Michael Kotelec | Verizon Enterprise Solutions

As 2015 approaches it’s time to look ahead at emerging trends that will impact 21st century manufacturing around the globe.

The entire supply chain ecosystem — encompassing manufacturers, distributors and retailers — is undergoing a business transformation. This is in response to changing dynamics involving shifting consumer expectations, time to market and intense global competition that is being dictated by the rising Internet and mobile economies.

Advances in technology — coupled with changing labor demographics — are proving to be the lynchpin shaping this new business model. To remain economically viable, retailers must sell products faster and at competitive prices which sends a ripple effect down the supply chain. For example, manufacturers must accelerate production cycles and distributors must shorten delivery times.

Stakeholders throughout the supply chain have no choice but to adjust their business models to meet consumer demand and increase profits. However, technology is helping businesses stay relevant in these changing times. Let’s take a look at five manufacturing trends that will impact the industry in 2015:

1. ‘SMAC Stack’ adoption to gain speed.A manufacturing comeback is being driven by SMAC — social, mobile, analytics and cloud. The SMAC Stack is becoming an essential technology tool kit for enterprises and represents the next wave for driving higher customer engagement and growth opportunities. The need to innovate is forcing cultural change within a historically conservative “if it’s not broke don’t fix it” industry, and SMAC is helping early adopters in the manufacturing market increase efficiencies and change. 2. Social media to further impact business model innovation.According to an IDC white paper, “The Future of Manufacturing,” sponsored by Infor, social media is forcing manufacturers to become more customer-centric. The traditional business-to-business model is becoming outdated because today’s connected consumers are better informed and expect products on-demand. Consumers compare, select or buy multiple products with a tap of their smartphone or tablet, and social media has become their preferred communication platform. This consumer purchasing style is not only having an impact on brand-oriented value chains, but is transforming traditional B2B to B2B2C models. 3. Internet of Things (IoT) will increase automation and job opportunities.A renewed focus on science and engineering education is cultivating a manufacturing workforce that can manage highly technical systems and allow for greater automation. This frees up employees to put their talents to work on R&D which is helping to redefine what it means to have a career in manufacturing. In addition, IoT allows for condition-based maintenance which is driving efficiencies as businesses save on labor and service costs. 4. Greater capital investment.Though the slow economic recovery continues to hinder expansion and growth opportunities, recent government and industry reports show an uptick in capital investment funding. As manufacturers become focused on capturing value through innovation, original design and speed to market, they are increasing spend for upgrading plant, equipment and technologies. 5. The emergence of “Next-Shoring.”The rise of a more technical labor force to manage supply chain operations — combined with rising wages in Asia, higher shipping costs and the need to accelerate time to market to meet retailer and consumer demands — has led to more companies shifting their manufacturing strategies from outsourcing overseas to developing products closer to where they will be sold. “Next-shoring,” as this tactic has been dubbed, allows manufacturers to increase the speed at which product is replenished on store shelves. The faster inventory can be moved to the consumer, the sooner the costs to warehouse, ship and dock goods can be freed up.

These are a few of the game-changing trends expected to impact manufacturing in 2015 and it will be exciting to watch which take off as the industry continues to evolve.

Michael Kotelec is a global practice leader for Verizon Enterprise Solutions with more than two decades of experience in manufacturing.

IndustryWeek