Industry executives and experts share their predictions for 2024. Read them in this 16th annual VMblog.com series exclusive.
What the Future Holds for Manufacturing in 2024
By Henrik Hulgaard, co-founder and vice president of product management,
Configit
For manufacturers of configurable products, the future looks more
complex - not less. Market forces are requiring greater visibility and
traceability, for instance. These forces include both new regulations and
shifting customer expectations and demands. By looking at recent developments
in the industrial sector, companies can put processes and technologies in place
that will help them plan for the short and long terms.
Here, then, are three predictions that manufacturers should pay
attention to in 2024.
The need for comprehensive visibility will increase
The converging of market trends, including expanding adoption of AI, will
result in a greater awareness of the need for an end-to-end solution that
provides operational visibility.
To gather data from the many disparate sources and link it all
together, organizations will need a comprehensive tool that will help the
various departments get access to all of the available information. This will
help them better understand the configuration of their products. In other
words, it means establishing a shared source of truth regarding product
configuration information. The only way to know what to manufacture or deliver
or service is to capture the product configuration that the customer initially
purchased. These days, it's more fitting to say that customers are buying
configurations rather than products.
Going forward, this is what manufacturers will need to manage. They'll
have to have that single shared source of information of what they can sell and
of what configurations are possible. This will be key - because it's that
visibility that will help with feeding AI tools with the right data.
This "single source" will be paramount, since it will provide the
visibility that will assist in giving AI tools the appropriate data so that
companies can meet sustainability requirements or enable traceability.
The critical nature of and need for traceability will increase in 2024
New digital product passport regulations in the European Union will
likely begin rolling out in 2026. These will require companies to be able to
show what is essentially a digital record of a
product's sustainability and circularity information throughout its lifecycle,
from design to end-of-life. Regulations like this, coupled with the increased
adoption of technologies like digital thread, will really drive the need for
traceability in terms of being able to see how a product is designed, manufactured,
sold and serviced. To meet this need, manufacturers will have to take a closer
look at how to create comprehensive visibility across functions.
Manufacturers will need to carefully consider their production
processes as sustainability regulations increase
Though sustainability has been on the business world's radar for a
while now, next year it will play a more central role - particularly in the EU.
That's because more regulations are being introduced regarding carbon footprint
and emissions standards. Once the EU‘s digital product passport takes effect,
companies will be required to document information like production, recycling,
data on raw material extraction and more. And they'll need to share this
documentation with consumers.
These regulations will have greater enforceability than ever, which
will strongly encourage manufacturers to set and actually meet compliance
goals. They will also need to reveal this information in their official
reports. As the concept pf environmental, social and governance (ESG) gains traction
around the world, an increasing number of companies will need to be able to
show progress in meeting these standards within their financial statements.
As manufacturers will need the ability to have this type of
information available for customers - and stay current with consumer demands
and preferences regarding sustainability - they will need to scrutinize their
internal processes with respect to transparency and their ESG goals.
Prepare now
Though it can sometimes be tricky to make predictions, the forces
shaping the world of manufacturing for the solid foundation from which to
predict what lies ahead in 2024. Will your organization be ready?
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ABOUT THE AUTHOR
Henrik Hulgaard is the vice president of product
management and co-founder of Configit, the global leader in Configuration
Lifecycle Management (CLM) solutions and a supplier of business-critical
software for the configuration of complex products. He holds a doctorate in
computer science from the University of Washington and is an associate
professor of computer science. He has published more than 25 articles internationally.