fourth Industrial Revolution catalyzing the revitalization of our manufacturing productivity in the U.S. is real, but still aspirational, and demands a concerted effort to accelerate the evolution of this entire ecosystem.
To address this, CESMII and SME, an organization long focused on advancing manufacturing, are teaming up. The two organizations are aligning and optimizing strengths and resources to benefit the ecosystem, without recreating the wheel.
The first joint CESMII and SME initiative—which builds on the strength of what already exists in the market yet does something different—is the formation of a new national Smart Manufacturing Executive Council.
This new council will engage business and technology executives, thought leaders and visionaries as a “think tank” advocating for the transformation of the ecosystem. It will build on each organization’s history of working with industry giants who volunteer their time and impart their knowledge to benefit the industry as a whole.
While council participation is by invitation only, we welcome suggestions for senior executives interested in sharing their expertise and committed to publicly advocating for the transformation of the smart manufacturing ecosystem.
For the industry to move forward and innovate, the workforce must be prepared and motivated. The need for richer, scalable education and workforce development is more important than ever.
As part of the partnership, SME’s training arm, Tooling U-SME will become the primary partner for education and workforce development around smart manufacturing.
CESMII and SME will set a new benchmark for developing educational resources that remain current with rapidly changing technology and focus on democratizing access to training on smart manufacturing skills.
Awareness is a big part of this initiative. Combining CESMII’s network of subject matter experts and SME’s reach and expertise in producing industry-leading events and media publications, will help communicate the value of smart manufacturing as well as demonstrate technology solutions.
For more information about CESMII, SME and the Smart Manufacturing Executive Council, go to https://www.cesmii.org/sm-executivecouncil/
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