2020 was a unique year in many ways for many reasons and for many people. This was true in the manufacturing industries as well as in education, medicine, and entertainment. The trends and the trajectory for manufacturing in the United States have shifted dramatically from what we were expecting a year ago. Many changes were driven by advances in technology but the focus and demands for the technology have been driven by new and unique needs created by the pandemic and government policy, correctly or incorrectly, created as a response to the pandemic. We have seen and will see changes in manufacturing and technology impacted significantly through supply chain, reshoring and plant upgrades caused by shifting resources and strategic necessities progressing as a result of COVID pandemic.
A year ago, all the focus for the future of manufacturing was more rapid deployment of tools connected to the Industry 4.0 suite of technologies. Big data, analytics, additive manufacturing, robotics, and virtual reality were all the rage. These technologies have not gone away, but the need for them has shifted along with manufacturing priorities created by or influenced by the pandemic. The future of the manufacturing industry will be defined by these influences. We can learn a great deal from history about changes that happen after major crises. After each crisis manufacturers had to adapt to the changes caused by governments, society and business as an outcome of the crisis, in the present case of the pandemic. Manufacturers need to revise, reinvent, and transform themselves to meet and succeed in the new normal created by COVID 19. The result will be a great deal of innovation among the most innovative firms. Historically the most innovative and creative firms have been those in the United States. It seems likely that that pattern will repeat. What new implementations of technology can we expect? I have listed a few of the major changes. They include immediate safety and stability from the pandemic and then implementation of some of the new preferences that have been established by the American population during 2020.
1. Safety and PPE. The most immediate and direct change in manufacturing caused by COVID 19 was in safety and safety equipment. All most immediately there was an increased demand for ventilators, face masks, hand sanitizers and other PPE. American firms responded and in a relatively short time this demand was being met by innovative manufacturers who shifted existing production lines and built new ones for these products. This was followed soon thereafter with the need for and the manufacturing of vaccines. With the assistance of government funding from Project Warp Speed several pharmaceutical firms responded. The vaccine needs delivery systems and other manufacturers, again with the help of Warp Speed funding, began to expand and build new vial and syringe manufacturing lines. The demand has stabilized somewhat, but there is still a high percentage of PPE being imported from China. US manufacturers are sensitive to this and eager to expand their capability. As recently as January 2021 a coalition of industry organizations and labor unions sent a lette to President Biden and congressional leaders outlining recommendations on specific policy initiatives that should be adopted to re-establish a permanent PPE industry in the United States.
2. While the demand for the PPE and the COVID vaccine were responded to quickly, that is not the only essential and strategic need that has been identified. The needs of COVID 19 vaccines were only the most urgent needs. There is now a long term need for many other prescription drugs, other vaccines, generic drugs, and other pharmaceutical products. This includes the manufacture of pharmaceutical fine chemicals and the other components that are used in the manufacture of pharmaceutical products. There is broad acknowledgement that it is not only strategic to be self-sufficient in pharmaceutical products but also directly linked to the national security of the United States. Pharmaceutical products require many components made up of other chemicals and pharmaceutical fine chemicals. US manufacturers need to be able to have transparency in their supply chains for good traceability and predictable delivery of components needed in their manufacturing. There is strong bipartisan support for these needs and certain to be federal grants, loans, tax breaks and other support to make this happen. The result will be growth and expansion in the US pharmaceutical and chemical manufacturing industries.
3. Other Essential and Strategic Manufacturing. Even prior to the pandemic there were areas of manufacturing that we identified as strategic and essential. The Trump administration identified steel production as one of these. Another area, currently on the list put forward by the Biden administration is all areas of electronic manufacturing as well as electronic chip manufacturing. If wind and solar energy are to be a dominant, or even a significant, portion of our energy production then we need to increase our capacity to manufacturing these units. Today most solar cell units are made in China. It would be counter to national security interests if we were dependent of China to make our shift toward solar energy. Likely there will be government investment and incentives for US manufacturers to ramp up their production. Of course, reshoring of all kinds of products will help create jobs and could increase innovation. This does not need to be limited to essential items. Over the past two decades manufacturers thought of the world as flat and created their manufacturing systems on a global scale. This will now change. Reshoring and near sourcing will be a part of production for local use. Innovative manufacturers will begin to recreate the way products are manufactured and sent to the consumer. Manufacturers will build a network of small more flexible factories located near existing and prospective customers. This will enable them to meet the changing needs and preferences of consumers more effectively. A recent survey of US consumers found that more than half of them is willing to pay a premium for products manufactured in the United States. Manufacturers are becoming aware of these preferences and will change the manufacturing paradigm to accommodate them. Manufacturers will make a strong effort to bring their operations closer to where their products are sold. A part of the reason this is justified by both the consumer and the manufacturer is an effort to avoid future disruptions like those we saw in the recent COVID pandemic.
4. Supply Chain Visibility. Independent of the basis for the manufacturing, be it PPE, pharmaceutical, strategic, essential, or merely consumer driven preferences, the new paradigm will implement lessons learned during the pandemic. Supply chain, inventory, and logistics will all be factored into the algorithms. Flat earth, global sourcing will be replaced with algorithms using many factors. Even items like local pandemics, local weather and local political changes will be factored into the data to help guarantee that each supply chain is robust. Big data and analytics will help to identify, track, and implement these changes. Much of this will happen without human input. In addition to setting up and optimizing supply chains there will be real time tracking as well as data collection and auditing to help improve future manufacturing, transport, and delivery. Currently much of the cost of a product is delivery, especially in the post COVID era where consumers expect their purchases to be delivered to them, often within 24 hours of purchase.
5. Remote Living, Buying and Working. If there is one primary change that occurred during the pandemic, and was caused by it, that change is easily identified as acting remotely. People moved to isolation. They did not see their families in person. They began to communicate by Zoom, Teams or Google Meet. The worked from home and connected to work by their computers and cell phones. They made purchase online, and not at stores and they waited for their deliveries from UPS or Amazon. Making all of this happen requires massive communications networks and huge data bases. The pandemic has made access to reliable, real-time data a necessity for coordinating everything from casual shopping to emergency medical responses. This will not change. The value of data will continue to increase. If we look just at manufacturing it becomes clear that the challenges are greater than those of networking, communication, or shopping. To have manufacturing employs work remotely great levels of connectivity will be necessary. Industry 4.0 and IIoT can provide this and we will see an acceleration in the used of these technologies. Remote visualization, digital twins, robots, industrial IIoT and the use of AI tools will permit many employees to effectively connect with and carry out their manufacturing jobs remotely. On a larger scale, spanning many factories and entire enterprises, control tower views of all operations will allow management to see, manipulate and control their corporate entities. It is also true that enhance automation will be key to much of future success. While on site robots will replace many low paying jobs in the factory, higher paying, more technically challenging opportunities will become available for those able to get training and take on the new responsibilities. Technology has evolved and will continue to improve to permit remote workforces for office jobs and it will continue to improve to allow a larger and larger percentage of factory workers to do the same. We will see the rapid adoption of remote diagnostic, management, and collaboration tools. But manufacturing will still require some maintenance staff on site to repair machines even if diagnostic can be done remotely. The new paradigm will be specialists connected remotely and monitoring online and virtually available to guide and direct a limited team of onsite personnel. Virtual work will not be just for the office anymore; it will become a new reality that will change the manufacturing and factory workplace as well. We will redefine the term lights-out factory to mean a lights-out factory.
The post COVID period will represent real change for much of society, but most specifically the manufacturing arena. Manufacturing companies will need to reinvent themselves to successfully emerge from the pandemic and into the future. Initially they are scrambling to meet the short-term needs. But they need to make efforts to understand the longer-term implications as well as they revise and revamp their factories, logistics and other systems. They need to look for the long-term implications and changes that will happened to their industry. Recent advances in artificial intelligence, analytics and IIoT have caused large changes in manufacturing in the past two decades. Under the banner of Industry 4.0 most manufacturers have welcomed new efficiency in manufacturing and logistics. The future of manufacturing in the United States has great potential. Realizing the potential requires innovation by manufacturers and they must embrace the tools and technologies available to them.