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42 www.CNC-West.com CNC WEST August/September 2018 W hile manufacturers have traditionally been hesi- tant to invest in their operations due to cost, a recent National Association of Manufacturers (NAM) survey of more than 500 manufacturers reveals that 65% plan to increase capital spending in the coming years. Where is the money going to go? Experts predict most manufacturers will look toward revamping their facilities in order to adapt to the demands of today’s digital world. This adjustment, which many call the “fourth industrial revolution” or smart manufac- turing, will move manufacturers from mass production to cus- tomized production via a digital supply network. The digital transformation, a melding of new technologies such as the Internet of Things (IoT), advanced robotics, Artifi- cial Intelligence (AI), and 3D printing, is expected to generate more than $370 billion in net global value over the next four years. While digitization is helping to get more out of manu- facturers’ materials and machines, what are the driving forces behind transformation? In short, customers, employees, and suppliers. CUSTOMERS According to a Harvard Business Review study of 75,000 people, the most important factor for customers is the reduc- tion of effort; they want the products they interact with to be simple, questions to be answered fast, and information to be available when they need it. These expectations are changing the way they view traditional products and brands, opening up the door for competing manufacturers that have embraced the digital transformation. To stay ahead of the curve, keep cus- tomers, and attract new ones, manufacturers need to innovate faster and create products that are software-enabled and con- nected (think the smart car; today there are entire smart cities). Keeping up with shorter product life-cycles (PLCs) is also of the utmost importance. Today, a typical life-cycle between electronic variants and generations is going from 12-18 months to less than one year for many products (consider how fre- quently people upgrade their smartphones for the latest and greatest; even in the automotive industry, PLC has gone from 9 to 5 years). With PLCs getting shorter and shorter, manufactur- ing processes need to get faster and faster, and digital transfor- mation is leading the charge. Finally, today’s customers expect higher levels of quality; when they drop hundreds of dollars on a new device, they ex- pect a high-quality piece of technology. Digitization in manu- facturing facilities introduces rigorous quality management and control, helping manufacturers to build better products. EMPLOYEES Disconnected employees lead to job dissatisfaction. Digiti- zation helps manufacturers get the most out of their employees, and helps employees get the most out of their jobs. Digitization breaks down information barriers and departmental thinking allowing employees to do their jobs more effectively. However, there can be a lack of digital talent in many manufacturing fa- cilities. While this is understandable in large, well-established firms, their position in the industry allows them to adapt at a slightly slower pace. Small and medium-sized manufacturers (SMMs), on the other hand, are under tremendous pressure to bring in tech-savvy employees that understand the digital realm, otherwise they become extremely vulnerable to compe- tition from startups and other more agile companies that at- tract young digital talent in droves. THE DRIVE TOWARD DIGITAL TRANSFORMATION IN MANUFACTURING Article Courtesy of Steven Brand, CMTC www.cmtc.com INDUSTRY 4.0