Innovation 12
Top Megatrends in Manufacturing
A new era has dawned in the manufacturing industry which is largely driven by digitalization, information technology and customization. These changes can be defined by several megatrends that are sweeping across the manufacturing footprint.
The pros and cons of the Digital Age
Information technology, along with other emerging technologies, are causing a dynamic and continuous change in the ways things get done. For example, smartphones today are miniaturized, have high processing capabilities and are way cheaper than their counterparts from the 60s.
On one hand while this can be a good thing, it also has the power to disrupt whole industries and reshape the workforce like the extinction of weavers and camera film makers.
But new technology and innovation brings with it new processes and advanced business models. For example, 3D printing is enabling the mass production and customization of products by small firms. Other emerging technologies to look out for include nanotechnology.
Big Data and Real-Time Information
The capacity to process large volumes of data for economic purposes has transformed customer care across retail and finance sectors. Big Data also plays a crucial role in manufacturing, with the fast-track incorporation of information technology. This will lead to more accurate forecasting and analysis of plant performance.
Big Data is buoyed by open platforms and crowdsourcing, which enable customer interaction like never before. The design, distribution and service is slated to get a complete overhaul with manufacturers becoming more knowledgeable.
Revolutionizing the workforce
The demographics of the workforce are rapidly changing with 10,000 baby boomers retiring each day. This is a cause of worry among manufacturers who see the institutional knowledge being lost and finding it hard to replace them with millennials who are disinterested in manufacturing jobs. Today, manufacturers are in dire need of a new wave of workforce that is equipped to work on the 21st-century shop floor.
Tiny Canadian Battery Company Could Play David to Goliath Tesla
Tesla Motors Inc., Panasonic Corp. and Samsung Electronics Co. are the giants who are battling it out in the race of mass producing large-scale rechargeable batteries. However, a tiny company may have hit the jackpot: Electrovaya Inc.
This Canadian company primarily manufactures lithium-ion batteries. It is owned and operated by an adjunct professor of electrochemistry at the University of Toronto. While the company’s portfolio might not seem impressive at first glance, investors are lining up at the door with Bloomberg New Energy Finance claiming its valuation at $250 billion by 2040.
Electrovaya’s shares have risen to five times their market value of C$297 million ($228.78 million) over the past 12 months. On the other hand, Tesla’s Powerwall failed to perform and they came down by 20%.
The company has risen at lightning speed, signing several deals worth millions of dollars. Electrovaya’s technology has 400 patents to its name and that is what gives the company its edge claims CEO Sankar Das Gupta. Not only is its flexible ceramic separator highly heat resistant, the company’s production processes are solvent-free which makes them greener for the environment and gives batteries double the life of a conventional one.
Indeed, the CEO claims to want to be the next General Electric. The small firm is taking on goliaths like Panasonic and Tesla, who are involved in joint product development. These two companies are involved in creating a $5 billion lithium-ion gigafactory in Nevada.
To finance their venture, the Canadian company has found some innovative solutions. It bought out Daimler AG’s lithium-ion battery manufacturing plant which was the largest in Europe. However, after the automaker decided to relinquish the business Electrovaya bought it at a fraction of its actual value.
This deal was also of utmost important due to the fact that it consisted of the factory’s proprietary ceramic separator technology. As the bane of a lithium-ion batteries is fire, the company seems to have made a strategic decision at the right time.
CEO Das Gupta claimed that the combination of German and Electrovaya technology will put them way ahead of Panasonic and Samsung. Today, the only competitor he sees is Polypore International Inc.’s lithium-ion separator. This company was acquired by Japan’s Asahi Kasei Corp. for $3.2 billion last year.
Beign a small company, Das Gupta says that the only problems he encounters is working capital. He hopes that the backing of Export Development Canada will help with the guarantee for lenders. While the company is the best bet in the energy equipment today, there’s no saying where the energy-storage marketplace tomorrow.
Boeing to Develop New Mid-Size Plane Designs
Boeing Co. has seen a market for its first passenger jet since the 787 Dreamliner. The American airplane-making company is considering designs for mid-range planes which will carry travellers from New York to London and Sydney to Shanghai.
Their new aircraft is the middle child in its product offerings between the biggest single-aisle 737 and smallest widebody 787. This is a largely untouched market where Airbus Group SE is just starting to regard with potential.
Boeing has predicted sales of these mid-sized jets between 4,000 and 5,000 as airlines will set new routes for these planes. While the U.S. plane manufacturer is excited about outing plans to action, it does need to focus on a reasonable price point by closely monitoring production costs.
Mike Delaney, general manager of airplane development at Boeing felt confident in the success launch of these planes, saying that the planes would be ready for the commercial market by the next decade. Research conducted across 36 airline clients has boosted Delaney’s confidence in the product success, after years searching for something to replace the 757 which has fallen out of production.
The head of product development Mike Sinnett has started to get a feel for the numbers that airline companies will be willing to pay for the performance benefits they would expect for airplanes with a capacity between 200 and 270 people, and a range of flight around 5,000 nautical miles.
While Boeing is taking things slow and steady, the business end does seem like a challenge. Industry specialists have estimated demand at an orthodox figure of just 1,500 planes. If Boeing is to develop a design from scratch the costs they would incur would be in the ballpark of $10 billion. Also, this time let’s hope that Boeing has learnt from its mistakes that held up the Dreamliner’s 2011 debut by more than three years.
3 Things Successful Innovative Manufacturers are Doing
Reduction in cost and making manufacturing processes more efficient is the one of the top growth strategies of most manufacturing CEOs. This can be seen as change sweeping across the operating model like rearranging the plant layout, strengthening their footprint, adopting advanced manufacturing techniques like 3D printing to robotics.
Innovation in the business model is possibly the biggest challenge that manufacturing CEOs are facing. The fact remains that conventional operating models are undergoing a complete overhaul with agility being at the forefront to capture new market segments and sales channels.
Here are a few areas that sees innovative manufacturers targeting for maximum impact.
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Race with technology
While most companies plan capital investments over a five-year period, technology continues to evolve at the speed of light. Therefore, the traditional modes of investment and payback, as well as managerial speed needs to be adjusted to sync with the rapid technology evolution. Consumer electronics companies, for example, account for flexibility in adopting new technologies in their product development models.
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Keeping up with innovation
Innovation is the buzzword for manufacturers today. All too often, it is confined to a lab or small, focused team. Balancing profits from existing line of products versus getting employees to learn new technologies can be a tough situation for manufacturers. Today, innovative companies need to take in the various pros and cons of new technologies and focus on “continuous improvement” techniques.
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Look long term
While no one can really predict how technology will evolve in the next 10 years, top manufacturers are trying to draw a parallel between their innovation investments and long-term business goals. Manufacturers are choosing investments that will lower operating costs, reduced risk and speed up operational performance for their clients. They are trying to relay their ideas to their employees, suppliers, customers, and shareholders for a 360◦ integration of their innovation investments.
