Rethinking conventional wisdom on manufacturing

With the conventional wisdom about manufacturing blown to bits by the scope and depth of the 2009 recession, ARC Advisory Group president Andy Chatha said there needed to be a new paradigm as manufacturing tries to move forward. “Most of us have been doing a lot of rethinking in the last year or so,” said Chatha at the opening of ARC's World Industry Forum in February in Orlando.





With the conventional wisdom about manufacturing blown to bits by the scope and depth of the 2009 recession, ARC Advisory Group president Andy Chatha said there needed to be a new paradigm as manufacturing tries to move forward.


“Most of us have been doing a lot of rethinking in the last year or so,” said Chatha at the opening of ARC's World Industry Forum in February in Orlando. Chatha spoke to one of the largest gathering of manufacturing industry suppliers and leaders in the past three years. The three-day event covered issues including operational excellence, asset lifecycle management and cyber-security issues.


For Chatha, though, the recovery starts by pulling together the disparate parts of the manufacturing operation by using technology and management to build greater collaboration throughout the enterprise.


“Collaboration through all different departments is really important to come upon with new breakthrough ideas,” Chatha said. “Even though business issues haven't changed much in the last few years, the intensity has grown.”


Oracle's partnership with Mitsubishi Automation that was announced at the Forum is an example of collaboration between the enterprise systems and the plant floor equipment to drive greater, more seamless knowledge exchange. Some of it is encouraging collaboration throughout the people in the enterprise. This is more challenging than connecting a thousand nodes to the network, because nodes generally don't create a ruckus. After energy management, change management is a critical issue for manufacturers.


“Most people are familiar with a physical asset, but you need people to run them,” Chatha added. “Most important, you need right information at the right place at the right time. Collaboration is not just for people. It has to happen for devices as well.”


There were other issues that came out of this year's ARC World Industry Forum:


1. Energy: More than anything else, suppliers are looking at ways to help customers save energy costs because plant managers are being incented and challenged to manage these costs. The technology to manage costs is in place. With people costs flat and plants still looking for new ways to leverage cost savings, energy management is the logical place to start.


2. The importance of people: Asked at the opening of Tuesday's session what the key issue they face is; 26% of the audience said workforce development and the skills gap; 25% said systems and technology; and 20% said asset management.


3. There is budding optimism: Most suppliers agree that the fourth quarter of 2009 was better. It was better than 2008, of course, but it was better than they expected. Michel Crochon, executive vice president of Industry for Schneider Electric, noted that the signs of real growth will be when the OEM business starts to accelerate. Right now, the projects being driven have a good deal to do with the global stimulus packages. When that starts to translate into expanded projects will be when the recovery starts to take a foothold.




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Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

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