Digital manufacturing: The revolution will be virtualized


Few manufacturers are responding to opportunities and threats presented by the digital revolution in a comprehensive, coordinated way. Learn how and why manufacturing industries require a digital transformation.


The digital revolution is now breaching the walls of manufacturing as it continues to disrupt media, finance, consumer products, healthcare, and other sectors. Indeed, the explosion in data and new computing capabilities—along with advances in other areas such as artificial intelligence, automation and robotics, additive technology, and human-machine interaction—are unleashing innovations that will change the nature of manufacturing itself. Industry and academic leaders agree that digital-manufacturing technologies will transform every link in the manufacturing value chain, from research and development, supply chain, and factory operations to marketing, sales, and service. Digital connectivity among designers, managers, workers, consumers, and physical industrial assets will unlock enormous value and change the manufacturing landscape forever.


Yet while manufacturing generates more data than any other sector of the economy, few companies are harnessing it. One oil-and-gas company, for example, discards 99 percent of its data before decision makers have a chance to use it. We believe that companies that can close this gap by tapping the data they generate (and what’s publicly available) will uncover valuable insights to drive profits and growth. Consider traditional car manufacturers and Uber, which are both—at the highest level—in the business of moving people around. Car makers meet that need on the floors of factories and showrooms, using a century of manufacturing experience. Uber meets people’s transportation needs not with steel, glass, rubber, and salespeople but with data, matching individual riders and vehicles via smart phones. Barely five years into its existence, it is valued at about $50 billion. Uber’s data, algorithms, and enormous growth prospects have already made it more valuable than all of the physical assets, intellectual property, and brand names of some of the world’s biggest car manufacturers.


It comes as no surprise, then, that manufacturers are waking up to the opportunities and threats of digitization. In the United States, the National Network for Manufacturing Innovation is organizing six major research institutes to speed new manufacturing technologies to market. While all of these institutes have a digital component, one is focused specifically on digital manufacturing.1 Similar efforts are underway across the globe, including Germany’s Industry 4.0 effort and China’s Made in China 2025. One global convening organization, the Industrial Internet Consortium, was founded just 18 months ago and already has 175 members.


How leading manufacturers are responding to digital


The ways people and organizations use information has shifted dramatically. Data storage is cheap and flexible, and advanced analytics and artificial intelligence are giving us new abilities to draw insights from large amounts of data. Advances in virtual and augmented reality, next-level interfaces, advanced robotics, and additive manufacturing are all opening the gates to digital disruption. And in the next decade, digital manufacturing technologies will allow companies to connect physical assets by a “digital thread”—unleashing a seamless flow of data across the value chain that will link every phase of the product life cycle, from design, sourcing, testing, and production to distribution, point of sale, and use.

Read the complete article and article credit by: Brian Hartmann, William P. King, and Subu Narayanan | McKinsey & Company