Smart manufacturing: the new industrial revolution?

Head of Strategy, Innovation & Communication

January 17, 2017 – Although in recent decades the economies of the major Western countries are more and more oriented to the service sector and the provision of services, the industry is of strategic importance, both for the added value generated and for the innovative potentials.

The competitive pressure from the globalization causes difficulties for Western manufacturers, especially where these are not able to make significant product and process innovations and become involved in a pure battle over costs.

The manufacturing digitization process is an unavoidable step in the path towards a significant increase in productivity that can turn hopes of a “new industrial revolution” into reality.

Tracing the evolutionary history of the industrial sector in the last century in the main western nations, three symbolic milestones can be highlighted:

beginning of ‘900: era of mass production, characterized by an excess of demand over supply. In this context, the main concern of the industrial system is to maximize production to meet an almost inexhaustible demand. There are no special requests for customization of the product; Henry Ford quote “you can have any color you want, as long as it’s black” neatly sums up the mentality of the time. The extreme pursuit of efficiency leads to the use of the assembly line as a tool for mass production. There are huge fully integrated production plants, capable of transforming raw materials into finished products, keeping in them all the necessary work phases

half of ‘900: era of differentiation, in which the demand is not more exuberant than the supply. Consumers are becoming more demanding; increased competition imposes a search for variety, leading to significantly expand the range of products to satisfy the needs of different market niches; enhancing the range corresponds to a more rapid obsolescence, so the life cycle of products is shortened. The search for variety and novelty reducing efficiency forces companies to vertical specialization: every company tends to focus on a particular point in the processing of products; consequently, the Supply Chain becomes increasingly long and articulated. The so-called “industrial districts” appear

present days: era of mass customization, where the demand is significantly lower than the supply and above all the profiles of the demand over time are hardly predictable. The need to satisfy the consumer in order to improve the competitiveness goes so far as to customize the product according to the requirements expressed by the market, transforming the product into something more and more like a service. The request to adapt in real time to the demand profile maximizing the agility requires companies to return, in fact, to integrate the supply chain; only the new ICT technologies may support the re-integration of Virtual Supply Chain physically fragmented.

Therefore, today the industry is adopting innovative digital technologies – Smart Manufacturing – increasing interconnection and cooperation of resources (physical assets, information and people) in order to increase flexibility, speed, productivity, quality and competitiveness of business processes.

 

Luca Ferraris
Luca Ferraris
Head of Innovation, Marketing & Technology Luca Ferraris has more than 15 years experience in the high technology products and services market, holding roles of growing complexity in Pre-sales, Marketing and Strategy areas. He is graduated in Telecommunications Engineering and holds an Executive Master in Business Administration. By his educational and professional path, he is empowered to follow all the steps needed to set-up and track a strategic investment: his strong technological competence is enriched with the ability to analyze the market data, to perform an economical and financial appraisal of new projects value, to design and foster innovative offerings.
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