International Conference on Fiberreinforced Polymer: Future Trends in Global Advanced Manufacturing

Flexible Manufacturing

From the strategic plans of developed countries regarding the development of advanced manufacturing, the concept of manufacturing and its added value are gradually shifting from hardware to software, services, and solutions-intangible assets. Compared to traditional manufacturing, today’s manufacturing is largely driven by software, which enhances hardware functionality, controls it, and profoundly impacts it. Moreover, unlike traditional hardware products, the demand for services and solution-based products attached to goods is rapidly increasing.

Flexible manufacturing refers to increasing product-added value by expanding services and solutions. As opposed to hardware, the software, services, or solutions embedded within a product are usually intangible and flexible. In flexible manufacturing, “hardware” production is no longer viewed as the sole purpose of manufacturing. Instead, it’s recognized that software plays a dominant role in the manufacturing process, and the services or solutions produced by goods have a significant impact on the value of manufacturing. For example, at modern ports, the use of unmanned intelligent technologies allows AGV Transfer Carts to operate autonomously throughout the entire process. Thus, future manufacturing must abandon the traditional “hardware-focused” mindset and develop from the perspective that added value arises from software and services.

Software-led Innovation: In recent years, developed countries have increasingly used software to define product functions and performance, shifting the source of manufacturing product value from hardware to software. This shift has raised the entry barriers to the manufacturing industry. Electronic products are a typical example, where the majority are preloaded with operating systems and embedded with various software features. Many electronics can install additional applications (apps) through network connections. Even in the automotive industry, traditionally a hardware-dominated sector, the phrase “software determines product value” is becoming increasingly evident. Software now coordinates various hardware components in vehicles to improve fuel efficiency, and autonomous driving technology heavily depends on software.

In the U.S., companies like GE and IBM have long emphasized the role of software. GE moved away from traditional manufacturing thinking, investing heavily in software and data analytics, transforming itself into a data analysis software company. IBM is even more advanced, recognizing the coming era of big data management and focusing on the mathematical analysis abilities required for such management. Similarly, Europe has long realized that the future competitiveness of manufacturing on a global scale will depend on software. In the EU framework program, a substantial investment of 2.7 billion euros was dedicated to embedded software research (ARTEMIS). Large companies like Siemens and Bosch have also transitioned to IT enterprises.

Service and Solution-Oriented Business Models: Another key trend in the advanced manufacturing of developed countries is a strong focus on after-sales service, customer service, and solution-oriented businesses. The future manufacturing business model will be centered around continuously solving customer problems. In this model, companies will no longer only sell hardware but will generate additional value through the sale of maintenance services and providing follow-up services for the products. This shift toward service-oriented manufacturing has become common in the U.S., Germany, and the UK. Large U.S. companies tend to standardize services and solutions and promote them in emerging markets, while German and UK companies often succeed by consulting and making “manufacturing services” the core business model.

From “Physical” to “Information”

With advances in packaging and digitalization, the production and processing technologies for components are rapidly shifting to emerging markets, making it difficult for the profits from individual components to be maintained. Manufacturing in developed countries is increasingly focusing on assembling components into packaged systems, modularizing certain functional units, and systematizing functions to add value. Modularization involves assembling standardized parts to design products, allowing for a quicker response to diverse market demands and fulfilling consumers’ varied needs. However, modularization is just one feature of the product; future manufacturing will place greater emphasis on systematization, expanding new applications and services. By adopting a system-driven approach, manufacturers can gain more added value with “information” functionality compared to the “physical” components. Without controlling the system, even the best components will not dominate market prices.

American companies have consistently sought to obtain added value by focusing on upstream value chains, exemplifying the system-based approach. Companies at the upper end of the value chain control the market through systems. GE, for example, transitioned to an energy systems company in the 1980s and now applies those successful experiences to areas like healthcare services. Germany’s strategy revolves around Cyber-Physical Systems (CPS), with large companies like Siemens and Bosch fully recognizing the importance of systemization. Bosch, for instance, has launched packaging systems based on the AUTOSAR international standard and is aggressively expanding into emerging markets like India and China.

From “Group” to “Individual”

As developed countries transfer large-scale, mass-production manufacturing bases to emerging markets, a shift toward customized, small-batch production is becoming mainstream. The future direction of manufacturing in developed countries will focus on personalized demands, leading to the rise of “mass customization.” At the same time, consumers will have the ability to turn their own needs into production specifications.

With the widespread adoption of digital and information technologies such as 3D printing, the barrier to entering manufacturing is decreasing, and even individuals who need factories or production equipment can easily participate in manufacturing. This trend suggests that unexpected enterprises or individuals may participate in manufacturing, potentially changing business models significantly.

In the U.S., where individuality is strongly valued over organizational conformity, the trend toward personalized manufacturing is becoming evident. Smaller-scale, highly specialized manufacturing businesses focusing on efficient production and design flexibility are emerging in urban areas. These businesses offer customizable services based on consumer needs, creating differentiated competition against mass production.

Interconnected Manufacturing

Today, many products can access the internet, and society is becoming more networked. Smartphones and “smart appliances” are common examples. As cars move toward autonomous driving, vehicles may one day function as mere network terminals. Traditional material handling equipment like overhead cranes and gantry cranes are also starting to integrate the Internet of Things (IoT). The continuous networking of products, just as systemization is important, signifies the rise of “interconnected manufacturing,” where mastering control over the network will be key. Companies that first take control of this will benefit from first-mover advantages.

With the spread of information technology, the internet, and e-commerce, the competition in manufacturing markets is shifting. Manufacturing enterprises are now required to continuously gather information via networks and respond rapidly to market demands. They must also integrate and share resources effectively to optimize usage.

Interconnected manufacturing allows for rapid market response, quickly reconfiguring and dynamically collaborating with other manufacturers to allocate resources. By improving product quality, reducing time-to-market, and increasing market share, it also helps share the costs of infrastructure, and equipment investment and reduces business risks.

As a future trend, factories will evolve into interconnected facilities through the internet, advancing toward the trend of “smart factories.” This will involve collecting and analyzing data from the production floor and feeding it back to consumers. The data collected from the factory floor will serve as big data, which, when analyzed, will uncover new business opportunities. Processing the vast data gathered from hardware in the factory will largely determine the value of services and solutions.

The U.S., with its IT giants like Google and IBM, is leading in big data applications, placing a strong emphasis on creating new value for society. Google has acquired several manufacturing companies to gain control of the market. Similarly, GE is investing in data analytics and software development, collecting data from the shop floor to provide solutions and explore new business opportunities. In Germany, factory intelligence is a key national strategy, aiming to maximize the capabilities of factories through information technology.

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