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Business Benefits of Technology in Manufacturing


The key business benefits of new technology in manufacturing include:

 

Products and Productivity

Advances in technology have spurned new products and manufacturing processes. In turn, this has lead to improved productivity in manufacturing including:

  • Better product design
  • Improvements in supporting activities
  • Improved product economics - opening up new markets by products being affordable
  • Reductions in labor requirements
  • New market opportunties - market growth opportunities in regions that supply low-cost labor, making for better economics in both production and distribution.
  • Contract manufacturing - a new class of companies that provide third-party manufacturing capability.

 

Risk Management

Risk management is a decisive factor in all manufacturing sectors. Decisions must be made on:

  • Manufacturing location - domestically or overseas
  • Adoption of innovations or evolutionary improvements
  • Increase local labor or contract outsourcing

Most nations do not provide a least-risk environment to start or expand a manufacturing enterprise, in spite of manufacturing being an important element in most economies. Manufacturers need and environment that foster:

  • Individual freedom and political stability
  • Safety and security
  • Easy access to large and liquid capital markets
  • A skilled workforce with a work ethic
  • Easy access to a large consumer market
  • Better education
  • A supporting infrastructure

Each of these elements presents a complex risk profile for manufacturers, and each decision made by manufacturers must consider each element. This demands a solid decision making infrastructure that not only supports sound ecomonic decisions, but also reduces the risks at all levels.

 

Collaboration

Collaboration allows a group of companies to share the risks involved and facilitate the rapid adoption of a new technology. Collaboration, or partnering with a purpose, must consider:

  • Risk – of time and cost as well as risk in sharing resources and IP with a competitor or a supplier, and also the risk of failing to maintain a market lead or presence if you do not proceed.
  • Resources - cost-sharing helps reduce the resources needed to technological objectives
  • Resistance – within the company to getting involved at all.

The ability to communicate fluidly and collaboratively over distances loosens geographical linkages, alters organizational structure, and changes control structures amongst ancillary activities.

 

Energy Sustainability

Manufacturing processes are amongst the most energy-intensive industrial systems. By developing and adopting more energy-efficient technologies, the manufacturing industry can boost its productivity and competitiveness while improving national energy sustainability and reducing environmental linked to global climate change.

Even small efficiency enhancements to technologies widely used in industrial sectors can have a large impact if adopted across entire industries. This is particularly so in heat, power, and process heating systems. Improvements in combustion can also improve energy efficiency, reduce emissions, and enhance fuel flexibility.

Applying best practices to the basics behind many manufacturing processes [motors, steam, and compressed air systems] can save up to 30 percent of energy used in a plant in a few years.

 

Lean Mass Production

Lean production and flexible specialization have been introduced to update mass manufacturing to better align with todays market models.

Manufacturing models focus either on making a complete product or component based. In a component based value chain, much of the value is in the intellectual property of the components. Cross-national production networks disintegrate the value chain into constituent functions that can be contracted out to independent producers wherever those companies are located in the global economy. This strategic and organizational innovation, known as value [supply] chain management, means that production of even complex products can become a commodity service that can be purchased on the market.

Next: Business Intelligence In Manufacturing

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