Manufacturing is changing at an unprecedented pace, and the industry is feeling the pressure to keep up. Exacerbated by recent global disruption, surging consumer demand, labor shortages, and continued supply chain issues, manufacturers are facing more challenges than ever. In response, many are turning to technology to set their facilities up for future success.

Advanced technologies can help solve the industry’s challenges by increasing production and optimizing operations while creating the flexibility and agility needed to compete long-term. An investment in greater connectivity and automation enhancements now is an opportunity for greater resiliency down the road, and for many, technology is the most likely path forward to remain competitive and set their business up for future growth.

Optimize and grow operations with tech investment

The overarching goal of technology investments is often to increase output and therefore increase company revenue. Many possibilities are available today to reach these goals, with technologies like artificial intelligence (AI), the Internet of Things (IoT), and robotics gaining momentum. Whatever technology you choose, manufacturers should consider a few of the most compelling benefits, such as a decreased cost of labor, increased uptime, and a reduction of errors.

Decreased cost of labor

Labor is certainly not a new challenge for the manufacturing industry, but the lasting effects of the pandemic made the shortage of skilled labor more apparent. A report from CB Insights found that 80% of U.S. manufacturers found it difficult to hire during the pandemic,¹ and Deloitte estimates a shortfall of 2.1 million skilled jobs by 2030.²

To combat this talent shortage, many manufacturers are offering higher wages and incentives, but this still is not enough. In countries like Japan and South Korea, where labor costs and constraints have plagued the industry for years, the adoption of automation and robotics is heavily prevalent. Investments in the U.S. are also growing with a recent report estimating that robotics could reduce labor costs by 16% globally by 2025.¹

Increased uptime

Downtime in the manufacturing industry is a common challenge that can be extremely costly. Lost revenue, financial penalties, idle staff time, and restarting lines all go into determining the cost of unplanned downtime.

Technologies like AI and IoT offer solutions, such as predictive maintenance, that can prevent these breakdowns and keep operations running smoothly. In addition to its ability to predict problems before they arise, predictive maintenance helps to schedule time off from production to perform maintenance, resulting in improved efficiency and lower maintenance costs.

Better quality control

In manufacturing, mistakes are often the result of human error or machine malfunctions. Today, many technologies can aid in quality control procedures and even spot areas for improvement. The IoT, for example, allows machines to talk to each other and react to problems as they happen. Enhancements in precision manufacturing also have resulted in lower error rates and fewer preventable mistakes.

Top trending technologies in manufacturing

Manufacturers looking to capture growth and ensure long-term profitability must invest in technology. Here is a look at some of the top technology trends in the manufacturing industry:

Robotics

Advances in automation and robotics are growing as a solution for repetitive assembly and material handling tasks, such as packing, sorting, and lifting, and this growth is not expected to slow.

A recent report found that half of the manufacturing executives they surveyed expect to increase operational efficiency in 2022 through their investments in robots and cobots.² Investment in AI technologies is also expected to see a compound annual growth rate (CAGR) above 20% through 2025.

Artificial intelligence

AI offers plant managers the ability to easily analyze data and provide actionable insights over the entire manufacturing process. With the help of AI, manufacturers are using data to make better business decisions and create more agile operations.

AI, in combination with the use of IoT technology, is able to learn, improve, and put better processes into action. For example, AI can look at a machine and determine how well it is operating, when it may malfunction, and when it is due for maintenance.

Internet of Things

45% of surveyed manufacturing executives expect further increases in operational efficiency from investments in industrial IoT that connect machines and automate processes.²

By combining various technologies, such as machine learning, big data, sensor data, cloud integration, and machine automation, the IoT helps to minimize downtime and boost efficiency with solutions like predictive and proactive maintenance, real-time monitoring, resource optimization, and supply chain visibility, among others.

IoT technologies can further optimize performance by using sensors to track assets and connect machinery to the cloud to enable real-time insights on maintenance. In addition, IoT-enabled equipment can communicate data that helps track assets, take stock of inventory, and forecast vendor relationships.

Computer vision

Checking that every product in mass production meets specifications is a monotonous job riddled with human error. Computer vision offers a solution with real-time analysis of the factory and improvements to the quality control process. By using cameras enabled by machine learning, for example, computer vision is able to categorize boxes in the warehouse and scan for defects, which in turn improves efficiency, while eliminating errors.

3D printing

3D printing, also known as additive manufacturing, has many applications and has become one of the more affordable technological advancements available today. It is often used during the production cycle to manufacture high-quality components at a low cost. 3D printing also offers an opportunity for custom goods as the demand for customization grows. Another important use case for 3D printing is the ability to make shapes that otherwise would be impossible.  

Wearables

Wearable technology has taken on an increasingly bigger role in boosting efficiency, productivity, and safety in an industrial environment. Employees can access information through wearable devices, such as smartwatches, which collect and display data. Voice-enabled devices allow their hands to remain free so they can focus on the task at hand. Plus, by digitizing manual processes, wearable technology is helping reduce the need for manual data entry, innately removing the risk of human error.

Finding the right partner for investment  

Despite the significant hurdles manufacturing is working to overcome, growth in the sector continues to climb, and a combination of high business valuations, strong earnings, and low-cost debt may encourage companies to add technology capabilities.²

However, regardless of the industry’s positive economic outlook, manufacturing remains an area of relatively low digitization, with most countries around the world averaging fewer than 200 robots per 10,000 employees.¹ This leaves the industry poised for explosive growth and interest in investment.

As the market continues to mature and more options become available, the costs of tech investment will continue to drop, but it is still a significant investment. Finding lending partners and funding is the logical first step to take on new technology and grow your business into the future.  

Whether you’re a business looking to get your start or an established leader looking to grow, having the support of experienced lenders who understand business is essential. Wintrust can help you with all your financing needs through solutions from traditional leases, equipment loans, and customized cash flow solutions, to lines of credit, installment purchase agreements, and vendor programs.

Partner with our experienced team and we can help you find the right commercial lending solution for your business.