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Delivering the US manufacturing renaissance

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Topics: Reshoring

Organizations: McKinsey

A strong manufacturing economy unlocks important employment and advancement opportunities—a factor set to grow in significance if current job market pressures ease. Manufacturing is the main economic engine and primary employer in around 500 US counties today, and in those communities, the industry employs a broader-than-average swath of the overall population and does so more inclusively. In most cases, employees don’t need four-year degrees, and they can earn twice as much as those holding equivalent service-sector jobs, as employers invest in upskilling and reskilling their current workers by offering expanded learning opportunities. Our analysis suggests that reviving manufacturing could add up to 1.5 million jobs, particularly among middle-skill workers, which would help recalibrate the US labor market and bolster the middle class.

Any reinvigoration of US manufacturing will also require reinvention. Around the world, companies are taking a fresh look at the paradigms that have dominated the industry’s evolution for decades, with the aim of making manufacturing more sustainable, more digital, more skilled, and more resilient.

Read more at McKinsey Operations Insights

How mining companies reach the operational excellence gold standard

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Authors: Xavier Costantini, William Fookes, Patrick Neise, Ferran Pujol, Bernardo Rubinstein, Guillem Sivecas

Vertical: Mining

Organizations: McKinsey

While the ten largest companies in the manufacturing and business services industries have seen their productivity index grow by around 15 percent and 25 percent respectively over the past 25 years, the ten largest companies in the mining industry have seen only marginal growth of around 1 percent over the same period.

The mining industry also has several unique features that may help explain why a culture of operational excellence has not yet been widely adopted. Productivity in the sector is often constrained by physical factors, such as ore quality. The industry also has a heavy focus on technical elements and capital levers rather than organizational culture and processes, while its dispersed and fragmented nature creates barriers to sharing best practices.

Read more at McKinsey Insights

What are Industry 4.0, the Fourth Industrial Revolution, and 4IR?

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Topics: Digital Transformation

Organizations: McKinsey

To get there, six core enablers can boost the odds of success for your company’s 4IR transformation:

  • An agile approach that incorporates quick iterations, fast fails, and continuous learning, with teams transforming bundled use cases in waves to drive innovation and ongoing refinements.
  • Agile digital studios can help people collaborate effectively, providing designated space where team members from different functions are in proximity for co-creation.
  • The IIoT stack allows for seamless integration of IIoT infrastructure (both legacy and new) to build a stable, flexible tech backbone. Costs can by limited by leveraging existing systems with efficient investment in a new technology stack.
  • An IIoT academy uses adult-learning best practices to upskill the workforce, offering customized learning programs based on the unique individual needs.
  • Tech ecosystems partner with vendors, suppliers, customers, and related industries to source the latest capabilities, offering access to extensive data sets and creating opportunities for innovating together.
  • Transformation offices can form a governance hub to support the launch and scale-up of a lighthouse, making progress and priorities transparent, ensuring value continues to be captured, and accelerating change.

Read more at McKinsey Insights

Toward smart production: Machine intelligence in business operations

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Authors: Duane S. Boning, Vijay D'Silva, Pete Kimball, Bruce Lawler, Retsef Levi, Ingrid Millan

Topics: Manufacturing Analytics, Machine Intelligence

Organizations: McKinsey, Vistra, MIT

Our research looked at five different ways that companies are using data and analytics to improve the speed, agility, and performance of operational decision making. This evolution of digital maturity begins with simple tools, such as dashboards to aid human decision making, and ends with true MI, machines that can adjust their own performance autonomously based on historical and real-time data.

Read more at McKinsey Insights

Global Lighthouse Network: Unlocking Sustainability through Fourth Industrial Revolution Technologies

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Topics: sustainability, IIoT

Organizations: World Economic Forum, McKinsey, Ericsson, Henkel, Schneider Electric, Flex, Johnson & Johnson, Protolabs, Foxconn, Innolux, Western Digital

The Global Lighthouse Network is a community of production sites and other facilities that are world leaders in the adoption and integration of the cutting-edge technologies of the Fourth Industrial Revolution (4IR). Lighthouses apply 4IR technologies such as artificial intelligence, 3D-printing and big data analytics to maximize efficiency and competitiveness at scale, transform business models and drive economic growth, while augmenting the workforce, protecting the environment and contributing to a learning journey for all-sized manufacturers across all geographies and industries.

Read more at World Economic Forum News Releases

Transforming quality and warranty through advanced analytics

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Topics: manufacturing analytics, quality assurance

Organizations: McKinsey

For companies seeking to improve financial performance and customer satisfaction, the quickest route to success is often a product-quality transformation that focuses on reducing warranty costs. Quality problems can be found across all industries, and even the best companies can have weak spots in their quality systems. These problems can lead to accidents, failures, or product recalls that harm the company’s reputation. They also create the need for prevention measures that increase the total cost of quality. The ultimate outcomes are often poor customer satisfaction that decreases top-line growth, and additional costs that damage bottom-line profitability.

To transform quality and warranty, leading industrial companies are combining traditional tools with the latest in artificial-intelligence (AI) and machine-learning (ML) techniques. The combined approach allows these manufacturers to reduce the total cost of quality, ensure that their products perform, and improve customer expectations. The impact of a well-designed and rigorously executed transformation thus extends beyond cost reduction to include higher profits and revenues as well.

Read more at McKinsey

Smart quality in advanced industries

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Authors: Álvaro Carpintero, Ulrich Huber, Evgeniya Makarova, and Heiko Nick

Topics: quality assurance

Organizations: McKinsey

Technological advancements have enabled a fundamentally new way of delivering quality. Under this approach, companies view the quality function as a partner and coach that delivers value, not just a business cost. This perspective helps them integrate quality and compliance into regular operations while enabling speed and effectiveness.

Read more at McKinsey

A manufacturer's guide to scaling Industrial IoT

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Authors: Andreas Behrendt, Enno de Boer, Tarek Kasah, Bodo Koerber, Niko Mohr, Gérard Richter

Topics: IIoT

Organizations: McKinsey

Despite tailwinds from declining compute power costs and improvements in IIoT integration, connectivity, and platform usability and management, few manufacturers have successfully scaled up their IIoT-enabled use cases in a way that achieves significant operational or financial benefits.

To understand the key enablers behind IIoT-based value capture at scale, we drew on our field work and extensive research of those companies successfully scaling IIoT to offer manufacturers ready-to-use guidance on strategically orienting their business, organization, and technology toward IIoT success.

Read more at McKinsey

Industry 4.0: Reimagining manufacturing operations after COVID-19

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Authors: Mayank Agrawal, Karel Eloot, Matteo Mancini, Alpesh Patel

Topics: COVID-19

Organizations: McKinsey

Industry 4.0 technologies were already transforming manufacturers’ operations before the pandemic. Now adoption is diverging between technology haves and have-nots.

Read more at McKinsey