Status and trends in the global manufacturing sector

According to 20th-century logic, the future of manufacturing industries would seem bright due to a constant population growth pushing the manufacturing industry into a quest for efficiency, reliability, seamlessness, and speed. 27% of global manufacturers estimate at least a 10% year over year increase in revenues for the next 5 years, while 30% of them estimate a growth between 5% and 10%. However, this growth does not come without challenges [5].

Moreover, companies in the manufacturing sector are quickly realizing that their Supply Chain Management (SCM) must become anticipatory, adaptive and environmentally aware, in order to cope with the new realities and achieve business sustainability. Furthermore, no individual company can optimize its own SCM without suffering from friction, waste from time lags, price arbitrage, and opacity. All these problems must be solved in the context of increasingly complex supply chains that operate in a rapidly changing environment [5].

Know more: what is a NOC?

In this case, survival of the fittest means that companies that are not adopting new technologies such as the Internet of Things (IoT), predictive analytics and blockchain will not be able to withstand the competitors that do so. Apart from an obvious improvement of efficiency, these technologies also increase transparency and visibility of business operations faster than ever [5].

Recent studies estimate that the number of installed IoT devices will be growing from 15.4 billion in 2015 to 30.7 billion in 2020. The number of installed IoT devices will more than double in 2025 compared to 2020, reaching 75.4 billion The main growth drivers are estimated to be applications such as fleet management, security applications, inventory and warehouse management as well as industrial asset management. All these applications are pushing for an increase in transparency and speed of transactions and processes in the supply chain [5].

Trusted supply chains, involving the onboarding of new suppliers through heavily scrutinized due diligence and compliance processes is an area in which manufacturing companies invest a lot of time and money nowadays. The reason for this is the need for alignment in terms of responsiveness to change in production needs, traceability of both raw materials and finished goods, anti-counterfeiting and Intellectual Property (IP) protection,  all along the manufacturing supply chain.  Investing in these exclusive solutions creates strong bonds between companies, but also centralizes the control of assets and networks [5].

Although these relationships provide a sense of security for businesses, this sense of security is usually as strong as the weakest firewall in the chain. Simply building stronger firewalls is a race against the horizon that shows the need for new, comprehensive enterprise solutions for security [5].

On the other hand, the Cybermanufacturing (CM) environment which comprises networked organizations and connected machines creates an opportunity for a fast transition of products between design and manufacturing. Product designs can be generated and then rapidly manufactured with little to no human intervention through automatic parsing and transfer of design data to machine instructions. The trust issue comes back into the discussion even in this Industry 4.0 scenario as several parties are still involved in the design, fabrication, production, sourcing, and verification of product assemblies. As explained above, trust is embedded in the supply chain via several activities such as contract negotiations, certifications, audits, etc. All these trust-building operations underwent by all parties of a supply chain of a product assembly determine the so-called “trust tax”, a cost that is embedded in the final price and passed on to the consumer [6].

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