Business Benefits of Technology in Manufacturing
The key business benefits of new technology in manufacturing include:
Products and Productivity
Advances in technology have spurned new products and manufacturing
processes. In turn, this has lead to improved productivity in manufacturing
- Better product design
- Improvements in supporting activities
- Improved product economics - opening up new markets by products
- Reductions in labor requirements
- New market opportunties - market growth opportunities in regions
that supply low-cost labor, making for better economics in both
production and distribution.
- Contract manufacturing - a new class of companies that provide
third-party manufacturing capability.
Risk management is a decisive factor in all manufacturing sectors.
Decisions must be made on:
- Manufacturing location - domestically or overseas
- Adoption of innovations or evolutionary improvements
- Increase local labor or contract outsourcing
Most nations do not provide a least-risk environment to start
or expand a manufacturing enterprise, in spite of manufacturing
being an important element in most economies. Manufacturers need
and environment that foster:
- Individual freedom and political stability
- Safety and security
- Easy access to large and liquid capital markets
- A skilled workforce with a work ethic
- Easy access to a large consumer market
- Better education
- A supporting infrastructure
Each of these elements presents a complex risk profile for manufacturers,
and each decision made by manufacturers must consider each element.
This demands a solid decision making infrastructure that not only
supports sound ecomonic decisions, but also reduces the risks at
Collaboration allows a group of companies to share the risks involved
and facilitate the rapid adoption of a new technology. Collaboration,
or partnering with a purpose, must consider:
- Risk – of time and cost as well as risk
in sharing resources and IP with a competitor or a supplier, and
also the risk of failing to maintain a market lead or presence
if you do not proceed.
- Resources - cost-sharing helps reduce the
resources needed to technological objectives
- Resistance – within the company to getting
involved at all.
The ability to communicate fluidly and collaboratively over distances
loosens geographical linkages, alters organizational structure,
and changes control structures amongst ancillary activities.
Manufacturing processes are amongst the most energy-intensive
industrial systems. By developing and adopting more energy-efficient
technologies, the manufacturing industry can boost its productivity
and competitiveness while improving national energy sustainability
and reducing environmental linked to global climate change.
Even small efficiency enhancements to technologies widely used
in industrial sectors can have a large impact if adopted across
entire industries. This is particularly so in heat, power, and process
heating systems. Improvements in combustion can also improve energy
efficiency, reduce emissions, and enhance fuel flexibility.
Applying best practices to the basics behind many manufacturing
processes [motors, steam, and compressed air systems] can save up
to 30 percent of energy used in a plant in a few years.
Lean Mass Production
Lean production and flexible specialization have been introduced
to update mass manufacturing to better align with todays market
Manufacturing models focus either on making a complete product
or component based. In a component based value chain, much of the
value is in the intellectual property of the components. Cross-national
production networks disintegrate the value chain into constituent
functions that can be contracted out to independent producers wherever
those companies are located in the global economy. This strategic
and organizational innovation, known as value [supply] chain management,
means that production of even complex products can become a commodity
service that can be purchased on the market.
Intelligence In Manufacturing
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