Manufacturing Trends in 2015

Expect the reshoring trend to slow down a bit in the coming year, while robotics and Internet of Things activity prepare to burst forward, according to Cisco’s analysis of manufacturing trends.

Source: www.reshorenow.org
Source: www.reshorenow.org

As we approach the end of the year, it’s often interesting to reflect on some of the trends we saw during that time. How many times do you suppose we heard the word “reshoring” over the past year? I think it’s safe to say that stories and sometimes debates about the return of manufacturing to the U.S. from countries with lower labor costs were among the most popular. In many cases, those discussions about reshoring have gone hand in hand with talk about robotics, and whether our metallic brethren are helping to bring more jobs to the U.S. or stealing them away.

Don’t expect the discussion to be over quite yet as we head into 2015. But the scene might shift a bit, according to Doug Bellin, global senior manager for manufacturing and energy at Cisco. “This time last year, we said there’s going to be a pretty dramatic growth in U.S. manufacturing,” he says. “We see that continuing, but probably slowing a little bit for multiple reasons.”

One reason for a slowdown in reshoring is that the easy things to bring back home have already been brought back. “But at the same time, looking at the world economy, we’re seeing a little bit of a sluggishness probably still going forward in Europe,” Bellin says, “and a little bit of the deceleration of what’s going on in China.”

A key reason for bringing manufacturing back to the U.S. was that labor costs in China were no longer as low as they once were. Once you factor in shipping and other supply chain costs, the delta between China and North America was no longer so attractive. “But now with China slowing down, the increase in wages has started to taper a bit,” says Bellin, who reshored himself a couple years ago after 12 years in Asia-Pacific. “We see that affecting a little bit some of the reshoring or onshoring.”

Meanwhile, the explosion that occurred in the robotics industry has already started to taper a bit, Bellin says. There was a huge explosion in robotics about three years ago, he says, as the cost of equipment started to drop significantly. Runtime costs were also lower, with robots becoming easier to program, reprogram, manage and maintain.

The growth in robotics fell off a bit the past year or so, though, Bellin says, but look for that to change in 2015. “We see us going back into good growth curves, more like 30-50 percent; good double-digit growth curves,” he says.

Another trend to look for in the coming year will be something along the lines of robotics as a service. We’re hearing more about this concept in general—the idea of paying for the services received rather than the equipment. “We’ve talked for years about machine as a service. You pay for the output, and it’s the machine manufacturer’s responsibility to get it to that level,” Bellin explains. “Robotics didn’t really have that in the past as much.”

But now a few robotics suppliers have put this type of idea in place as well, aiming for zero downtime robotics. “The vendor will guarantee that and monitor, manage and maintain that thing for you,” Bellin says. “Because taking some of the pain away from the manufacturer, you’re moving down that stream into the mid-market.”

In response to some of the debate about robots vs. humans in the job market, Bellin takes the stance that robotics does not put U.S. employment in jeopardy. “They’re not replacing jobs, but adding to the capabilities that people are doing,” he contends. “If they are replacing some components in the manufacturing environment, the skillset to support that needs to move up into the IT space.”

Other trends continuing to grow in 2015, Bellin notes, will be wireless connectivity, 3D printing, and the Internet of Things (IoT). “The proliferation of sensors is going to still keep exploding and exploding as we go forward,” he says. “The infrastructure is getting more prevalent to support that, both wired and wireless.”

But the expected growth also has much to do with people’s ability to process the data coming from those sensors. “It’s not the sensor; it’s the intelligence about what the sensor is giving you,” Bellin notes. “Getting that has become easier because people have done it, and are sharing that information.”

Bellin expects another jump in IoT growth as manufacturers learn how to bridge the gap between sensor data and useful production information. “We’re probably closer to jumping that chasm, and the mass adoption is starting to occur now.”

Wireless technology is a significant factor in sensor growth as well. Cisco saw this as it evaluated its architecture for the connected factory. “When we added a wireless flavor to that architecture, that made it easier for companies to implement,” Bellin says.

Though most people probably think of 802.11 standards when they think of wireless, Bellin adds, the key to using more sensors in remote locations is 802.15, which uses less power. The technology incorporates a tolerance level into the sensors so they only send data when something goes wrong. “We’re seeing more sensors in the 802.15 than 802.11 because of that reason,” he says. “It’s been adopted incredibly well in the oil and gas, water/wastewater and utilities markets.”

 

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