Is the next big thing in manufacturing, the molecule?

10 minute read 27 May 2019

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With the advent of Industry 4.0, the challenge for companies will be to manage the convergence of these digital systems with physical ones, and for CEOs, it is knowing where and how to invest.

The world of manufacturing is currently undergoing a transformation—commonly referred to as Industry 4.0. In this transformation, the default position for many C-suite executives has been to invest in Industry 4.0 technologies, such as artificial intelligence (AI), the industrial internet of things (IIoT), 3D printing and cloud-based platforms. The expectation that spending on smart manufacturing technologies will rise by nearly US$300 billion (12% CAGR) by 2023 is reflective of this fact. However, the challenge for companies will be to manage the convergence of these digital systems with physical ones, and for CEOs, it is knowing where and how to invest.

Factories get smarter

The idea that a “smart factory” can be achieved simply through the addition of AI and other advanced tools is simplistic. Manufacturing companies are not starting at ground zero. They have spent billions over the past few decades deploying agile methodologies, enterprise resource management (ERP), and other types of IT systems to improve process flows, improve visibility, and make on-demand production feasible and profitable. However, many manufacturers have failed to fully reap the benefit of these investments, and while technology is a tempting avenue in the pursuit of the next performance breakthrough, it may not address the fundamental issues that have prevented optimization so far.

Part of the challenge is that business and operational leaders are siloed from one another. They don’t speak the same language. They operate within different vendor ecosystems. At the strategic level, the C-suite receives advice from consultants and other professional services firms. Operational leaders deal with industrial technology vendors and their recommendations. The performance-related impasses of Industry 3.0 must be remedied to put manufacturing companies in the best position to build the Industry 4.0 road maps and layer on smart technology solutions.

With the right foundational elements in place, Industry 4.0 technology solutions will undoubtedly help factories and supply chains to get smarter by providing greater operational visibility, as well as the power to predict problems and effect control. Fifth-generation (5G) cellular wireless communications leveraging edge technology will unleash IIoT devices and sensors to serve as the medium for capturing critical data flows across manufacturing assets — both new and legacy — on a much greater scale. The data generated by the IIoT ecosystem will be quickly processed by AI, generating insights now operationalized by robotic process automation (RPA). The creation of digital twins — software representations of physical manufacturing plants or other assets — will facilitate the simulation, monitoring, testing and modeling of data in a virtual environment to vastly improve real-world KPIs.

Our view is that industry 4.0 is about making factories truly smarter, not just digitizing them. And people may be the most important factor in this transformation. Industry 4.0 technologies layered on top of already highly productive legacy equipment investments enable the operators and the equipment to perform at ever higher levels — that’s manufacturing excellence.
Andrew Caveney
EY EMEIA Advisory Markets and Solutions Leader

The use of lean and other manufacturing processes are still important building blocks for Industry 4.0. Studies have shown that more synergies are captured at a lower cost when lean manufacturing programs and Industry 4.0 initiatives are implemented holistically, as opposed to independently or sequentially. Strong standard ways of working will still be critical success factors, along with workforce empowerment and upskilling. Successful manufacturing companies could be those that transparently engage with their workforces as part of the Industry 4.0 journey. A recent global survey reports that nearly two-third of employees welcome AI if it eliminates tedious tasks and improves decision-making, but three out of five employers are yet to even discuss the implications of AI with their employees. New skills will inevitably be needed, but Industry 4.0 tools (e.g., the use of augmented reality to help an operator make remote repairs) can also enhance the productivity and contribution of existing employees.

Questions for the C-suite
  1. What specific business problems can your 4.0 technology investments help solve?
  2. How integrated are the strategic and operational sides of your business?
  3. How will you attract new kinds of talent while engaging your present workforce in reskilling and upskilling to meet future needs?

Manufacturing becomes more distributed

Digitally based technologies allow for the traditional, centralized, mass production manufacturing model to be completely re-engineered to allow for a more distributed model. While the traditional manufacturing model focused on mass production in low-cost locations to reduce cost of product and gain labor arbitrage advantages, a distributed model relies on smaller, flexible and scalable production capabilities working across a digitally connected network. This model reduces the length, complexity and cost of supply chains, and allows for quick product customization and greater local market responsiveness.

3D printing will not replace classic mass production where it still makes sense from a volume and cost perspective, but it will be extremely useful in redesigning parts for additional functionality or integrating a former set of parts into one more complex part so that further assembly is not required, as well as furthering made-to-measure applications.
Frank Thewhisen
EY Global Additive Manufacturing Leader

3D printing is at the heart of distributed manufacturing. The range of 3D-printable materials continues to expand beyond plastics to include metals, resins and ceramics. When compared with traditional molding, machining and casting processes, more complex geometries can be achieved.  While additive techniques are widely used for prototyping, a 2019 survey reports that more manufacturers have begun to use 3D printing for full-scale production runs. The ability to print from electronic files has given rise to new manufacturing-as-a-service (MaaS) business models, allowing manufacturers to gain operational flexibility and reduce ownership costs by leveraging on-demand 3D-printing service bureaus.

3D printing will not supplant older tried and true fabrication techniques, but it will become an ever-more important tool sitting alongside traditional subtractive manufacturing capabilities. Greater product customization to reflect evolving consumer demand, lower inventory and logistics costs, production closer to need and shortened delivery times are just a few of the benefits that a more distributed production environment offers.

Questions for the C-suite
  1. How are you leveraging 3D printing in a more distributed model to improve your innovation, product development, customer relationships and speed to market?
  2. How could small entrepreneurial 3D printing companies compete against you using different business models and lighter asset bases?
  3. How are you protecting your digital intellectual property (IP) as 3D-printing capabilities increasingly become more democratized?

Production heading toward cleaner materials and far less waste

Customers, investors, employees and other stakeholders increasingly expect manufacturers to use processes that reduce environmental impacts, conserve energy and natural resources, and prove safe for communities. And manufacturers around the world are investing in more sustainable production practices and products, to replace older techniques that are typically physics-based and reliant on high-temperature processing technologies. These more sustainable investments are estimated to be worth a combined US$ 2 billion in cost savings and revenue generation.

A cleaner materials revolution is part of the equation. Abundant resources, such as carbon, are being engineered at the nanoscale to create new materials, such as graphene, which can be substituted for scarce and costly metals. Super-light aircraft made with graphene could reduce fuel costs.

Borophene, a new material composed of a single layer of boron atoms that form various crystalline structures, has the potential to be used as the anode material for more powerful lithium-ion batteries, as well as work as a sensor to detect different molecules and atoms.

Ultrathin materials, some of which can change or evolve in response to forces, such as heat, light or electricity, could lengthen battery life, make solar cells more efficient and desalinate water. Self-healing materials could prolong the useful life of products, diverting them from the waste stream. With concrete production contributing to 7% of global carbon dioxide emissions, lab scientists are focused on manipulating nanoscale particles or leveraging limestone-producing bacteria in cement to make a more durable and less resource-intense product.

Watch this video to learn more about how nature may revolutionize what we make and how we make it.

Looking even further ahead, there is some promising research that suggest we may one day be able to manipulate atoms and molecules to construct larger, more complex objects to atomic precision. This is the dream of molecular manufacturing. Theoretically, bottom-up production from abundant natural materials could translate into zero waste. At a high level, the concept of molecular manufacturing envisions molecules self-organizing to form larger structures under specific instructions or environmental cues (self-assembly), or by using nanoscale tools that hold, position and generate molecules (positional assembly).

Some researchers are using self-assembly to create novel materials and exploring the use of programmable nanorobots to perform molecular manipulation and synthesis. For example, researchers at France’s Femto-ST Institute recently built a tiny house measuring just 20 microns across (a micron equals one millionth of a meter) on the end of an optical fiber using a nanorobotic manufacturing system. At the University of Manchester, scientists built a nanorobot composed of 150 carbon, hydrogen, oxygen and nitrogen atoms that can be programmed to move and  manipulate single molecules using a tiny robotic arm. Its inventors anticipate that molecular robots will begin to be used to build molecules and materials on assembly lines in molecular factories within 10 to 20 years. This research is exciting, but it is by no means a given that early findings will work at scale.

Questions for the C-suite
  1. How are you infusing sustainable production into your strategies for growth and efficiency?
  2. When and how are you incorporating new materials considerations in the product-development cycle?
  3. How are you leveraging digital twins to monitor and improve your sustainable production processes?

The manufacturing revolution

Digital technology is dominating many companies’ priorities as constant innovation reveals tantalizing new opportunities to enhance performance. However, the manufacturing revolution at our fingertips will only be achieved through the optimization of digital, physical and biological systems working together. With cutting-edge research leading the way, we have clearly just entered a multiyear period of disruption for manufacturing-based industries. But the promise on the other side of disruption is an appealing one. Manufacturers, their customers and the larger environment all stand to benefit enormously from leveraging production processes that are more efficient, more distributed and infinitely cleaner. 

Summary

The intersection of human, digital and physical systems is creating a revolution in what we make and how we make it. By taking a holistic view of how these ecosystems interact, manufacturers will create smarter, more distributed and cleaner manufacturing, which will become the hallmarks of Industry 4.0. Business leaders that embrace this approach early will gain a significant competitive advantage for their company.

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