Growth expected in 2014 manufacturing sector

The 2014 manufacturing outlook is positive, according to Dr. Helmuth Ludwig, CEO, Siemens Industry Sector U.S., who discussed manufacturing trends, such as digital manufacturing and big data, and strategies for continuing challenges, such as developing engineering talent.


Dr. Helmuth Ludwig, CEO, Siemens Industry Sector U.S., is upbeat about the U.S. manufacturing outlook for 2014 and beyond. Courtesy: SiemensThe growth in the U.S. manufacturing sector is expected to be positive for 2014 and beyond, said Dr. Helmuth Ludwig, CEO, Siemens Industry Sector U.S. Economic growth is expected to continue in key markets, he said in a Jan. 17 online press conference at the North American International Auto Show in Detroit. Continued digitization of manufacturing will help. While predictions can be difficult, Ludwig noted, doing the right things in manufacturing will help continue growth. His summarized observations follow.

In the U.S., the emerging generation will continue to have opportunities to make things and make things right as manufacturing continues to go digital.  

Various sources cited point to positive recent manufacturing results, including Goldman Sachs’ 9% increase in industrial spending, the Purchasing Managers Manufacturing Index (PMMI) growth at 55 (above 50 is growth), and business outlook of 67, the highest rating since September 2011. The new order index is strong, and industrial production is at a 10-year high.

Automotive innovations, growth

The automotive industry, a consistent innovator and contributor to U.S. manufacturing growth, noted a five-year sales high for light vehicles. International companies continue U.S. investments. Volkswagen AG, for example, announced on Jan. 12 that it would spend $7 billion more on its U.S. manufacturing base over the next five years.

Marking the 100th anniversary of Ford’s game-changing assembly line earlier this year, Ford, Comau, and Siemens collectively built an assembly line at the Detroit auto show, demonstrating cutting-edge manufacturing efficiency. Also in automotive, the increasing U.S. Corporate Average Fleet Efficiency (CAFE) requirements—up to more than 50 mpg by 2025—will continue to promote innovation and investments in power train manufacturing.

Oil and gas, lower costs

Oil and gas industry investments have been huge, driven primarily by shale gas opportunities. Lower resulting energy costs are feeding significant new investments that use natural gas and petroleum as a feedstock, such as metals industries, including a direct reduction iron ore plant. The chemical industry, which uses petroleum feedstock, expects growth as well, with more than $100 billion targeting new U.S. plant construction or existing plant expansion, according to Dow Chemical’s tally.

Investments are supported by still low interest rates and strong cash reserves on balance sheets.

Integration, digital manufacturing

At the 2013 Siemens Summit in New Orleans, the company demonstrated its Totally Integrated Automation (TIA), providing full integration from devices to the enterprise. Courtesy: CFE Media, Mark T. HoskeDigital manufacturing offers significant opportunities for going digital, which can translate to significant efficiency increases. In one example, a change in manufacturing software resulted in 24% less energy use for the same manufacturing results.

Advanced modeling integrated with manufacturing speeds time to market and enables innovations once perceived to be impossible.

Virtual design and simulations helped with design of the currently deployed Mars Rover, which is about six times larger than any previous controlled landing on Mars. One of the major challenges was landing such a massive vehicle onto the Mars surface. Designs were tested thousands of times in simulation software, using parachutes, rockets, and finally a sky crane to lower the vehicle safely.

Paralleling the Rover experience, software can also increase productivity in manufacturing by running a virtual machine, a digital twin, of plant-floor systems.

The U.S. has particular advantages in achieving software-driven manufacturing advancements. The U.S. has the largest critical mass of software investment: 65% of the top 100 software companies have U.S. headquarters, and 79% of software revenue is derived from U.S.-based companies. This provides a basis for sustainable manufacturing strength. Software helps enable efficiencies through remote monitoring, services, optimization, big data for manufacturing, minimized downtime, and cyber security and security system support.

Manufacturing is fun

Also positive for the future of U.S. manufacturing is renewed attention to science-, technology-, engineering-, and math- (STEM) based curriculum, showing young people that making things is innovative and fun. Software and virtual design are integrating in consumer markets via continuing 3D printing and additive manufacturing advancements, also helping to make manufacturing attractive for young people.

An apprenticeship program at Piedmont Community College in Charlotte, N.C., is showing how advanced software can be applied in a manufacturing environment.

Those with a year or two of mechatronics training can earn a higher average salary than those with a liberal arts college degree, without large debts to repay. The next generation wants to make things right, and advanced manufacturing partnerships between universities and leading companies are helping.

A second U.S. Manufacturing Institute was just announced in North Carolina. The first, in Youngstown, Ohio, is a National Additive Manufacturing Institute, and Siemens donated $440 million in software to help. Additive manufacturing can be used for 3D design and manufacture of finished parts, or parts that can be finished with traditional subtractive manufacturing techniques, such as CNC machining.

Advice to manufacturers

For a stronger future, manufacturers should continue investments in advanced manufacturing education partnerships, virtualization, optimization and energy efficiency, and manufacturing digitization that links design to manufacturing for long-term improvements. Advanced software allows more rapid manufacturing improvements, and the U.S. is ideally positioned to take advantage of those capabilities.

Big data, used in manufacturing for years, can be used for remote monitoring, optimization, and energy efficiency. In one example, smarter robotic arm movements used 25% less energy with changes only in software. Companies are integrating product lifecycle management (PLM) software with computer aided design and computer aided manufacturing (CAD/CAM) software and manufacturing execution system (MES) software. Larger companies like DuPont, Dow, and Ford are leading the way in new production methods. Smaller companies that are linked by supply chains to larger companies can also apply these methods for greater product transparency and productivity. Standards help data flow through the value chain, as companies switch from proprietary systems to ones that use open standards.

It’s an exciting time to be in manufacturing, combining the virtual and real world, helping the current and next generations to design and produce better products.

- Mark T. Hoske, content manager, CFE Media, Control Engineering and Plant Engineering, mhoske(at)


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