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What can we expect in 2020? The top 3 manufacturing trends taking root for the long term

Etienne Lacroix CEO & Founder / Dec 30th, 2019
Vention Industry Insights 2020

Vention’s “day zero” was in July 2016. At that time, our founding team predicted that certain trends were about to change manufacturing for the long term. But it wasn’t until 2019 that these trends became evident. That list, which first existed only on our whiteboard, has been substantiated with tangible examples this year.

These trends aren’t about IIOT or 3D printers (which have been around for a full decade already). They are about deeper shifts that will inevitably change the structure and delivery model of this industry forever. Below are our top three.

1) Small and medium manufacturing businesses are the next frontier of industrial automation

According to the United States Census Bureau, more than 50% of the wages paid in manufacturing are paid by companies with fewer than 50 employees. But despite their hefty weight in the economy, these small businesses have not yet started to really automate their production (unlike car manufacturers, who’ve been operating fully automated assembly lines for the past 35 years). The high-mix, low-volume production of small and medium businesses makes it hard to earn back the cost of automated equipment.

The cost of today’s automation technology (like PLCs, drives, sensors, robot arms, and end-of-arm tooling) and integration (namely design engineering, programming, and commissioning) often exceeds several tens of thousands of dollars, which can be more than these players’ annual profits. The industrial automation industry, by contrast, has been developed around high-throughput production (such as for consumer electronics and automotive manufacturers)—and the resulting price level is simply not compatible with the reality of small manufacturers.

In our opinion, this incompatibility creates one of the biggest opportunities of the next decade: re-imagining industrial automation to serve the majority of manufacturing plants.

2) Manufacturing is being democratized

A new wave of industrial companies have embarked on a mission to make automation easy to use for anyone on the manufacturing floor. The idea of democratizing industrial automation is now widespread, with CEOs of both traditional and emerging companies using these words in their keynotes. Simplicity is becoming the new competitive advantage.

Products must be adapted for a market where there are no specialized automation experts with skills in robot programming and ladder logic. Small and mid-sized manufacturers simply can’t afford to have a dedicated industrial automation team. In these environments, the team that operates the manufacturing floor is the same team that will deploy new technology on the floor. This shift in audience is leading to not only product redesign, but also “end-to-end” customer experience redesign, from product selection to product commissioning.

To achieve greater simplicity, a common strategy is making application-specific products. Companies in many segments of industrial automation are adapting their offerings to support specific activities like palletizing, machine tending, and electronic assembly. This narrow focus on specific applications lets them configure their products for certain missions, greatly easing the subsequent deployment tasks for end-users.

3) Building deep and lasting relationships with end-users

We’ve never seen as many new brands of robot arms, end-of-arm tooling, machine analytics solutions, and additive manufacturing products as we did in 2019. While it is an exciting time to be in this industry, we believe the supply of these technologies is growing faster than distribution channels can keep up with. That’s why one of the most important success factors for newcomers in the industry is working with strong distributors that have solid end-user relationships. With such distributors in short supply, it’s possible that several of those new solution providers will be short-lived.

Industrial automation solution providers who see their primary channel being challenged as a result of aggressive supply have started to develop their own go-to-market capabilities, slowly building stickier relationships with end-users. These companies are now investing in channel sales support, sales engineering, customer success, and online support resources to better serve their customers. The traditional industry structure is about to contract, and the boundaries between each layer will soon become blurry.

Looking back

What were we thinking about manufacturing and industrial automation trends a few years ago? Look back on what we published at the end of 2017 and 2018.

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