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Vamshi Rachakonda
19 Oct 2022

Technology delivers many advantages but success requires a plan to address well-entrenched processes and resistance to change

Several major manufacturers announced plans over the summer to build new factories in the United States and to repatriate production from overseas – initiatives that, together, represent hundreds of billions of dollars in new investment and tens of thousands of new domestic jobs. The companies represent a broad range of industrial sectors, including automotive, energy, networking/computing technology, microchip production, and medical technology.

Several factors have contributed to this major shift in manufacturing strategy, including the lessons learned from the COVID-19 pandemic, the uncertainty caused by the Ukraine-Russia conflict and instability in China, ongoing challenges to managing global supply lines, and the passage of several key pieces of US federal legislation that create incentives for building domestic production capacity.

Technology is the key enabler

But while those are the drivers, one of the key enablers of this change is that these companies are embracing Intelligent Manufacturing Operations. The advantages, financial and otherwise, of Intelligent Manufacturing Operations over traditional methods make it possible for companies to bring production back to the United States instead of continuing to employ low-cost labor in overseas facilities.

This technology-driven approach addresses several important issues for manufacturers. These include:

  • Identifying opportunities for automation and robotics to control costs, increase efficiency, and enhance quality
  • Leveraging data analytics to assess product quality, identify flaws, and make quick changes to production methods
  • Reducing waste by improving how raw materials are used and by increasing the number of products that pass quality inspections
  • Improving health and safety on the factory floor
  • Boosting efficiency and resilience by replacing single-purpose machines with smarter, more flexible equipment able to rapidly switch between a range of products and processes
  • Enabling manufacturers to quickly pivot in response to changing market conditions or to take advantage of new opportunities.

These potential benefits mean it’s not surprising that, in my discussions with leaders of American manufacturing companies, six in 10 report they have at least one initiative underway to build new domestic capacity and/or return some of their production to the US. While companies that manufacture technology-intensive products such as automobiles and computing equipment are more likely to embrace Intelligent Manufacturing Operations, enterprises in every sector can and do benefit from this transformation.

People and processes

The biggest challenge for manufacturers is often overcoming the inertia that sets in after doing the same work for decades. Managing this change becomes challenging, and requires buy-in from the boardroom to the shop floor, and companies must have a plan to handle this correctly.

Similarly, manufacturers often also employ processes that they have been using for decades – because they’ve worked. That’s especially true of large, well-established plants, which represent the vast majority of domestic manufacturing today. Companies must examine their methods to assess whether they’re still the best approach in today’s environment, or whether they can be made more efficient, adaptable, and resilient.

Planning and partnerships

In my experience with Capgemini, the manufacturers that have been most successful in transforming their operations have two things in common.

First, these companies created a broad strategy for change, which they then broke into smaller programs that were easy to implement and that delivered tangible results. Making incremental progress is a better approach than attempting a broad-brush initiative that spans the entire organization. Those smaller programs can consist of pilot projects involving niche, non-critical products, so companies can fail fast and learn from the experience without unduly disrupting their business.

Second, the most successful companies resisted the urge to attempt this transformation on their own. As a sector, manufacturers have a history of going it alone, but it’s the companies that embraced working with technology specialists and other partners throughout their ecosystem that have enjoyed the greatest success. Capgemini has helped many clients in a broad range of manufacturing-intensive sectors to leverage technology to improve their operational performance. I would be pleased to discuss how Intelligent Manufacturing Operations can benefit your enterprise.

Meet the author

Vamshi Rachakonda

Vice President – Sales & GTM Lead – US Manufacturing, Auto & Life Sciences