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ByRamanMehta

OPINION

4 key trends to watch in smart manufacturing and supply chain

IndustrialIoTandbigdataareconvergingtoenabledemand-driven'smartsupplychains.'Theadvancementsin3Dprintingand
'AdditiveManufacturing,'coupledwithsupplychainefficiencies,couldmakedistributedmanufacturingareality.

CIO | Sep 9, 2015 6:50 AM PT

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IrememberreadinganMITpaperonmanufacturingtechnologytrendsacoupleofyearsago.Ithada
fascinatingmentionof"AdditiveManufacturing"(AM)andhowitcouldbeagamechanger.Oneofthebiggest
challengesfacingautomotive,aerospaceanddefensemanufacturesisthelimitedshapesapartcanbecut,
moldedorweldedin.Ontheotherhand,adigitally3D-printedpartcanbemoldedintoaninfinitenumberof
shapes.AccordingtoindustrystandardASTMF2792-10,AMisdefinedas,"Theprocessofjoiningmaterialsto
makeobjectsfrom3Dmodeldata,usuallylayeruponlayer,asopposedtosubtractivemanufacturing
technologies."

Keytrendsinsmartmanufacturingandsupplychain

ThepromiseofAMistheuseoflessmaterial,lightweightalloysandtoprovidefastercycletimeduetorapid
prototyping.TheAMprocesseswouldproducelessscrap,addresscomplexgeometriesandimprovestrengthto-weightratios.AMhasthepotentialtomovemanufacturingfrommassproductioninlargefactorieswith
dedicatedmachiningandtoolinglinestoaneraofmasscustomizationanddistributedmanufacturing.
ItwouldbeinterestingtowatchhowAMmaturesintheyearstocome,becauseitisstillinearlystages.AMcost
centersarecurrentlymoreexpensivethantraditionalCNCmachining,andtheproductionrateissloweronce
youmovepasttherapidprototypingphase.Thepowderedmaterialavailabilityandsuitabilityinavarietyof
industrialapplicationsisstillevolving.ThemechanicalpropertiesofthepartsproducedwithAMhavetobe
proven.Itisespeciallyimportantintheindustriessuchasautomotive,aviationandenergy,wherefailureofa
parthasdirectsafetyimplications.
ThenextkeytrendIseecomingisamoreprominentroleofInternetofThings(IoT)inextendedsupplychains.
IoTcanhelpcompaniesprovideimprovedpredictabilityofcustomerdemandwithrealtimevisibilityof
productandservicedemandsignals.Inaglobalsupplychain,strategicdeploymentofIoTtechnologiescan
improveassetutilization,customerservice,workingcapitaldeployment,wastereductionandsustainability.
Realtimecommunicationbetweenmachines,factories,logisticprovidersandsuppliersprovidesimproved
visibilityontheend-to-endsupplychain.
IoTcanaddresscompliance,regulatoryandqualityreportingrequirementssuchaspartstraceabilityand
productgenealogy,emissionsandcountryoforigin.WithIoT,organizationsarebettersuitedtotrackshipped
productsforwarranties,returnsandpredictivesupportformaintenance.
TherealpremiseofIoT-enabledsupplychainsistodelegatedecisionmakingonsomeoftheoperational
aspectstosmartobjectsandsystems,basedonrealtimeanalyticsandmachinelearningalgorithms.
OneofmyconcernsisIoTsecurityespeciallyonhowtoprotectdeeplyembeddedend-pointlegacydevices
thathavelimitedresourcesandinterfacingmechanismsavailable.

Valuedriversforsmartmanufacturingandsupplychain

Thisbringsustocustomer-andmarket-drivensupplychains.Mostcompaniesthinktheydotheirsupplychain
planningbasedonthedemandinrealitymostofthetimeitisnothingbutadisguisedforecastbasedsupply
chain.Togainandsustaincompetitiveadvantage,theprinciplesofleanmanufacturing,justintimeand
inventorycontrolaresimplynotenough.Organizationswouldneedtobenotonlyalignedwithtruecustomer
demandbutalsoshapethedemandusingtechnologyandanalyticaltools.
Supplychainsneedtomoveawayfrombeingforecastdriventobecomedemanddriven.Forecastsbytheir
verynatureareinaccurate.Youcannotsimplygobyhistoricsalespatterns,throwincurrentmarketconditions
andseasonality,andhopeforthebest.Oneneedstoshapethedemand,thegoalneedstobemaximizationof

theprofit,notsimplyreductionofcostormaximizationofrevenue.Theessenceofdemandshapingisknowing
aboutyourmostprofitablecustomersandproducts,andprotectingandpromotingthem.
Allcustomersarenotcreatedequal.Thedatasciencealgorithmscanhelpincustomersegmentationand
clustering.Theycantellwhichcustomersarethelowestcosttoserveandwhicharelikelytobuythehighest
profitproducts.Thecurrentcropofbigdataandanalyticstoolsprovideawaytointegratedatafromsales,
marketing,actionofcustomers,productreviews,competitorinformation,warrantydataandsupplierstatusin
nearrealtimetomakedemanddrivensupplychainsareality.
Bigdatacanhelpincapturingstructuredandunstructureddatafromsourcesinternal,aswellasexternal,to
theenterprise.Bigdatanowenables"postponement"apracticethatallowsmanufacturestodelaybuilding
finalfinishedproductsuntiltheverylastpossiblemoment,tobetrulysensitivetocustomerdemand.
Thisleadsusintoourfinaltrendofdistributedmanufacturing.Therehavebeenopposingtrendsofstrategic
outsourcingofmanufacturingversusbringingmoreandmoremanufacturingin-house.Thefirstapproach
providesflexibility,freesupcapitalresources,lowerscostandspeedsupproductdevelopment.Theinherent
riskwiththeoutsourcingapproachisthepotentialtoloseintellectualcapital,lackofcontrolontheprocessand
quality,andthepotentialofbranddilution.
Strategically-distributedmanufacturingisthefutureofmanufacturing.Inthenextfewyears,Industry4.0will
bringadvancesinAM,IoTenabledconnectedfactories,manufacturersanddistributors,andendconsumers
willmakedistributedmanufacturingareality.
ThisarticleispublishedaspartoftheIDGContributorNetwork.WanttoJoin?

Raman Mehta
IDGCONTRIBUTORNETWORK

Raman Mehta is SVP & CIO at Fabrinet, the first ever CIO for the company. He is a 2013 CIO 100 Award winner as well as a
Computerworld 2012 Premier 100 IT Leaders honoree.
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