The Future of Manufacturing Competitiveness
Ian Wright posted on September 11, 2017 | 3087 views
European manufacturers are being squeezed between North America and APAC. (Image courtesy of Deloitte.)
European manufacturers are being squeezed between North America and APAC. (Image courtesy of Deloitte.)
Now more than ever, manufacturers are looking to the future.

With Industry 4.0 right around the corner (or maybe it’s already here) manufacturing is about to make an exponential leap forward. We’ve seen industrial revolutions before—three of them, in fact—but somehow the fourth industrial revolution seems different.

Michelle Drew Rodriguez, manufacturing leader for Deloitte’s Center for Industry Insights, believes the key difference between this industrial revolution and the past three is the pace of change. “The last three industrial revolutions have essentially taken place on a linear path,” she said in a keynote at the second annual Robotiq User Conference (RUC). “But the pace at which technology is advancing—particularly in the last few decades—isn’t linear; it’s exponential.”

These exponential changes are inherently disruptive, and they’re just beginning to be felt in manufacturing. “Bottom line: it’s a great time to be in manufacturing,” Rodriguez said. “We’re seeing very strong output globally.”

The data for that insight comes from Deloitte’s Global Manufacturing Competitiveness Index (GMCI), which surveys more than 500 manufacturing executives to “take the pulse” of the sector, particularly regarding which countries the respondents see as most competitive.

Another insight in the GMCI is the close link between a country’s ranking and the prevalence of its high-tech manufacturing. “Nations that have more than 50 percent of their exports coming from high-skill, high-tech manufacturing exports are correlated very significantly to manufacturing executives feeling that they’re going to be more competitive in the future.”

Rodriguez suggested that this is part of the reason the U.S. is predicted to overtake China at the top of the GMCI by 2020. “This is the first time ever that global manufacturing executives are ranking the U.S. in the number one spot.” 

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Factors in the growth of manufacturing. (Image courtesy of Deloitte)

The impact of new technology notwithstanding, the biggest driver of manufacturing competitiveness is still talent. “Talent is going to be the key differentiator moving forward,” said Rodriguez. The issue there, of course, is the skills gap: another reason manufacturers are so focused on the future. “Manufacturing executives indicate that six out of ten of their current openings are due to that skills shortage,” Rodriguez added.

A potential solution to this issue fit well with the RUC theme of deploying more robots, faster. “Collaborative robots are a great way to address that need,” said Rodriguez, “Because you’re not replacing workers, but helping them by taking what they do today and automating the mundane or routine jobs that people don’t want. That frees up their intellectual power to advance your manufacturing operation in other ways.”

After her keynote, I asked Rodriguez if she sees a connection between the rapid pace of change associated with Industry 4.0 and the impending skills gap in manufacturing. “Absolutely,” she said. “I think there are two elements to the skills issue. One is fundamentally a matter of supply, in that we simply don’t have enough talent. But that’s amplified by the fact that, because things are changing so quickly, it’s increasingly more difficult to reskill or upskill your workers to keep pace with technology.”

For more information, visit the Deloitte website. Stay tuned for updates from RUC 2017.

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