What's ahead for industrial enterprises?
This past decade, we've faced sweeping changes in industrial innovation; from advanced automation to shifting workforce demographics. Leading-edge industrial enterprises are investing billions of dollars into digital transformation in order to solve some of the major challenges that industrial companies are facing globally. Issues like worker and talent shortage/aging workforce, risk and cost pressure, and digital disruption are all issues that industrial companies are struggling with.
Ambitious organizations are counting on digital transformation and innovative technologies to mitigate, accept, and leverage this new landscape as a strategic differentiator in this increasingly competitive market.
Artificial Intelligence (AI) & 5G Move from Emerging to Prominent Technologies for Industrial Enterprises
Artificial intelligence (AI) has revolutionized the workplace over the past decade. AI is capable of transforming the industrial world, which is why we're seeing businesses investing increasing amounts into AI each year. Research shows a 95% growth projection in the adoption of AI over the next two years, with 42% of industrial enterprises already using the technology to personalize customer experiences, reduce human bias, and automate tasks.
Similarly, 5G will also take center stage as a prominent technology in 2020. Forbes notes that the proliferation of 5G will accelerate advancements in smart manufacturing, among other IoT-intensive technologies, proving “the true value of 5G won’t be limited to phones.” 5G brings significant improvement to the industrial setting: fully wireless factories. In the future, smart factories armed with 5G capabilities will deliver: speeds that are up to 100 times faster than 4G, latency of less than one-tenth of a millisecond, and easily re-purposed IoT sensors that can collect data from one part of the factory one day and a completely different part the next.
Digitally-Enhanced Workers Drive Productivity and Innovation
A threat that remains among industrial enterprises globally is the manufacturing skills gap. A report by The Manufacturing Institute and Deloitte last year found that 4.6 million jobs will need to be filled in the sector over the next decade. Also, 2.4 million jobs may be left open because of the lack of trained workers.
Organizations are turning to digital technology to optimize their workforce for the present and future. IDC predicts, by 2021, new future of work practices will expand the functionality and effectiveness of the digital workforce by 35%. This will fuel an acceleration of productivity and innovation at practicing organizations. A survey from PwC finds 89% of respondents say digitalization will drive the hiring of new employees with necessary qualifications. A further 47% of survey participants suggest that they intend to replace workforce attrition due to age by using digital technologies, and half of respondents believe digital technologies will help older employees work longer.
The Impact of Industrial IoT Becomes Pervasive Across the Supply Chain
The Internet of Things (IoT) is the network of physical objects that contain embedded technology to interact with their internal states or the external environment. For industrial enterprises, it’s a valuable asset for one simple reason: it provides the data that makes up the building blocks of the smart factory.
IDC notes that, by 2025, 60% of manufacturers will use IoT platforms with digital innovation platforms to operate networks of asset, product, and process digital twins for a 25% reduction in cost of quality.
“IoT is a technology that supply chain leaders simply cannot ignore,” says Christian Titze, research vice president at Gartner. “We are seeing more supply chain practitioners exploring the potential ofIoT. Areas that IoT might have a profound impact on are enhanced logistics management, improved customer service, and improved supply availability.”
Augmented Reality Wearables See Explosive Growth
While augmented reality (AR) has been around for years, Forbes points out that the technology has primarily been adopted by the entertainment space. Forbes predicts that AR will face tremendous growth in 2020. Businesses are now realizing the wealth of possibilities offered by AR, virtual reality, and mixed reality, including benefits in training, simulation, and new ways to interact with their customers. MarketWatch projects AR wearables, such as the HoloLens, will take the industrial sector by storm. Predicted growth is expected to be 73% over the next few years as enterprises leverage the technology to improve workplace productivity, efficiency, and safety.
Manufacturers Turn to Digitally-Native Companies to Drive Digital Transformation
With technologies like Artificial Intelligence (AI), 5G, Internet of Things (IoT), and Augmented Reality (AR) becoming increasingly prevalent across the industrial sector, manufacturers are turning to partnerships in order to drive digital momentum. A Deloitte study shows manufacturers are actively mobilizing partnerships within their ecosystem that can drive targeted business goals, ranging from bolstering a traditional area (e.g., improving customer experience) to adding new capabilities (e.g., creating new business models).
Deloitte’s 2020 Manufacturing Industry Outlook shows leading manufacturers are leveraging digital partnerships at a much higher rate than their peers. Whether to pursue new business models, create new value for customers, or drive higher productivity and output, successful industrial enterprises are embracing digital transformation – and fast.
With 2020 upon us, now is the time for industrial companies to invest in the digital world. Forward-thinking organizations are leveraging emerging technologies to their strategic advantage, transforming their processes, products, and people. The trends forecast for the coming year includes a mix of innovative technologies and a new way of thinking about driving change within the industrial sector. Will your organization keep pace with the 2020 trends predictions?