More Make-to-Order Factories Being Planned

New study says flexibility will be as important as efficiency.

More than 43% of respondents to an industry study indicated they have a formal process in place to design future production plants. The report, “Business Strategy: The Journey toward the People-Intensive Factory of the Future,” was published by IDC Manufacturing Insights. The authors contend that formidable challenges — from tough economics to rising market complexity — are driving a profound rethinking in the manufacturing industry.

Other key results from this study include:

  • For more than 56% of respondents, the factory of the future will be measured according to its production capability and flexibility, not merely efficiency and production capacity.
  • Over the next five years about 10% of Western enterprises will give up the make-to-stock (MTS) effort and move toward make-to-individual (MTI).
  • In five years, 47% of manufacturers will produce modular platforms centrally while using local small factories, suppliers, and distributors to tailor final products for local demand.
  • Manufacturers will have to achieve the global plant floor, harmonizing, supervising, and coordinating execution activities across the company's and suppliers' network of manufacturing operations.
  • Despite growing plant automation, people — and the flexibility and decision-making capabilities they provide — will be at the center of the factory of the future. Finding skilled workers will prove to be a key issue in the industry.
  • 63.6% of respondents expect their production processes to be largely or completely digitized in the next five years. More than 26% of manufacturers will invest over 25% of their total ICT budget for plant-floor IT.

The global manufacturing industry is passing through one of the most complex market contexts ever, the report states.  A sequence of financial crises and the always-threatening instability of global markets have dominated the business landscape in recent years. In this scenario, manufacturers have seen their profitability challenged and their capacity to expand into new markets endangered. This challenging marketplace, other than being a threat, is also resulting in a positive turnaround for the manufacturing industry.

The authors add that for the last 15 years, the manufacturing industry was essentially "neglected" with respect to other industries and was not considered a good industry to invest in for the most advanced economies around the world. 

That situation is rapidly changing.

“Governments around the world now better understand that an economy purely based on service alone cannot survive in the long run,” the report states. “Manufacturers themselves are going back to basics and putting a renewed premium on production knowledge driven by the need to protect and enhance their technology. They realize now that the direct involvement in production operations fosters innovation and improves customer service.”

 All these factors combined with the rise of transportation costs due to oil price developments and the need to produce closer to clients for better flexibility and service are favoring manufacturing insourcing initiatives in several developed economies, including the U.S. and U.K.

“The manufacturing industry is back onstage in developed countries worldwide,” said Pierfrancesco Manenti, head of IDC Manufacturing Insights, EMEA, and practice director, Operations Technology Strategies. “Governments, media, manufacturers themselves, and their people are all changing their mindset with a stronger focus on production. We are about to witness a new generation of manufacturing enterprises where operational processes on the plant floor — at the very heart of the enterprise — are considered the centerpiece of this transformation.”

 

 

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