The manufacturing sector has undergone a profound transformation, driven by new advancements in technology that have reshaped its future. This shift has gone beyond merely replacing outdated processes; it has resulted in remarkable improvements in efficiency, productivity, and flexibility along with new ways to scale operations, creating new possibilities for growth and success.

In this dynamic landscape, the forward-thinking businesses that have harnessed the potential of digital transformation will be the ones best equipped to get ahead of the curve and gain a competitive edge.

“Everybody’s had to pivot and become much more aware of the use of technology as they manage and run their businesses,” said Kirk Phillips, president and CEO of Wintrust Commercial Finance. “Manufacturers are looking for any way they can to leverage technology to improve their business.”

Here’s how these trends are taking shape and the proactive measures businesses can take to adapt and integrate this technology effectively.

Introduction of increased automation 

At the heart of the manufacturing sector, there has been a notable shift toward the adoption of smart machines. Highly efficient in terms of output on both the labor and supply chain management fronts, automation is helping companies find new ways to scale operations by increasing production speed and enhancing overall work quality.

“Automation has actually allowed a lot of companies to upgrade their talent pool because now they’re not just restricted to employees that live within a 50-mile radius,” said Phillips. 

Moreover, smart machines are quickly learning to perform tasks that were once exclusively handled by human workers. This advancement has significantly reduced the time spent searching for qualified individuals willing to take on more physically demanding jobs and helped businesses break free of past limitations that slow down productivity.

“Where there used to be people driving forklifts, there are now autonomous vehicles that warehouses use to operate in the dark,” said David Normandin, president and CEO of Wintrust Specialty Finance. “People have been removed from key functional roles that are now system-driven and controlled.”

The benefits of better data collection and analysis

Embracing IoT (Internet of Things) technology to track system performance and collect data is propelling businesses into a new era of efficiency and productivity with a focus on data-driven excellence.

One of the most notable improvements includes the advancement of assets that were once considered ordinary. The integration of IoT technology has enabled machines to become “smart” by monitoring data points such as energy usage and raw materials consumption to ultimately improve output. As awareness of the potential of data collection and analysis grows, manufacturing businesses are now streamlining supply chain processes and eliminating the need for manual inventory tracking with smart assets.

One such example of IoT technology in action comes via a pallet manufacturer that outfitted RFID tags to its product, transforming what was once viewed as a simple, “dumb” asset, according to Phillips. Where previously pallets were an essential but largely insignificant piece of the puzzle, introducing RFID tags has allowed customers to precisely track the products on each pallet, turning an ordinary asset into an incredibly valuable tool in collecting data and streamlining processes. This use case highlights the value that data-driven initiatives can unlock in the manufacturing industry, propelling companies toward growth and success. 

“Not only does it highlight an innovative approach, but it also shows businesses how they can turn something ordinary into something useful by adopting more data-driven approaches in their own facets of work,” said Phillips.

The evolution of service manufacturing and equipment-as-a-service models

As the manufacturing industry evolves, so does the landscape surrounding purchasing and renting equipment. Digital transformation is resulting in a shift toward service-oriented manufacturing models, which presents exciting possibilities for manufacturers and their customers alike.

“Some customers are looking at buying equipment and paying for it as a service rather than buying the whole machine, opting to pay a variable rate for how many widgets end up being produced,” said Jeff Wolinski, president and CEO of Wintrust Equipment Finance. “At the same time, manufacturers are being proactive and reaching out to customers with service manufacturing offerings rather than trying to sell entire machines that their customers will most likely not need after a couple of years.” 

The increased adoption of service manufacturing and equipment-as-a-service models is fostering a dynamic and flexible ecosystem that allows manufacturers to take a more modern, cost-efficient approach to selling their services, and for customers to pay for only what they need. The transition holds great promise, as it aligns with the evolving demands of the industry and presents innovative ways for businesses and customers to interact.

As more manufacturers adopt these progressive approaches, the manufacturing sector is poised for even greater advancements, laying the foundation for a mutually beneficial future for all involved. 

Take your business into the next era of manufacturing technology with custom financing from our experienced commercial lending teams.

Wintrust Commercial Finance and Wintrust Equipment Finance are divisions of Wintrust Asset Finance Inc. Banking products provided by Wintrust Financial Corp. banks.

Wintrust Specialty Finance is a division of Beverly Bank & Trust Company, N.A., a Wintrust Community Bank.