May 10, 2017 by IDW

The production of goods in the modern global economy is undergoing a categorical shift.  The trends affecting manufacturing have their roots in the recent past, and will continue to produce effects well into the future.  In this article, we’ll discuss some of the most profound shifts in manufacturing trends that are occurring across nearly all industries.  These large-scale macro trends have necessarily had a fundamental impact on the design and manufacturing of commercial refrigeration products.  Our goal is to help you better understand these trends and how they will potentially impact the commercial refrigeration market helping you to better anticipate, and adapt, to the resultant risk and value opportunities stemming from these changes.

1.  Greater access to large scale manufacturing chains

As the pathways that link manufacturing with Corporate Procurement departments and their end consumers continue to be commoditized, the cost of harnessing the power of large scale manufacturing has fallen drastically.  This process, referred to as the commoditization of scale[1], will be a driving force in manufacturing in 2017 and beyond.  This process enables smaller businesses to capture the manufacturing power heretofore only reserved for the largest multinational corporations.  Additionally, the streamlined nature of the manufacturing pathways will result in lower overall production costs, shorter times between product design and product delivery to the consumer, and greater overall interaction between designers and consumers.  The end result will allow greater flexibility in manufacturing, while also creating more robust competition that will drive increased innovation.[2]

2. Enhanced integration with technology

Nearly all industries are currently looking to harness the power of Internet of Things (IoT) technology in their products.  Currently, IoT technology has transformed a myriad of industries, integrating consumers with their products in ways that were unimaginable a few years ago.  As the technology that powers IoT connectivity is scaled down, manufacturers will be able to embed this technology in nearly any device.[3]  Referred to as the Internet of Nano Things (IoNT), super small-scale IoT devices will be able to be placed in nearly any product.  This will allow end consumers to fully integrate with products using their handheld devices, while also providing an enormous amount of data to designers and manufacturers allowing them to drive innovative change faster and with less cost.  In commercial refrigeration units, IoT has the potential to provide greater levels of real time information data to brand marketers and retailers. Enhancing their ability to track consumer’s purchasing behaviors as well as enhancing environmental sustainability in the industry, allowing manufacturers to track real-world energy consumption and efficiency in real-time.  IoT technology will provide “big data” for refrigeration manufacturers to better understand trends in commercial refrigeration usage, allowing them to better anticipate and meet market demand.[4]

3. Enhanced emphasis on managing strategic risk.

We have already begun to see the largest corporations use strategic risk modeling to determine new avenues of production and market penetration.  This has allowed industry giants to successfully navigate the volatility of world market forces to their benefit, resulting in growth over time and continued profitability.  Smaller players and niche companies have begun to pick up on this, and are placing a greater emphasis on research and management of strategic risk.  This will result in greater overall stability of industries, including commercial refrigeration.  It will also lead to increased innovation as manufacturers and designers anticipate areas of strategic growth.[5]  The end result will be better designed products that meet current, rather than outdated, consumer demand.  It will also result in continuous feedback loops between market demand and product design, allowing manufacturers and designers to create less waste and better product design the first time around.  Simultaneously, companies that manage strategic risk successfully will have less overhead costs, less product surplus, and greater flexibility to meet the environmental, political, and social changes that create profound effects on continued viability.

These three manufacturing trends will generate fundamental transformations in the way that products are designed and manufactured in 2017 and the coming years.  Greater access to large-scale supply chains will allow even small players, such as niche commercial refrigeration companies, to gain cost-effective access to cutting edge manufacturing that heretofore were available only to the largest corporations.  Greater integration of technology into manufacturing will give manufacturers access to a scale of data on their products that has never been seen, while also creating important links between product designers and end consumers.  Successful management of strategic risk will allow even smaller manufacturing companies to anticipate and proactively act on emergent forces, resulting greater stability and growth.  Taken together, these three trends combined will result in greater product innovation, enhanced product design, lower costs, and less overhead.  Consumers will have access to better designed and manufactured products, and designers and manufacturers will see less time between product design and product deployment to consumers.

 

[1] Maxwell Wessell, “The Commoditization of Scale,” Harvard Business Review, March 2012: 3.

[2] Ibid., 4.

[3] Bernard Meyerson and Mariette DiChristina, “Top 10 Emerging Technologies of 2016,” World Economic Forum: Global Agenda (2016): 6.

[4] Ibid.

[5] Deloitte Advisory, “Disruption in Manufacturing” 2016: 16-28.

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