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2015 Manufacturing Industry Predictions

What’s new and trending for the industry? Well, predictions for the upcoming year as a motif is certainly not new but is definitely trending, considering the deluge of pundits concentrating their well-informed thoughts about which industry happenings will emerge through hyperbole and into reality. Amongst go-to industry resources I find myself perusing is LNS Research, who has chosen to break down their Top Three 2015 predictions by industry trend/topic: Industrial IoT; Industrial Energy Management; Environmental Health and Safety; and Asset Performance Management.

Another annual favorite that I’ve blogged about in the past—including commentary on Cisco relevance—is IDC Manufacturing Insights, who this year took on a refreshing, new format entitled IDC Futurescape: Worldwide Manufacturing 2015 Predictions. The team of IDC manufacturing practice analysts quantify and qualify their ten most critical imperatives to be addressed by global manufacturers in 2015 and beyond—based on the coalescence of technology and line of business interests—including a few that are very pertinent to Cisco’s Internet of Everything (IoE) initiatives:

  • In 2015, customer centricity requires higher standards for customer service excellence, efficient innovation, and responsive manufacturing, which motivates 75% of manufacturers to invest in customer-facing technologies.
  • By 2016, 70% of global discrete manufacturers will offer connected products, driving increased software content and the need for systems engineering and a product innovation platform.
  • By 2018, 40% of Top 100 discrete manufacturers and 20% of Top 100 process manufacturers will provide Product-as-a-Service platforms.
  • In 2015, 65% of companies with more than 10 plants will enable the factory floor to make better decisions through investments in operational intelligence.

Before the analyst predictions pushed their way onto my laptop screen, I was asked by Cisco’s press relations team to put forward my top 3 for the industry. So on All Saints Day, before heading out on weeks of travel to China, India, and several of the United States outside my home residence, I produced three ideas that didn’t make it to our PR megaphone. As part of this blog, I’ve decided to share these three predictions, with some relevant observations from my Nov-Dec travels and customer interactions …

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From Local to Global: Extending Our IoE Innovation Strategy with openBerlin and TTTech

mfg Blog 110714There are people all over the world doing truly innovative acts to move the technology needle, but without proper support, many of these ideas fail to come to true fruition. We at Cisco are committed to doing our part by guiding these creators towards a path of success. With both internal and external programs to feed innovation – including the Cisco Internet of Things (IoT) Innovation Grand Challenge and the Technology Fund – we aim to nurture disruptive ideas.

In this light, we were pleased to announce in September the establishment of an IoE Innovation Center in Berlin, Germany – openBerlin. Scheduled to open the summer of 2015, openBerlin will focus on the rapid prototyping of solutions in the transportation and manufacturing verticals. openBerlin marks the sixth Innovation Center in Cisco’s portfolio and joins its successors in Rio, Brazil; Toronto, Canada; Songdo, South Korea; Barcelona, Spain; and London, UK. Read More »

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Making Smarter Manufacturing and IoT a Reality Today

Recently, Lopez Research published a white paper entitled Building Smarter Manufacturing with the Internet of Things (IoT). It is a worthwhile read especially for industrial and manufacturing companies as they wrestle with the implications of IoT for the factory floor and beyond. 

The paper describes what IoT means for manufacturers today, including some of the compelling business benefits and value from improved connections between people, processes and data. A recent video infographic, ‘Manufacturing Tomorrow’s Possibilities’ produced by Cisco Consulting Services cites some statistics, including how intelligent connections across the value chain resulted in ‘reduction of time to market drives 1.2% bottom line improvement’:

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Research and Development – Who are the Global Leaders?

Following on from my recent blog about “Is Manufacturing Coming Back to the US?” one of Morgan Stanley’s Investment guys, Ruchir Sharma, (Managing Director and the head of the Emerging Markets Equity team) has a book out called ‘Breakout Nations’ and in it he says:

“Every Investment idea is right for a while”

He was talking to Fareed Zakaria on his GPS program. Fareed cited that in the 1980’s investing in Japan made you a big winner until the 90’s came around. In the 1990’s it was all about Tech stocks. Then the Tech bubble burst. The Fad for the 2000’s was emerging markets.

And he asked are emerging markets submerging? I was interested mainly because the discussion lead to which countries invest most in R&D, and that is a leading indicator of success for economies worldwide. In fact, the numbers don’t lie. It looks like we may be entering a new phase with different leaders of growth, and it may be the US that becomes the new focus of manufacturing and innovation.

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Is Manufacturing Coming Back to the US?

Manufacturing Exports up over past 18 months for USA.

Douglas Burtnick of Aberdeen Asset Management was heard on NBR recently talking about how the US export story is really interesting, and often overlooked by those not focused on the manufacturing industry. He said…

 “Companies are seeing external demand for anything from machinery, to electronics, to chemicals, and they’re starting to think about where they really want to manufacture those products. That’s a big deal, because this is the first time in several decades that we’ve actually thought about manufacturing coming back to the US.”

Clearly that affects Aberdeen’s investment philosophy, but he also points out how the phenomenon will affect different regions in the US, and the types of products that will be built here.

This is a significant change from companies going overseas to look for lower costs. So what’s caused the change? Most agree that there are three major reasons.

  • US Manufacturing  is humming

    . US Manufacturing is humming

    The first is to do with the issues of distance, communications and language. Transportation costs are significant. Whilst communication and collaboration techniques from companies like Cisco enable real time connected manufacturing, meaning that manufacturing is becoming more connected, this makes the US itself more connected. Overseas transportation costs of materials and goods themselves  can still be significant, and a clear target for reduction.

  • The third area has been well articulated by commentators. Read More »

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