Trends in Manufacturing
Everyone has heard of the industrial revolution: the dawn of factories and workshops, and complete transformation of the global economy, unravelling from Great Britain across Europe and vast swathes of the world. However, the story of progress has been a continuous one, with the automobile and the computer both having profound impacts on the way goods have been manufactured and sold. Factories that rely on human hand, in often dangerous conditions, became automated by robots controlled by highly skilled operators, working in sanitized environments.
Technological Advances of the Past Decade
Industrial revolution is a continuing process not a historical concept: many have described the last decade as a quiet 4th industrial revolution, with profound implications for small and medium businesses. Technologies such as 3D printing and the related concept of additive manufacturing have created opportunities for a very different type of manufacturing. Until this decade, the pinnacle of production has been defined by scale and homogeneity: massive production runs of identical products produced in “subtractive” processes (a raw material is machined, cast, cut away etc. etc.). The largest companies often forced out smaller competitors, leveraging the barriers to entry introduced by large upfront costs and huge economies of scale.
With additive manufacturing, the more “artisan” producer has the capability to rapidly re-tool production to flexibly meet the needs of the customer: moving from mass production to customized production. 3D printers tended to be used predominantly for rapid prototyping but have become increasingly popular for final use components, with the benefit of making rapid changes to the product without requiring expensive molding. Adjustments can be performed by re-programming a CAD design rather than requiring mass re-tooling. Machines can be purchased to provide this capability for a fraction of the cost, while avoiding raw material waste: an increasingly relevant concern as environmental awareness and regulation continues to grow. Robots themselves are becoming smaller and smarter, easily trainable on a variety of precision-based needs.
Increasing Operational Efficiency
Manufacturers are also able to operate more efficiently through utilizing what has been coined the “Internet of Things” (IoT). Outdated Enterprise Resource Planning systems have made manufacturers flat-footed in responding to consumer demand, while data warehousing provides more predictive analytics and a far clearer view of production needs across complex supply chains. Meanwhile, factory equipment is interconnected. This means that devices act as sensors, providing live feedback about their own health and potential issues with the manufactured product. They are increasingly programmed to use this data to self-learn, taking production data and using that to refine the production process. This is of huge value, with this data helping manufacturers both identify production quality issues immediately to avoid producing defective items, while performing pre-emptive maintenance to minimize down-time and repair costs.
Quality in Manufacturing
From Amur’s perspective as a lender, we welcome these technologies as assets to manufacturers looking to provide an affordable and flexible service for their customers. The upfront cost of this business essential equipment can typically be financed to ensure affordability, with the value added by the new equipment to the manufacturing process repaying its cost many times over. The opportunities to bring back an artisan quality to manufacturing through rapid responsiveness to the customer provides natural comparative advantage to smaller manufacturers.
James Truran is the Chief Operating Officer at Amur Equipment Finance. He joined Amur Finance Company in 2017 and led projects to improve process and operational efficiency within Amur and its subsidiaries.
Prior to joining Amur, James worked for over a decade for the UK Government. He most recently served in the Pentagon as the UK’s Exchange Officer to the Office of the Secretary of Defense. James has also worked in military Headquarters including the UK’s Permanent Joint Head Quarters, U.S. Central Command, and deployed locations; with a focus on operational policy and planning.