by Gary Mintchell | Jan 26, 2016 | Automation, Internet of Things, News, Operations Management, Technology
The PwC Industrial Manufacturing Trends 2016 post has been released. Check it out. There are some interesting ideas.
The authors Stephen Pillsbury and Robert Bono cite the painful lessons of recovering from 2001 and 2008 as leading to caution now displayed by manufacturing leaders. We’ve had a bit of an economic jolt. Where is it headed? The uncertainty leads to caution.
They reach an interesting conclusion, “Manufacturing may be facing some headwinds, but it’s undeniably in the midst of a technological renaissance that is transforming the look, systems, and processes of the modern factory. Despite the risks — and despite recent history — industrial manufacturing companies cannot afford to ignore these advances. By embracing them now, they can improve productivity in their own plants, compete against rivals, and maintain an edge with customers who are seeking their own gains from innovation.”
It is time, they say, to envision and prepare for a data-driven factory of the future.
They reveal four technology categories that are already driving much of the change. I’ll summarize. Check out the report for more depth. Most of these are not surprising, but they certainly must be factored in the thinking of manufacturing leaders.
Industrial Manufacturing Technologies
- Internet of Things (IoT): The connected factory is an idea that has been evolving for the past few years. Increasingly, it means expanding the power of the Web to link machines, sensors, computers, and humans in order to enable new levels of information monitoring, collection, processing, and analysis.
But for industrial manufacturing companies, the next generation of IoT technology should go well beyond real-time monitoring to connected information platforms that leverage data and advanced analytics to deliver higher-quality, more durable, and more reliable products.
Before investing in IoT, however, industrial manufacturing companies must determine precisely what data is most valuable to collect, as well as gauge the efficacy of the analytical structures that will be used to assess the data. In addition, next-generation equipment will require a next-generation mix of workers, which should include employees who can design and build IoT products as well as data scientists who can analyze output.
- Robotics: In many cases, robots are employed to complement rather than replace workers. This concept, known as “cobotics,” teams operators and machines in order to make complex parts of the assembly process faster, easier, and safer.Cobotics is rapidly gaining momentum, and successful implementations to date have focused largely on specific ergonomically challenging tasks within the aerospace and automotive industries. But these applications will expand as automation developers introduce more sophisticated sensors and more adaptable, highly functional robotic equipment that will let humans and machines interact deftly on the factory floor.
- Augmented reality: Recent advances in computer vision, computer science, information technology, and engineering have enabled manufacturers to deliver real-time information and guidance at the point of use.
- 3D printing: Also known as additive manufacturing, 3D printing technology produces solid objects from digital designs by building up multiple layers of plastic, resin, or other materials in a precisely determined shape.
The authors conclude with recommendations of how to consider necessary investments in these emerging technologies.
by Gary Mintchell | Oct 19, 2015 | News
Many years ago I read a book about the stock market. It poked fun at the news reports that would go—there is a wave of selling. Hmm, for every seller there is a buyer. Someone bought all the shares being sold.
I bring that up just as a note about economics (and maybe life in general). Some things are good and bad simultaneously.
Take the strength of the dollar. American nationalists think that a strong dollar means a strong nation, or that we “won” some contest. However, for manufacturers and other suppliers looking to sell overseas a strong dollar makes our products more expensive and therefore less competitive.
The latest PwC US Manufacturing Barometer just came my way. It states, “Sentiment regarding the direction of the global economy took a sharp turn downward among U.S. industrial manufacturers, according to the Q3 2015 Manufacturing Barometer, released by PwC US today. Global concerns also served to moderate optimism regarding the domestic outlook, while slowing plans to hire more workers. At the same time, capital and operational spending forecasts among U.S. companies remained healthy.”
Details:
During the third quarter of 2015, optimism regarding the direction of the global economy dropped to 23 percent from 38 percent in the previous quarter and 30 percent in the third quarter of 2014. In addition, pessimism rose to an equal level with optimism (23 percent), reflecting an uncertain outlook for international commerce. Further, 40 percent of respondents indicated they believed the world economy was declining, showing greater concern than in the previous quarter (25% in Q2).
Conversely, optimism regarding the U.S. economic outlook remained positive but dropped to 60 percent in the third quarter of 2015 from 69 percent in the second quarter. Despite the renewed sense of caution regarding the global stage, company revenue forecasts for the next 12 months rose to a moderately high 5.3 percent in the third quarter, compared to a forecast of 4.9 percent in the second quarter.
“U.S. industrial manufacturers became increasingly cautious on the outlook for the global environment as they assessed the impact of the slowdown in China and the strengthening dollar,” said Bobby Bono, PwC’s U.S. industrial manufacturing leader. “Despite the downward turn in overseas sentiment, overall domestic growth prospects remained healthy and manufacturers continue to focus on further strengthening core products and services. They are keeping their cash at home and directing investment toward enhancing their value propositions in an effort to remain competitive and drive future revenues.”
As a result of the decline in global sentiment, U.S. industrial manufacturers scaled back hiring plans in the third quarter, with only 37 percent planning to add employees to their workforce over the next 12 months, down 15 points from the 52 percent level indicated in both the second-quarter and year ago comparable period. The total net workforce growth projection in the third quarter was minus 0.2 percent, indicating further cutbacks in hiring among industrial manufacturing firms.
Among the minority of panelists planning to hire within the next 12 months, the most sought-after employees will be blue collar/skilled labor (23 percent) and professionals/technicians (25 percent). Limited white collar support, middle management and sales/marketing hiring is planned. “The drop in hiring plans may indicate an expectation for slower growth in the near future,” Bono added. “Management teams will likely intensify avenues to improve productivity across their organizations, while continuing to search for professionals with strong technical skills.”
Despite the tempered global outlook, 37 percent of U.S. industrial manufacturers surveyed plan major new investments of capital during the next 12 months, up slightly from the second quarter and same period last year. In addition, the mean investment as a percentage of total sales was a moderately high 5.6 percent, well above 3.3 percent in the second quarter and on par with 5.7 percent in last year’s third quarter. Operational spending plans remained healthy as well with 82 percent indicating plans to increase operational spending, up from 75 percent in the second quarter and 69 percent last year. Leading increased expenditures were new product or service introductions (48 percent), research and development (37 percent), business acquisitions (23 percent) and information technology (22 percent).
“In the face of global uncertainty and the impact of a strengthening U.S. currency, management teams continue to focus investment on developing new products and driving innovation in an effort to sustain and build market share,” Bono added. “Companies are doubling down on what they do best and aggressively building their competitive moats. At the same time, they are continuing to pull back from overseas expansion, with only five percent indicating plans to open facilities abroad.”
Looking at perceived barriers to entry, monetary exchange rate became the leading headwind to growth over the next 12 months, as indicated by 38 percent of respondents. A year ago, it was only 14 percent (24 points lower). Typical barriers to growth—lack of demand (32 percent) and legislative/regulatory pressures (25 percent)—were lower as monetary exchange rate took center stage.
PwC also surveyed respondents on investment in information technology, and found that 80 percent of manufacturers report having a multiyear plan (3-5 years) that addresses business capabilities and processes as well as IT systems. Industrial manufacturing companies’ IT investments are made primarily to reduce costs (84 percent) and support growth (72 percent). Overall, 90 percent are planning to invest in IT technologies over the next 12-18 months, with upgrading infrastructure the leader at 82 percent.
About the Manufacturing Barometer
PwC’s Manufacturing Barometer is a quarterly survey based on interviews with 60 senior executives of large, multinational U.S. industrial manufacturing companies about their current business performance, the state of the economy and their expectations for growth over the next 12 months. This survey summarizes the results for Q3 2015 and was conducted from June 24, 2015 to September 28, 2015.
by Gary Mintchell | Mar 24, 2015 | Automation, News, Technology
Rethink Robotics today provided a glimpse into the future of collaborative robotics with the introduction of Sawyer, a single-arm, high-performance robot designed to execute machine tending, circuit board testing and other precise tasks that have historically been impractical to automate with traditional industrial robots. Sawyer is a significant addition to the company’s smart, collaborative robot family, which also includes the groundbreaking Baxter robot that defined the category of safe, interactive, affordable automation.
Sawyer offers the same highly-touted safety, compliance and usability advantages of Baxter – including the iconic “face” screen, embedded sensors and train-by-demonstration user interface – while providing the smaller footprint and high precision performance needed for tasks that require significant agility and flexibility. In addition, Sawyer runs on the Intera software system, the same extensible platform that powers Baxter, so it works like humans do by dynamically adapting to real-world conditions on the plant floor and integrating seamlessly into existing work cells. Together, Baxter and Sawyer can address many of the estimated 90 percent of manufacturing tasks that cannot be feasibly automated with traditional solutions today according to the press release.
Weighing 19 kg (42 lbs), Sawyer features a 4kg (8.8 lb) payload, with 7 degrees of freedom and a 1-meter reach that can maneuver into the tight spaces and varied alignments of work cells designed for humans. Its high-resolution force sensing, embedded at each joint, enables Rethink Robotics’ compliant motion control, which allows the robot to “feel” its way into fixtures or machines, even when parts or positions vary. This enables an adaptive precision that is unique to the robotics industry and allows Sawyer to work effectively in semi-structured environments. In addition, Sawyer features an embedded vision system, which includes a camera in its head to perform applications requiring a wide field of view and a Cognex camera with a built-in light source in its wrist for precision vision applications. Sawyer’s vision system enables the Robot Positioning System for dynamic re-orientation, and over time will support more advanced features that are inherent to the Cognex system, such as barcode scanning and object recognition.
“With Baxter, we introduced the concept of robots and people working together on the plant floor,” said Rethink Robotics president and CEO Scott Eckert. “With Sawyer, we have taken that relationship to the next level, with a high performance robot that opens the door for many new applications that have never been good candidates for automation. As we continue to redefine this industry, we also continue to give manufacturers new ways of adding efficiency and flexibility into their operations.”
Jabil, a global electronic product solutions company that is partnering with Rethink Robotics as an early adopter and field tester of Sawyer, recognizes the robot’s immense potential. “Flexible automation that addresses shrinking product lifecycles and helps companies align with consumer trends is a critical technology initiative for manufacturers,” said John Dulchinos, vice president of digital manufacturing at Jabil. “Rethink Robotics continues to lead the way in defining how workers and machines can coexist to leverage the strengths of each, and optimize productivity for all.”
Dan Kara, robotics practice director at ABI Research, also sees the value of Sawyer for the robotics industry and its customers. “With the introduction of Baxter, Rethink fundamentally changed the conversation in the robotics industry and pioneered a new way of thinking about automation. Today, the collaborative concept has been accepted, the value has been proven, and more companies are looking to standardize globally on these solutions. Sawyer incorporates advanced technology from the Baxter platform, but is different in other fundamental aspects, making it suitable for wholly new classes of applications. Rethink’s Sawyer is a very compelling technology that has the potential to once again change the way manufacturers think about their automation infrastructure moving forward,” he concluded.
Sawyer, which will retail for a base price of $29,000, will initially be available in North America, Europe, China and Japan. It is currently being field tested by several large manufacturing companies in those regions. Sawyer will be released with limited availability in the summer of 2015, with general customer availability targeted for later in the year.
About Rethink Robotics
Rethink Robotics, Inc. helps manufacturers meet the challenges of an agile economy with an integrated workforce, combining trainable, safe and cost-effective robots with skilled labor. Its Baxter robot, driven by Intera, an advanced software platform, gives world-class manufacturers and distributors in automotive, plastics, consumer goods, electronics and more, a workforce multiplier that optimizes labor. With Rethink Robotics, manufacturers increase flexibility, lower costs and can invest in skilled labor—all advantages in fueling continuous innovation and sustainable competitive advantage.
Committed to accelerating robotics innovation in manufacturing and beyond, Rethink Robotics’ Baxter Research Robot gives academic and corporate research environments a humanoid robot platform with integrated sensors and an open software development kit for creating custom applications.
Based in Boston, Massachusetts, the company is funded by GE Ventures, Goldman Sachs, Bezos Expeditions, CRV, Highland Capital Partners, Sigma Partners, Draper Fisher Jurvetson, and Two Sigma Ventures.
by Gary Mintchell | Feb 20, 2015 | Commentary, News
This m&a activity was reflected in my own practice. There was much activity in divestiture on some company’s parts which means acquisition for other companies. It was an active year. Following is a report from PwC US. Interesting reading throughout–as much about workforce issues as companies restructuring.
Following a strong fourth quarter, the industrial manufacturing industry closed out a stellar year for merger and acquisition (M&A) activity, according to Assembling Value, a quarterly analysis of global deal activity in the industrial manufacturing industry by PwC US.
Total deal value (for transactions worth more than $50 million) soared in 2014, reaching $127 billion, an increase of 163 percent over the prior year and surpassing the 10-year high of $92.4 set in 2006. There were 213 industrial manufacturing deals (worth more than $50 million) recorded in 2014 for a total of $127 billion compared to 148 deals worth $48.3 billion in 2013.
Both deal value and volume spiked drastically in the fourth quarter of 2014, recording 56 deals worth $24.1 billion compared to 38 deals totaling $9.6 billion in the same period the previous year. Megadeals worth more than $1 billion were also in abundance in 2014 with 24 announced transactions worth $91.6 billion.
“The strong momentum for manufacturing deals in 2014 carried into the fourth quarter as horizontal consolidation and divestitures of non-core business continued to drive robust activity,” said Bobby Bono, U.S. industrial manufacturing leader for PwC. “Companies are monetizing non-core or underperforming assets, leveraging scale in core businesses and considering joint ventures and new strategic alliances to expand into long-term attractive markets, particularly in developing economies with a growing middle class. In addition, management’s attention has shifted away from headcount reduction and cost-cutting programs toward growth initiatives and filling the talent gaps.”
Manufacturers continue to struggle to find and retain talented workforce and a skilled labor portfolio is becoming a more important factor in evaluating potential M&A targets. Sixty-four percent of respondents to PwC’s Q4 Manufacturing Barometer cited a need to fill skill gaps in their businesses over the next 12-24 months and over the past year, two-thirds also reported having open positions that they were unable to fill with experienced or skilled employees. In order to begin filling the gap, 78 percent of respondents plan to hire new skill function employees over the next 12-24 months with the broadest needs in engineering/design (62 percent), manufacturing (44 percent) and R&D (28 percent).
Regionally, acquirers from Asia led the way in terms of volume in 2014, accounting for 107 of the 213 deals; however, inbound activity in the region remained subdued. China was the most active acquirer nation, accounting for 35 percent of all deals during the year.
While emerging market activity boomed in the fourth quarter, local market deals remained dominant and no cross-border activity was generated from Asia. Europe, on the other hand, saw a significant amount of local, inbound and outbound activity despite continued economic malaise in the region. Local and foreign buyers continue to scour the region for high quality businesses as they look to align their business portfolio with long-term attractive markets.
“China-involved deals in 2014 exceeded any year of the past 10; however, foreign buyers have become increasingly wary due to an oversupply of capacity, materials and debt in the region and local market consolidation. Given a perceived lack of innovation, inability to move up the value chain and cooling domestic markets, we expect Asian manufacturing companies to begin looking for opportunities in established markets in 2015,” said Bono.
According to PwC, strategic as well as financial investors continued to pursue high-quality industrial assets and were more willing to acquire companies with stable growth prospects, even at a higher valuation. In the fourth quarter of 2014, financial investors accounted for 36 percent of all deals.
“We expect market expansion, access to next wave technologies, and the compelling need to generate synergies to drive manufacturing M&A activity, particularly in established markets. The potential impact of the first round of regulatory tightening on U.S. economic activity along with the talent crunch will be key areas of focus for management but companies with healthy balance sheets and favorable access to financing will have a clear opportunity in 2015,” Bono concluded.
by Gary Mintchell | Dec 12, 2014 | Events, News, Operations Management
We’ve probably all witnessed the declining prices at the gasoline pump. If we’re investors heavily invested in oil stocks, we may be feeling a reverse emotion. Depends. There is no doubt that the current shale gas/shale oil boom in the US has a significant impact on the economy and our financial health. Here’s a report revealing the impact on manufacturing.
PwC US increased its forecast on cost savings and long term employment gains in U.S. manufacturing as a result of the surge in shale gas production on Dec. 11. The new estimates are part of PwC’s updated analysis on the significant contributions shale gas is making in revitalizing the U.S. manufacturing landscape.
According to PwC’s new report titled, Shale Gas: Still a boon to US manufacturing?, PwC estimates that the continued “shale effect” on U.S. manufacturing could bring an annual cost savings of $22.3 billion by 2030, assuming a high natural gas recovery and low price scenario. In terms of job creation, PwC estimates that continued shale gas activity will create 930,000 shale gas driven manufacturing jobs by 2030 and 1.41 million by 2040. These estimates are comparable to the analysis done in PwC’s 2011 study, which showed an annual cost savings of $11.6 billion and approximately one million jobs by 2025.
“There’s no doubt that the shale gas boom in the U.S. helped trigger a resurgence in manufacturing,” said Robert McCutcheon, U.S. industrial products leader, PwC. “Reducing costs, creating jobs and supporting investments and innovations are among the many impacts this game-changing resource has brought to the U.S. manufacturing space. Assuming shale continues to serve as a catalyst for the manufacturing sector, we revised our cost savings and longer term employment estimates significantly upward, and could see those numbers go even higher as more businesses and global interests look to exploit shale opportunities.”
Among the industries continuing to benefit are energy intensive manufacturing sectors such as metals, chemicals and petrochemicals, which all use natural gas as feedstock. According to the report, growing prospects for building pipelines for the infrastructure that’s needed to support natural gas demands in the U.S. could also bring additional benefits to U.S. manufacturers who support those build-outs.
The survey also uncovered a continued rise in the number of companies commenting to the investment community on how shale gas activity affects their business. In 2013, 40 U.S. manufacturing companies included shale gas impacts in their public filings, up from 29 in 2011. “More companies are publicly disclosing a link between natural gas production as a material advantage for their business and a source for growth in demand for their products,” noted McCutcheon.
PwC’s report also identified developments that could potentially impact the benefits of shale gas development to U.S. manufacturers. These include environmental issues, supply exceeding demand, insufficient natural gas refueling infrastructure, and changes in tax policy that could affect capital investments.
