A Midyear Checkup on Manufacturing Trends

Earlier this year, we made a few predictions about the manufacturing industry for 2019. We did pretty well! Sean Riley tells you why…

Sean Riley Sean Riley

Earlier this year, I made a few predictions about the manufacturing industry for 2019.  I thought I’d check in to see how I did.

  1. My first prediction was that Internet of Things adoption would accelerate thanks to an uptake in edge analytics, scaling the IoT edge.

How did I do?

IoT adoption IS accelerating and the examination of applying edge analytics to multiple use cases IS increasing.  Companies like Dell, HP and Cisco are becoming more serious about creating gateways with the capabilities to host complex analytics on the edge.  And that level of investment strongly indicates broader market demand.  The IIoT continues to be at the forefront of IT analysts and consulting firms as they create messaging around this issue.

  1. I said that, with the rise of outcome or usage based cost models, financing for fixed assets like machinery will change dramatically – flipping financing and sales.

How did I do?

Companies like Gardner Denver and Ingersoll Rand continue to pursue the ability to move from selling usage-as-a-service (air-as-a-service for Gardner Denver!) to being able to offer necessary outcomes without bankrupting themselves.  It’s a delicate, long-term transition but continual improvements are made to meet with objectives.

  1. My next prediction was that manufacturers will aggressively drive digital advancement – from the shop floor to the top floor, i.e. you have to spend money to make money.

How did I do?

This prediction wasn’t exactly earth-shattering but, with the expected economic downturn, manufacturers are aggressively pursuing cost-reduction projects and IIoT on the shop floor is now one of the most widely pursued.

  1. Vision with action can change the worldWith merger, acquisition and divestiture activities, I said that manufacturers will rationalize and redirect their portfolios for a focus on new growth strategies – including products as a service and software.

How did I do?

During the first half of the year some manufacturing verticals realized higher than previous deal volume and sizes.  In other verticals, like industrial manufacturing, deal volume was relatively flat but deal value was up by 31%, according to PwC.  However, there was the mega-merger between Gardner Denver and Ingersoll Rand – which has the potential to stimulate more M&A from competitors as they seek to match the new scale of the merged company.

  1. I said that IT would focus on getting faster, by using a DevOps and digital-first approach, to unlock efficiencies and enable companies to re-envision how they operate altogether. In other words, there are no speed limits on the road to success.

How did I do?

Project delivery continues to be a major focus for IT and while DevOps has been in use the addition and popularity of microservices continues to increase.  Speed of delivery has moved to the forefront for CIO’s and microservices, API’s and a cloud first mantra are outcomes of this focus.

I think I did pretty well, overall! I’d love to hear what your manufacturing organization is doing in these areas and your thoughts on the timing of these initiatives.

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