Manufacturing productivity, on the decline for two decades, could be on the upswing and the sector could be on the verge of a significant transformation, according to a new paper published by the Manufacturers Alliance for Productivity and Innovation (MAPI) Foundation. This shift hinges on an alternative digital future for manufacturers – one built around innovations in other sectors such as distribution and communications. Author Michael Mandel, chief economic strategist at the Progressive Policy Institute, terms such a digital transformation in manufacturing "The Internet of Goods."
In the paper titled "The Rise of Internet Goods: A New Perspective on the Digital Future for Manufacturers," Dr. Mandel discusses the convergence of three new trends that will boost manufacturing productivity and create new markets:
- The rise of ecommerce fulfillment centers and the digitization of distribution, revolutionized by Amazon;
- The dramatic expansion of robots and 3D printing for quick and cheap delivery that will allow for more localized production of goods; and
- Cloud-based manufacturing platforms that enable design, production, sales, and distribution to run as separate services on a packet-switched network.
"Manufacturers have struggled to adapt to the technological opportunities in digitalization that can provide growth," says Stephen Gold, President of the MAPI Foundation. "Our 'Internet of Goods' report provides a new perspective. If U.S. manufacturers can look beyond their current digital assumptions and take some lessons from other innovative industries, higher productivity and new business models could transform their companies and our marketplace."
"Manufacturing is intrinsically a physical industry. It's easy to digitize a song or a bank account, but how can you recreate the work of a crane or agricultural harvesting equipment?" adds report author Mandel. "This research and analysis illustrate how manufacturing and related industries can harness new digital technologies to transform their businesses."
The report shares public policy recommendations to support manufacturers, including workforce policy, support for local entrepreneurs, and regulatory improvement.
As a 501(c)(3), the MAPI Foundation is thankful for the support of the companies that underwrote this report: AMETEK Foundation, Belden, BorgWarner, Crane Co., Dana, Hillenbrand, ITT, Kaman, Moog, MSA Safety, Nordson, Parker Hannifin, Regal Beloit, Rockwell Foundation, S&C Electric Company, Sonoco, Stanley Black & Decker, and Victaulic.