6 (Mostly Digital) Trends Shaping Manufacturing in 2024

As the market sends mixed signals, certain technologies point to resiliency.

The digital revolution and the drive for competitive efficiency are pointing towards an increase in technology investments. As markets, supply chains and the economy remain dynamic and continue to send mixed signals, manufacturers are struggling with where to make investments and place bets over the next 12 months. Deloitte’s 2024 Manufacturing Industry Outlook and 2024 Tech Trends Report pinpoints several key economic and industry drivers, as well as trends that promise to shape the supply chain and manufacturing landscape in the coming year.

Some of today’s most potent trends were once yesterday’s predictions. Early research into the metaverse heralded the rise of digital twins in manufacturing, while the link between automation and sustainability is another phenomenon identified in manufacturing industry research. In 2023, the industry had a wind at its back when it came to these and similar investments: the 2021 Infrastructure Investment and Jobs Act (IIJA), the 2022 Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, and the 2022 Inflation Reduction Act (IRA), all of which promoted—and helped fund—advances in infrastructure, clean energy and semiconductor production.

But this is a new year. How is manufacturing changing in 2024?

Generative AI (GenAI) will likely change everything – eventually.

Research found that 80% of 104 business leaders surveyed across 26 industries believe GenAI will create efficiencies in their business but only 37% of those organizations are currently implementing GenAI into their systems. This will likely change, as GenAI applications hold the potential to create closed-loop manufacturing systems that use data to make real-time adjustments automatically. They can handle variability humans can’t, which heralds new standards of efficiency. As this capability matures, early efforts can focus on using and testing GenAI in areas like maintenance, repair and factory layout.

The retiring workforce doesn’t have to take its knowledge with it.

The National Association of Manufacturers (NAM) found that almost three-quarters of surveyed manufacturing executives feel attracting and retaining a quality workforce is their primary business challenge. According to our 2018 research, there is a critical talent gap that may leave 2.4 million manufacturing jobs unfilled through 2028. The exit of aging workers threatens to deepen that shortage but companies that set up alumni programs can keep retirees engaged and pass their skills to younger counterparts.

Demand for customization drives a new focus on digital agility.

Disruptions over the last three years forced manufacturers to emphasize resilience. Now that they have gone through those transformations and stabilized new standards of efficiency, they are shifting focus to meet a new externality: Consumer demands for customized goods. Nimble, agile operation is the key and many are finding that digitization helps them make high-volume/low-cost production profitable.

The classic ISA-95 stack is flattening, responsibly.

Some big players are pivoting away from the ISA-95 tech stack – the international standard for interfaces between control and enterprise functions – toward collapsing various layers to drive efficiencies and make systems more integrated over time. These organizations need to prioritize cybersecurity and monitor risk as they shed or merge layers with large amounts of data.

Source: IndustryWeek

Smart manufacturing technologies: to the metaverse and beyond.

In 2023, companies used smart manufacturing technology, including digital twins, 3D modeling and IoT, to lay the foundation for leveraging the metaverse. The research found revenue driven by the industrial metaverse is projected to reach $100 billion by 2030 and in 2024, these technologies are also likely to help scale manufacturing improvements across disparate processes and teams while supporting decarbonization and the journey to net-zero. As spatial computing and the metaverse shift from novelty to practicality, the manufacturing industry stands to benefit from improved worker efficiency and safety, an era of simplified operations and better employee experiences.

Digitization unlocks near-term sustainability achievements.

Traditionally, moves toward sustainability focused on avoiding rework, reducing scrap and making resource use more efficient. Now, investments in digitization are driving improvement in overall equipment effectiveness (OEE) alongside long-term cost savings. A digitized asset base can reduce waste automatically and propel manufacturers toward “green” operations even faster.

What Happens Next?

The sum of these trends will provide a greater, more central role for technology in supporting manufacturers in their quest for efficiency, resilience and future advantage. Even those who turn back the dial on tech investments are not likely to turn away from digital transformation entirely. Indeed, some of these developments make technology not only more effective but more cost-effective as well. In our view, there is a broad embrace of the smart manufacturing approach, the industrial metaverse and the broadening application of GenAI.

Bottom line: The US manufacturing industry is likely to continue fueling its technology transformation. Not just despite the challenges it confronts but as a way to overcome them. And the manufacturing landscape that emerges will differ fundamentally from the one we knew only a few years ago. When factories get smarter, operations generate actionable insights alongside products. They grow naturally more resilient against cyber-attacks. The transparency that bolsters workforce transparency and trust will help improve the overall culture. The industry will likely see other supply chain disruptions, talent shortages and skills gaps in the future because that’s the way of the world, but it will be better equipped to predict and handle them.

From Prediction to Prescription

Insights are only as good as the actions they help direct. What should manufacturers do with this glimpse into the near future? Broaden their view of what technology can accomplish—and experiment.

We’re way past robot arms. Digital tools can improve “soft” pursuits like employee retention and community engagement. They can assemble solid bottom lines through cost and revenue enhancement just as surely as they assemble finished goods. And they can help clarify the view ahead by training a predictive lens on supply chains, revenue streams and accounting practices. Is customer loyalty on your to-do list? GenAI can help there, and then it can help benchmark leading practices and forge external relationships that contribute to a zero-emissions portfolio.

The most powerful tool a manufacturer can bring into a new year is confidence. Many of the forces swirling around the industry today feel calculated to erode that feeling. A consideration is right there for the taking: investments in transformative technologies that can keep a company ahead of the headlines—and the competition.

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