By Terry Smagh
In the dynamic digital landscape, spanning finance, healthcare, manufacturing, and beyond, it’s crucial to anticipate the technology trends shaping 2024. While the upcoming year, may not usher in a revolutionary shift, it will undoubtedly strengthen the positions of businesses that have already embraced core technologies, both physical and virtual. This strategic reinforcement will enhance business stability and enable the delivery of higher-value services while maintaining adaptability to the unique demands of their respective industries.
Here are some specific predictions for the upcoming year.
- Increasing use of artificial intelligence and machine learning by operational people. According to a report by PwC, the manufacturing sector in India has seen a maximum increase of 20% in the adoption of AI/ML solutions. Also, in recent times, CHATGPT inspired many headlines in 2023. This triggered lots of exploration and raised expectations, but many activities were continuing to occur in silos. In the meantime, concrete examples showing how machine learning provides insights to operational activities have proved the benefits for machinery and equipment manufacturers. Depending on the use case, the potential for increased productivity via AI/ML, improving profitability and, growing revenue is no longer debatable and will continue to be far more accessible. The best of the best will leverage a platform-centric, composable approach and a continuous improvement mindset to ensure they expand on their initial gains in the future.
- Collaboration and interoperability are no longer optional for delivering successfully against customer service goals. Real-world factors continue to disrupt supply chains and raise manufacturers’ operational and financial risks. Fighting harder for lower unit pricing from suppliers, especially those in less mature regions, might mitigate one aspect of rising costs but often leads to unintended consequences, such as higher inventory levels, operational delays and rising transport costs.
- Servitization will open up new channels and market opportunities. The now proven infrastructure, technology and “as a service” concepts for electric vehicles within the automotive sector have created momentum for similar transitions with machinery and equipment manufacturers as they look to provide traditional and fully-electric equipment offered as a service. With a parallel focus on sustainability and the circular economy, a servitization approach will enable manufacturers to extract large amounts of operational data. This will continue to deepen the understanding of how a manufacturer’s products are utilized by their customers, allowing for focused product improvement in the medium to longer term.
- Near-shoring and friend-shoring will continue to increase. While near-shoring is more expensive than a more traditional out-sourcing approach at the initial read, a holistic view of costs will see it as almost cost equivalent when all factors, such as inventory obsolescence, expedited transport costs, and cost of quality are considered, while also providing additional flexibility and responsiveness. Moreover, the practice of near-shoring addresses the need to de-risk the supply chain by establishing secure relationships that provide higher levels of flexibility.
- Additive manufacturing will find its niche. While earlier predictions on the adoption of additive manufacturing, otherwise known as 3D printing, appear inflated, specific tasks and material requirements are proving to be highly suited to this method of manufacturing. To be effective, there will be high-definition, closed-loop data flows between research and development, new product introduction, manufacturing operations, and quality. Potentially, this closed loop might reach all the way out to the customer. This will firmly establish when and where such items are suitable, and provide the confidence to expand the boundaries over time.
Organizations that are already building on foundational, platform capabilities in the information and product space will find an increasing number of business activities that can be augmented in 2024. Following a non-fragile approach will maximize the benefit.
However, for companies that are not yet on that path, now is the time to start. While cash looks to remain more costly, industries with a slightly suppressed customer demand can take advantage of the ideal opportunity to make the necessary changes. Those that do, have been shown to come out on top.
(The author is Terry Smagh, Senior Vice President & GM – Asia Pacific and Japan, Infor, and the views expressed in this article are his own)
