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U.S. manufacturing continued to expand at an accelerated pace in May, the Institute for Supply Management reports. The factory index rose from 57.3 to 58.7, as 16 or 18 manufacturing industries reported growth and order backlogs grew by the largest amount in 14 years. This capped off 109 months of consecutive economic growth, reflecting expanding business vitality, according to the Institute for Supply Management. Reshoring, foreign direct investment, tax cuts and lifting of regulatory restrictions are some of the economic factors driving this growth, says Gray Construction.
Key technology innovations such as the Internet of Things, smart manufacturing and 3D printing are also helping drive this sustained growth, says the Association of Equipment Manufacturers. Here’s a look at three of the key technology trends fueling the growth of global manufacturing today.
The Industrial Internet of Things
One of today’s biggest trends in manufacturing is the Industrial Internet of Things, which connects sensors in factories to the Internet at large. Nearly 100 percent of manufacturing companies regard the Internet of Things (IoT) as the most significant technological innovation of the decade, and over eight in ten are already pursuing IoT applications, a Zebra Technologies Corporation survey reports. B2B spending on IoT technology will reach $267 billon by 2020, with discrete manufacturing representing one of the foremost drivers of this spending, Boston Consulting Group projects.
One of the most important manufacturing applications of the Internet of Things is using information gathered from sensors for predictive maintenance. For example, IoT sensors can detect corrosion inside a pipe before it becomes an issue. Using the IoT for predictive maintenance can reduce maintenance planning time by 20 to 50 percent, while reducing overall maintenance costs 5 to 10 percent, Deloitte estimates.
The Industrial Internet of Things is developing hand-in-hand with smart manufacturing, which combines IoT sensors with AI data analytics to provide actionable insights into manufacturing processes and equipment. Almost one-third of all manufacturing processes and equipment already use smart sensors and embedded intelligence, according to a study by The MPI Group. The smart factory market is growing at a compound annual growth rate of 9.3 percent, and will be worth $205.42 billion by 2022, Markets and Markets projects.
Smart manufacturing software is designed to extract practical business intelligence from IoT sensors. For instance, GE has developed a smart manufacturing platform called Predix that is being used on assembly lines to predict whether or not heavy-duty capacitors being assembled will pass required electrical tests at the end of the production process. Predix determines this by analyzing data gathered from IoT sensors that measure factors such as temperature, humidity and dust particle count. GE estimates that in conjunction with the Industrial Internet of Things, smart manufacturing will add $15 trillion to global GDP through productivity gains over the next two decades.
Another key technology transforming global manufacturing is 3-D printing, or additive manufacturing. Three-dimensional printing speeds up production time and avoids waste by adding only as many layers of material as is needed to form a given shape, rather than cutting away material to form molds. The reduction in wasted material translates into lower costs. To illustrate, Volkswagen has been able to reduce tool lead time by 95 percent while cutting tool development costs by 91 percent through the use of 3-D printing.
Three-dimensional printing also offers manufacturers greater design flexibility, since the process depends on digital designs that are limited only by the imagination, and since 3-D printers can create objects from almost any type of material. For instance, seal designer Apple Rubber uses 3-D printing to provide clients with o-rings in over 8,000 sizes using specialized rubber materials such as FKM, Buna-N and EPDM, suitable for a wide range of applications from aerospace to healthcare. Three-Dimensional printing can also form objects using substances as diverse as concrete, electronic circuitry and organic materials. The demand for the design flexibility and cost savings afforded by additive manufacturing is fueling an annual compound growth rate of 16.5 percent for the 3-D printing market, putting it on track to reach a value of $23.79 billion by 2025, Grand View Research projects.
The Industrial Internet of Things, smart manufacturing and 3-D printing are three of the top technology trends driving the growth of today’s global manufacturing market. As these technologies continue to mature and find new applications, manufacturing will continue to metamorphosize, becoming more connected, smarter, more efficient and ultimately, more profitable.