Supply Chain News: MIT Report on Factories of the Future

Manufacturers Must Be Industry 4.0 for Success, Researchers Say

There has certainly been much promotion and a certain degree of hype over the so-called "Industry 4.0" initiative relative to advanced manufacturing techniques.

But Industry 4.0 seems to be primarily about a collection of technologies, including real-time data monitoring systems, internet of things, 3D printers, and more. The idea is to leverage these tools to predict when manufacturing equipment will break, create smaller and more precise components in less time, and enable profitable manufacturing of small batches of customized products.

All this is not enough to truly revolutionize manufacturing, say MIT's Elisabeth Reynolds, Anuraag Singh, and Daniel Traficonte, along with Susan Helper of Case Western Reserve University, in a new research report titled "Factories of the Future: Technology, Skills, and Digital Innovation at Large Manufacturing Firms."

The four authors say that "no single new production system or technological paradigm has emerged," adding that such technologies "appear primarily as add-ons to already-existing practices rather than a comprehensive overhaul of production systems."

This is important because productivity levels for the US manufacturing have remained flat for the last decade. The researchers note that successful transformation of US manufacturing is a real challenge, requiring a clear long-term strategy and a substantial shift in the role of factory workers.

As part of the research, the team interviewed upper-level managers at 12 large manufacturing firms.

As nicely summarized by the MIT Sloan School of Management’s web site, the research paper offers six observations about the impact of digital innovation on manufacturing's future in the United States.

Those are:

Automation-related job loss is not imminent, though jobs will look different: Automation has focused on improving quality control or doing jobs too dangerous for people. Factory floor workers are now expected to monitor a range of machines and analyze data on performance and output.

Manufacturers need to adopt universal strategies for connectivity and data collection: This lack of system integration hinders progress, forcing knowledgeable workers to resort to manual processes for tasks such as change orders. It also means newly learned skills don't transfer to other manufacturers.

Manufacturers don't have to go it alone: Most American firms develop technology strategies and training programs internally. Drawing best practices from a broad ecosystem of manufacturers in the region could enable all manufacturers to modernize at a similar pace. This could also influence workforce development and system implementation initiatives across firms.

The sooner that workers see the technology that management is considering, the smoother the rollout will be: Keeping workers in the dark about what the technology will do, and how they will interact with it, only leads to distrust and tempered enthusiasm.

Individualized training efforts will only go so far: Focusing on a single system or piece of equipment benefits the firm, but it doesn't help workers build broadly applicable skills. Partnerships with local universities can fill this gap, but this requires time and monetary investments from industry, government, and academic stakeholders.

While the United States leads the world in developing digital manufacturing software, it needs to catch up on implementation: Much of this stems from American firms' focus on short-term shareholder gains, which deemphasizes long-term investment.

All this will take a much different workforce, and the researchers say manufacturers need to provide workers with the right incentives to learn additional skills.

These incentives include breaks from current duties to undergo training, wage increases tied to learning new skills, and broader allowance for reduced performance or noncritical mistakes while new systems are implemented.

The full, very long report is available here: Factories of the Future: Technology, Skills, and Digital Innovation at Large Manufacturing Firms

Written by:  SCDigest Editorial Staff, for Supply Chain Digest.