Modern manufacturing, an essential part of the global economy, has long since left the days of dark and dirty factories, having evolved into sleek, technology-driven environments. Today, manufacturing is at a critical juncture and is again facing a new paradigm shift, according to a new study that offers a glimpse into the future of factories and manufacturing.

Based on the report’s findings, The Economist highlights some of the key ways that manufacturing is changing:

• Whereas manufacturing has traditionally been considered to be a process that turns raw materials into physical products, the physical part of production is becoming the center of a much wider value chain. “Manufacturing is no longer just about production. Production is now the core of a much wider set of activities,” The Economist explains. “Manufacturers are increasingly generating revenue from other activities, many of which are categorized as services.”
• While the move may be slow so far, manufacturers are starting to recognize that many factors previously used to justify offshoring have changed dramatically over the past few years. With wage costs rising, especially in China, and new technologies changing the economics of production, reshoring – the process wherein companies bring their offshore-outsourced manufacturing capacity back home – can make logistical business sense.
• A technological evolution is taking place in manufacturing facilities. “Computer-aided design and simulation reduces the time and cost of bringing new goods to market. Advanced robotics makes automation cheaper and more flexible,” The Economist says. “And new materials, such as nanoparticles, will give products novel properties.” Coupled with ongoing advances in 3-D printing and digital fabrication, traditional models for manufacturing are rapidly evolving to include small-scale, even DIY production.
• As natural and capital resources are constrained, pressures in the marketplace and within ecosystems occur. “In the future, companies will not be able to afford to throw things away,” Richard Lapthorne, an industrialist who led the report’s expert groups during the two-year project, said. As such, manufacturers are discovering that sustainability offers an opportunity to manage their corporate risks; differentiate their products, brand, and image; and create new value, which fosters revenue-generating growth.

The near future offers a new era of opportunity and challenges for manufacturers, driven by rapid changes in technology, new ways of doing business and
global competition. “These changes mean that manufacturing in 2050 will look very different from today,” the report makes clear.

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Manufacturers of all sizes today face ever-greater volumes of data, all streaming in at high velocity and in a dizzying variety of formats – all of it needing to be being captured and analyzed. Today, manufacturers’ essential “big data” challenge is figuring out how to effectively harness and leverage the massive amounts of data collected from various sources.

Because many business and supply-chain management systems are “siloed” within the manufacturing enterprise, and data are not delivered in real-time to the correct decision makers in an easily digested format, much of the data collected today doesn’t have sufficient value, according to Bob Dean, executive director of business transformation at Cisco.

To collect, analyze and report the data dynamically – and ultimately help drive innovation, quality and cost savings throughout the organization – Dean recently wrote at Manufacturing.net that manufacturers need to “stitch” these various business systems into a cohesive and integrated decision engine by harnessing “Data in Motion” – a way for increasingly more and diverse data types from new devices and sensors to function at maximum value while still in motion.

“Take pressure sensors, which have been widely deployed across plant floors to monitor systems and ensure they are applying pre-defined parameters,” Dean notes. “If controlled by higher-level manufacturing execution systems, this same sensor data could be used in deciding whether to change the pressure envelope based on customer requirements or quality inspections across the entire factory, or even across sites. True business benefits accrue when Data in Motion flows freely across silos.”

As “big data” becomes a bigger challenge and a higher priority for manufacturers, it will also become an opportunity to gather valuable insights, decrease costs, increase profit and drive quality.

American manufacturers are showing signs of regaining their competitive edge. In August, the U.S. manufacturing sector grew at a faster rate over the previous month than at any other time during the last two years. Data from July show that the manufacturing sector expanded in July at the fastest pace in more than two years and remains one sector of the U.S. economy that is still hiring.

“The overall boost in manufacturing over the last two months has some economists hopeful that the country is headed for recovery,” according to The Week in September.

The weekly news magazine offers three key reasons for the sector’s recent improvement:

• Rising global demand – As the global economy heals, demand for American-made products is picking up. In fact, a new report from Boston Consulting Group (BCG) indicates that, as a share of the U.S. economy, exports are at their highest point in 50 years, and U.S. manufacturing may gain up to $115 billion more in export business from rivals by 2020.
• Rising Chinese costs – Wages in China have jumped dramatically, making it “only marginally cheaper for U.S. businesses to manufacture goods in China.” Once you consider the extra costs in terms of labor, energy and shipping, it’s clear that manufacturing in China isn’t as cheap as it used to be.
• Affordable U.S. labor – Many factory jobs today are part-time, non-union jobs that demand specialized technical skills. Both the relatively low cost of labor and lax U.S. labor laws make it more cost-effective for some foreign companies to manufacture products in the U.S.

BCG’s analysis suggests that the U.S. is steadily becoming one of the most appealing countries for manufacturing in the developed world.

“By 2020, higher U.S. exports, combined with production work that will likely be ‘reshored’ from China, could create 2.5 million to 5 million American factory and service jobs associated with increased manufacturing,” the BCG report states.

Within all aspects of pharmaceutical manufacturing operations, maintaining a rigorous level of quality assurance is of critical importance. Urging greater focus on contractor quality, the United States Food and Drug Administration (FDA) issued new guidance in May that provides specific strategies for manufacturers to ensure drug quality from third parties.

The new FDA document maps ways to define and document the responsibilities of all parties involved in commercial production of human and animal drugs, biotechnology products, combination products and active pharmaceutical ingredients (APIs).

“A main theme is that the owner of a new drug application is ultimately responsible for any failings or shortcomings by contractors,” PharmTech reported last month. “While all parties to a contract must prevent adulteration or misbranding, FDA emphasizes that owners cannot escape responsibility by pointing to vendor failings.”

The FDA has issued various guidelines in the past addressing quality management principles related to contract manufacturing operations and recommended the use of Quality Agreements (QAs) to facilitate compliance with current Good Manufacturing Practice (cGMP) requirements, but the new draft guidance is significant for its focus on the importance and the details of written QAs.

In the draft guidance, the FDA recommends that a QA not only stand separate from commercial contracts but also clarify which of the cGMP activities are to be carried out by each party and track the basic subparts of the cGMP regulations or guidelines. At a minimum, the QA should cover the following basic topics: purpose/scope; terms (including effective date and termination clause); dispute resolution; responsibilities (including communication mechanisms and contacts); and change control and revisions (including subcontractors).

Health Care Law Matters has noted that “areas of responsibility include Quality Unit, facilities and equipment, materials management, product-specific requirements and responsibilities, laboratory controls and documentation.”

As manufacturers work to produce safe and reliable prescription drugs, maintaining clear and effective relations with contractors to balance the demands of meeting regulations and production costs is of the utmost importance.

Beyond a sense of restoring national pride, the recent resurgence of American-made goods makes economic sense again for manufacturers in the United States. Today, as economic conditions drive many overseas manufacturing operations back to the U.S., a new film explores the history of American manufacturing and its impact.

The feature-length documentary, titled American Made Movie, reflects on the glory days of U.S. manufacturing and also examines the factors that have contributed to the decline of the American manufacturing workforce, including technology and globalization.

While the documentary explores the decline of America’s manufacturing workforce, it also looks at people and families who have adapted and thrived, as well as successful companies that have prospered, showing the positive impact manufacturing jobs have on national and local economies.

Even more, the directors of American Made Movie, Vincent Vittorio and Nathaniel Thomas McGill, illustrate the integral role consumerism may play in getting the economy back on track, showing the relationship between people and what they buy. The film demonstrates how each American consumer can make a difference in the future of U.S. manufacturing.

In a recent 32-city, 32-day bus tour, Vittorio and McGill aimed not only to promote the film (which hits theaters nationwide Aug. 30), but also to educate and encourage people to purchase American-made products. Ultimately, the film asks who will be responsible for the resurgence of American manufacturing, and answers: Americans.

Approximately 65 percent of American consumers are willing to pay more for 10 key product categories – including electronics, appliances and apparel – as long as these goods were made in the United States, according to a late-2012 study from the Boston Consulting Group (BCG).

The findings are part of a research project known as “Made in America, Again,” which shows that the U.S. is becoming increasingly attractive as a location for making certain products for the domestic market, as well as becoming a base for global exports.

Buyers’ preferences for American-made products may be indicative of a broader trend that is making the U.S. more competitive with China, whose overwhelming manufacturing cost advantage over the  U.S. is shrinking rapidly and, ultimately, changing cost considerations.

Yet labor costs are only part of the picture, according to earlier BCG findings on the changing economics that are starting to favor the manufacturing of certain goods in the U.S.A. growing number of U.S. companies are considering reshoring, or shifting previously offshored operations back to the U.S., to also improve product quality, ease of doing business and proximity to customers. Relatively affordable energy is also making “Made in America” more attractive to businesses.

The results are consistent with evidence that the great migration of manufacturing offshore is beginning to reverse. According to findings published by Accenture last summer, approximately two-thirds of large U.S. manufacturers have moved factories in the past two years, with the most popular destination being the U.S.

This trend is expected to reach a tipping point over the next few years, as the total landed cost gap between the U.S. and China continues to shrink, driven in part by rising wage inflation inChina and continued productivity improvements in the U.S.

DeMarco Industrial Vacuum Corporation is proud to be Made in the USA. This is one of our core beliefs.