This two-part post was written by John Zegers, Director, Georgia Center of Innovation for Manufacturing (JZegers@georgia.org). John is the director of the Georgia Center of Innovation for Manufacturing. He has nearly 30 years of manufacturing experience, which includes extensive time spent as a manufacturer’s representative. He also has significant experience with original equipment manufacturers in the medical, automotive, heavy equipment and communications industries.
In part 1 of this post, we learned how the face of manufacturing in America has undergone more woeful changes than many of us in the industry care to remember. However, there’s good news to share. The lower costs associated with reshoring are driving more local manufacturing activity; technological developments are drastically changing the way plants operate; and capital investments are on the rise.
As the director of the Georgia Center of Innovation for Manufacturing, John consults with manufacturing companies of all shapes and sizes on a wide range of projects. Over the past year, he’s been privy to a convergence of activities that suggest to him that 2015 will be a landmark year for American manufacturing. Here are his final three predictions:
4. Increased investments in predictive maintenance technologies
Closely tied to the above point about big data, U.S. manufacturers will increase investments for predictive maintenance technologies in 2015. The proliferation of better and cheaper sensor technologies combined with the trend of connected factories will allow for greater opportunity to implement predictive maintenance technologies that will cut downtime and boost bottom lines.
Over the past four years I personally have been involved in an array of different predictive maintenance technology projects. Two such companies are Dahlonega, Georgia-based Polymer Aging Concepts, which has developed sensors that predict when to replace the insulation in motors, generators, or dry transformers before failure occurs, and Atlanta-based Jeneer Group, which developed an integrated down well sensor system that signals pump conditions for on and off cycles in landfills. These companies serve rapidly growing markets, and customers are lining up to do business with them.
A recent article in Reliable Plant entitled “Global machine condition monitoring equipment market to reach $2.1B by 2015” stated, “Condition monitoring has gained importance, over the years… The need for eliminating catastrophic breakdowns and unnecessary maintenance costs in production processes has and will continue to drive the adoption of condition monitoring solutions across several industries.”
5. Increased investment in capital equipment
With the convergence of several predictions outlined above, such as the increase in applications of sensor technologies and general industry growth, 2015 will be the year in which we will see a true renaissance in domestic manufacturing.
Improved bottom lines will drive replacement of aging legacy equipment and investment in new capital equipment that performs better, more efficiently and more reliably. Software will also assist in making current equipment more efficient.
6. Manufacturing will grow at a higher rate than the GDP
The GDP historically has been a marker against which industries peg their overall performance.
A report issued in December 2014 by the Institute of Supply Management stated that manufacturing revenues are expected to increase in 15 different manufacturing industries in 2015. It also asserted that capital expenditures, a major driver in the U.S. economy, are expected to increase by 3.7 percent in the manufacturing sector.
Additionally, 67 percent of respondents to the ISM survey expect revenues to be greater in 2015 than in 2014, and the panel of respondents – all purchasing and supply executives – expect a 5.6 percent net increase in overall revenues for 2015, compared to a 3.6 percent increase reported for 2014 over 2013 revenues.
This momentum, combined with the factors outlined above, will contribute to a boom in manufacturing in 2015, helping the industry outpace the GDP for the first time in a long time.