The increased competitiveness of U.S. manufacturing has been talked about for some time; but now a number of studies are adding the weight of research to the conversation. The U.S. is poised to regain its number one manufacturing status as it embraces digitization, automation, and electrification in reinventing the sector.
Much has been made in recent years of the renaissance of American manufacturing, particularly in the wake of China’s emergence as the global leader in manufacturing competitiveness. But the times, as an iconic American singer once noted, they are a changin’. The United States is poised to regain its number one status.
According to a new survey of global CEOs and other senior executives—the 2016 Global Manufacturing Competitiveness Index developed by Deloitte and the Council on Competitiveness—the advanced manufacturing technologies at the core of Industry 4.0 are driving the U.S. back to being the most competitive manufacturing nation in the world. According to the study, the U.S. is currently ranked second behind China, but is expected to regain the top position by the start of the next decade. A recent article in Industry Week observes the drivers of this development: “U.S. manufacturers are investing in technologies such as predictive analytics, the Internet of Things (IoT), smart factories, and advanced materials that will be keys to improved competitiveness in the coming years.”
Ticking the Right Boxes
A study by the German research group Roland Berger on digital manufacturing in the automotive sector underscores the import of the Deloitte survey. According to Roland Berger, the U.S. “ticks all the right boxes” for locating digital factories to compete and win on a global scale. Among the advantages they see the U.S. as holding:
- Digital factory ecosystem. The United States is home to eight of the top 10 information technology companies, including such vaunted names as Intel, Microsoft, and Google. The U.S. has a handful of tech clusters, including San Francisco, Seattle, and Boston. These clusters are crucial to the formation of talent pools necessary for all firms in the digital factory ecosystem and are supported by world-class educational facilities such as Stanford, the Massachusetts Institute of Technology, and Carnegie Mellon.
- Modern infrastructure and proximity. Digital factories enhance the value of manufacturing clusters. The U.S. possesses a unique combination of automotive clusters, reliable transportation infrastructure, and Internet integration.
- Educated labor force. Digital factories will need a large number of employees with degrees in science, technology, engineering, and mathematics (STEM) and the U.S. has one of the best workforces for meeting these demands. The U.S. has [more than] 3,200 colleges and universities that offer degrees in the STEM fields that turn out [more than] 570,000 graduates each year. For an automotive OEM or supplier looking to implement a digital factory, the U.S. has the right talent base to meet the demand—especially compared to emerging markets.
- Government support. The U.S. is an attractive place to invest in digital factories due to the amount of federal and local incentives being offered to invest in these technologies and create the manufacturing foundation of the future.
Examples of automotive companies taking the digital factory path in the U.S. include Maserati and Faraday Future (Faraday). Maserati teamed up with Siemens in launching the Maserati Ghibli in 2013 using a suite of simulation and tracking tools to streamline production and design. The complex production processes were planned, monitored, and optimized using software. Maserati also employed software for flexible automation of the production line and even simulated the production process before committing to a production line configuration. Finally, Maserati elected to digitize the design using NX software to improve communications across functions and increase the pace of innovation.
Faraday, which unveiled a stunning electric vehicle concept at this year’s Consumer Electronics Show, is investing $1 billion in a 3-million-square-foot, state-of-the-art digital manufacturing facility on approximately 900 acres in North Las Vegas. The project is expected to create 4,500 direct jobs on site. While the company is not expected to move to production until 2018, its to-market arc appears to be even faster than that of Tesla.
How to Move Forward
“Taking the path to the digital factory is a choice manufacturers will have to make or be left in the wake of competition,” says Raj Batra, president of Siemens Digital Factory. “The competition is not just within domestic economies, but rather is global; companies must look at the global level, and the global development of digital manufacturing, to stay competitive.”
The Deloitte study underscores this perspective by pointing to the increasing importance of the so-called “Mighty Five”: Malaysia, India, Thailand, Indonesia, and Vietnam. “These nations could represent a ‘New China’ in terms of low-cost labor, agile manufacturing capabilities, favorable demographic profiles, market, and economic growth.”
At the recent Manufacturing in America symposium, futurist Jim Carroll advised manufacturers to “think big, start small, and scale fast” in order to begin the journey down the path to digital factories. The Roland Berger report lists a number of specific use cases that companies should prioritize right now as they incorporate Industry 4.0 technologies. These should be top of mind as initiatives move forward:
- Demand-driven provision of material and tools
- Additive manufacturing/rapid prototyping
- Self-optimizing systems
- Unitary, RFID-based parts tracking
- Smart storage
- Predictive maintenance
- Smart handbooks and process documentation
- User-friendly operations dashboards
“It’s not just about buying software,” says Batra. “The steps are rather clear: Assess your capabilities, identify your goals, and then make and implement a plan of how to get where you need to. When it comes to doing this, Siemens can help. We’ve proven it around the world.”Have an Inquiry for Siemens about this article? Click Here >>