Process manufacturing faces early challenges in 2016

As one of the leading consultancies around the Industrial Internet of Thing (IIoT) ARC Advisory Group has been helping its clients understand how and why to explore IIoT and its value to process manufacturing. Andy Chatha, president of ARC Advisory Group, discussed some of those issues with CFE Media in advance of the ARC’s annual conference in Orlando.

02/11/2016


Andy Chatha, president of ARC Advisory Group. Courtesy: ARC Advisory GroupAs one of the leading consultancies around the Industrial Internet of Thing (IIoT) ARC Advisory Group has been helping its clients understand how and why to explore IIoT and its value to process manufacturing. Andy Chatha, president of ARC Advisory Group, discussed some of those issues with CFE Media in advance of the ARC's annual conference in Orlando:

CFE Media: What's your overall outlook for 2016? What will be the key issues affecting manufacturing as we begin the new year?

Chatha: ARC is predicting another gloomy year for manufacturing due to both the modest global growth expected in light of the slowdown in China, Brazil, and Russia and the continued depressed oil prices, which will continue to reduce capital expenditures across a number of key industrial sectors.

CFE Media: Manufacturing was in a slump at the end of 2015. What are the driving factors for manufacturing going forward that will pull out of that slump?

Chatha: We expect the slowdown in manufacturing to continue a least through the first half of 2016, especially in upstream oil and gas and those manufacturing and service sectors that depend on upstream oil and gas for a significant portion of their business. On the other hand, the lower oil and gas prices are driving some large capital projects in downstream industries, such as petroleum refineries and petrochemical plants, where the reduced energy and feedstock prices help improve profit margins. This is particularly the case in North America, where several years ago chemical plants and refineries were being closed down by the score.

The global automotive industry also saw good growth in 2015 due in part to increased consumer confidence and lower gas prices, which stimulates sales of less energy-efficient, but typically much more profitable larger and luxury vehicles. Automotive manufacturing is also going through a transformation through digitization and robotics, which are increasing value for consumers and reducing design and manufacturing costs and increasing production flexibility.

We're also seeing a big focus on general manufacturing innovation driven by new technologies such as IIoT, additive manufacturing, robotics, and so on. Most manufacturers now realize that they must transform their operations through new information-driven technologies and approaches to survive.

CFE Media: Everyone is hearing about IIoT. Why should IIoT be important to manufacturers?

Chatha: ARC believes that the Industrial IoT, Industry 4.0, Smart Manufacturing and other initiatives will drive a transformation in manufacturing. IIoT connects previously stranded data from smart sensors, equipment, and other industrial assets with predictive analytics and other advanced applications running both in-plant on edge computing devices and remotely "in the cloud."

Despite initial concerns, many companies now realize that, when properly implemented, Internet-based technologies can provide appropriate security and availability. This further increases collaboration on the plant floor, throughout an industrial enterprise, and across a global value chain.

CFE Media: We talk a lot about IIoT, globalization, safety and productivity. What's the one big issue that you think manufacturers should talk about that doesn't get a lot of attention?

Chatha: Due to the short-term, bottom-line mentality of many manufacturing enterprises, I don't believe that the need to invest in and exploit innovation gets nearly as much attention as it deserves.

Click here to read this story in the digital edition.



Top Plant
The Top Plant program honors outstanding manufacturing facilities in North America.
Product of the Year
The Product of the Year program recognizes products newly released in the manufacturing industries.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
September 2018
2018 Engineering Leaders under 40, Women in Engineering, Six ways to reduce waste in manufacturing, and Four robot implementation challenges.
July/Aug
GAMS preview, 2018 Mid-Year Report, EAM and Safety
June 2018
2018 Lubrication Guide, Motor and maintenance management, Control system migration
August 2018
SCADA standardization, capital expenditures, data-driven drilling and execution
June 2018
Machine learning, produced water benefits, programming cavity pumps
April 2018
ROVs, rigs, and the real time; wellsite valve manifolds; AI on a chip; analytics use for pipelines
Spring 2018
Burners for heat-treating furnaces, CHP, dryers, gas humidification, and more
August 2018
Choosing an automation controller, Lean manufacturing
September 2018
Effective process analytics; Four reasons why LTE networks are not IIoT ready

Annual Salary Survey

After two years of economic concerns, manufacturing leaders once again have homed in on the single biggest issue facing their operations:

It's the workers—or more specifically, the lack of workers.

The 2017 Plant Engineering Salary Survey looks at not just what plant managers make, but what they think. As they look across their plants today, plant managers say they don’t have the operational depth to take on the new technologies and new challenges of global manufacturing.

Read more: 2017 Salary Survey

The Maintenance and Reliability Coach's blog
Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
One Voice for Manufacturing
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Maintenance and Reliability Professionals Blog
The Society for Maintenance and Reliability Professionals an organization devoted...
Machine Safety
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
Research Analyst Blog
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Marshall on Maintenance
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
Lachance on CMMS
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
Material Handling
This digital report explains how everything from conveyors and robots to automatic picking systems and digital orders have evolved to keep pace with the speed of change in the supply chain.
Electrical Safety Update
This digital report explains how plant engineers need to take greater care when it comes to electrical safety incidents on the plant floor.
IIoT: Machines, Equipment, & Asset Management
Articles in this digital report highlight technologies that enable Industrial Internet of Things, IIoT-related products and strategies.
Randy Steele
Maintenance Manager; California Oils Corp.
Matthew J. Woo, PE, RCDD, LEED AP BD+C
Associate, Electrical Engineering; Wood Harbinger
Randy Oliver
Control Systems Engineer; Robert Bosch Corp.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
Design of Safe and Reliable Hydraulic Systems for Subsea Applications
This eGuide explains how the operation of hydraulic systems for subsea applications requires the user to consider additional aspects because of the unique conditions that apply to the setting
click me