Rockwell Automation has published the 8th Annual State of Manufacturing Report; Plex published previous editions. Rockwell Automation has decided that this research should continue and would take the credit following its acquisition of Plex in 2021.
This year’s report looks at the state of manufacturing, covering challenges across supply chains, talent, quality, cybersecurity and analytics. It examines how manufacturers leverage technology to improve profitability, sustainability and organisational resilience. The study is based on a survey of 1,353 manufacturing leaders across 13 countries.
The report is 38 pages with an executive summary followed by five sections:
- The current state of Smart Manufacturing
- Manufacturers’ biggest challenges
- The future of Smart Manufacturing
- Taking action
- Demographics and firmographics
Each section provides a mix of visualisations of data points from the service, some analysis of the results and quotes from other whitepapers to illustrate points. The report lacks a qualitative element that might have shed further light on the subjects covered. However, it is well presented and provides a wealth of interesting data points.
Veena Lakkundi, Senior Vice President, Strategy and Corporate Development at Rockwell Automation, commented, “Manufacturers are continuing to seek opportunities for profitable growth but are realizing that uncertainty in workforce availability is impacting quality, along with their ability to meet evolving customer needs.
“The survey found that smart manufacturing technology enables manufacturers of all sizes to optimize more resilient, agile, and sustainable solutions that accelerate transformation. If we’ve learned anything from history, it’s that organizations that invest in innovation, with a bias for action, during times of uncertainty can outpace competitors.”
The current state of Smart Manufacturing
The section starts with a look at the internal and external obstacles facing manufacturers. The top two are inflation and supply chain distribution, while cybersecurity risks are in the top five, and it languishes in fifth place. With reports from Dragos and others, indicating a rise in security threats to Manufacturers, this is surprising.
Internal obstacles are more familiar with balancing quality and growth top, with deploying and integrating new technology second. However, there was no deeper analysis of these to ask why they are obstacles. They could be attributed to the lack of skilled workers available.
While Supply chains are a problem,79% of manufacturers lack end-to-end supply chain planning tools, with many still using spreadsheets or homegrown tools.
ESG Sustainability is growing in importance, though the report does not show any trending information from previous years to evidence this. However, 95% of respondents reported the existence of ESG policies or programs, whether formal or informal. The larger the firm, the more likely its existence. This is not surprising given the increase in regulations for ESG.
84% of respondents are also investing or have invested in smart manufacturing. These are proving to have a quick time to pay back and good ROI. Adoption is higher at 58% for those firms with higher revenues and only 40% for those with lower revenues. The report highlights 10 areas where organisations can invest. The next section looks at how many of these technologies are already in place.
Manufacturers’ biggest challenges
46% of manufacturers say they lack the skilled workforce and 43% the technology to outpace the competition over the next 12 months. This is up from 35% and 26% in 2021. It indicates that technology is moving quickly, and manufacturers are falling behind on these investments. Technology paralysis is also increasing, 30% in 2023, up from 24% in 2022, with organisations unable to decide which technology to invest in.
Talent challenges dominate leaders’ thoughts, with 38-41% of respondents all citing talent challenges across acquiring talent, talent cost, training, retention, change management, and engagement.
There has been a shift in sustainability thinking. This year 42% see a benefit of increased efficiency, and 41% see sustainability as a competitive differentiator. The report indicates this is a change from previous years but does not evidence this.
While the report looks at the impact of smart manufacturing on challenges, listing cybersecurity top. It does not delve into what manufacturers are doing around cybersecurity, despite quoting that manufacturing had the highest average ransom payments in 2022 at $2M.
The future of Smart Manufacturing
The authors argue that Smart Manufacturing is the way forward — 84% plan to adopt it within the next two years. Perhaps the 16% that aren’t, should accelerate plans to remain competitive. The data shows where other organisations have already invested, which process automation (63%) and Cloud/SaaS investment (63%) are top. These two also offer the highest ROI (33%, 30%), which perhaps indicates for those with technology paralysis a reason to invest.
The section examines how quality drives digital transformation and why it matters most in sustainability initiatives. There are also insights into which areas of investment manufacturers see themselves, driving improvement with better use of data analytics and more automation leading the way. The section closes with a look at the once-hyped technologies that are becoming important now.
Taking action
This section is the main takeout from the report and provides two sets of actions for the reader. The first is a set of guiding steps that include several questions for manufacturing leaders to ask themselves. These five steps are:
- Identify key stakeholders and agree on your greatest need
- Build the business case for investment
- Research and select the solutions
- Design and deploy the solution
- Manage change and drive adoption
The second set of actions is a ten-step plan for technology adoption which builds on the first five steps.
Demographics and firmographics
This gives a breakdown of the demographics but misses the opportunity to show whether there were regional or industry differences in the respondent’s answers. What is worth noting is the balance between the regions with the Americas (28%), Europe (41%) and APAC (31%). All respondents were at least management level. However, 39% of respondents were from IT, with the next highest function representing manufacturing (18%).
Enterprise Times: What does this mean?
Technology is important for driving growth, quality, and sustainability agendas. However, manufacturers are spoilt for choice and unsure of what technology to deploy next. This report is useful because it can help with decision-making based on what others are deploying and seeing value from.
Lakkundi added, “At Rockwell, we combine the power of our portfolio of industry solutions with our second-to-none partner ecosystem to serve as a trusted advisor to leading companies around the world. As the biggest company focused solely on industrial automation and digital transformation, we work to make the complex simple and meet companies where they are in their journeys.” (repetition of previous section)
The questions are well-worded, and the responses provide some solid insights into the use of technology and the challenges manufacturers face. However, a qualitative element may have surfaced better insights, and the lack of focus on cybersecurity is a concern, as it is an area that manufacturers should consider for their investment.
The most disappointing aspect of the research is the lack of insight into views from different countries and industries. For example, how do electronics vendors differ from automotive and industrial manufacturing? Is home and personal care seeing the emergence of wearable technology? From a country standpoint, which nations are investing, and where are they investing? There is a talent shortage across the US and UK, but are the Chinese also investing heavily in smart manufacturing and having an advantage in talent accessibility?
