Pandemic Accelerates Smart Manufacturing Trend as U.S. Companies Face Disruptions, Continue Push Into Services

Manufacturers in the U.S. increasingly are investing in smart manufacturing technologies, both in response to the COVID-19 pandemic and as part of ongoing trends toward cost reduction and selling products as a service, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2020 ISG Provider Lens Manufacturing Industry Services report for the U.S. finds that the pandemic has had several effects on the country’s manufacturing enterprises, some of which have accelerated pre-existing trends. Automation, virtualization and local manufacturing are gaining traction.

“Given the level of disruption the pandemic caused to the manufacturing sector in 2020, companies found an even greater need to transform their operations to create a high level of resiliency,” said David Lewis, partner and Americas manufacturing industry lead for ISG. “In unpredictable times, agility, customer experience, and cost control are paramount.”

Social-distancing requirements forced U.S. enterprises to operate with fewer workers on shop floors, making remote monitoring, connected machines and predictive maintenance necessary in a growing number of factories, the report says. This change dovetailed with the move toward paperless factories, so companies commissioning or updating assembly lines seized the opportunity to implement a high degree of automation.

Supply-chain disruptions caused by the pandemic have, for instance, spotlighted the fact that chronic issues such as machine downtime often go unnoticed, ISG says. Companies are deploying automation and Internet of Things (IoT) technologies to bring downtime under control. Likewise, supply-chain challenges have helped to spur investments in virtualized manufacturing and smart local factories closer to customers.

These changes are occurring against the backdrop of a shift from exclusively making and selling products to providing digital services for them, the report says. For example, automakers are developing their vehicles for over-the-air software updates and even shared-mobility models, which present opportunities for continued revenue and ongoing engagement with customers after purchase. This trend, along with accelerating product cycles and declining customer loyalty, are making data about consumer preferences and the use of products in the field more important to manufacturers.