Silicon Valley Firms Point to Digitalization as a Golden Opportunity for Manufacturers

This report summarizes the findings from the sources of many transformational technologies that focus on digitalizing the manufacturing industry. 


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“There’s gold in them thar hills!” This phrase dates to the gold rush of 1849. Today, more than 160 years later, these words are a stirring call to attention, usually to an opportunity that leads to higher profitability. This is exactly the vibe I got when visiting some of the leading companies in Silicon Valley—important companies that see a golden future for manufacturing, both figuratively and literally.

Recently, the board of directors of AMT – The Association For Manufacturing Technology sponsored a mission to Silicon Valley. I was a guest on this journey. The goal was to explore what many consider to be the “mother lode” of new technology developers, the source of many transformational technologies that focus on digitalizing the manufacturing industry. Here are some brief reports on the companies we visited. If you are going to “stake a claim” in this new territory, these are the transformational technologies and mindsets to watch.

Augmented reality (AR) stands to benefit industry in the next five years. Merging what the eye can see with what digital data can show will dramatically increase efficiency, reduce risk and increase safety. Wearing a HoloLens or similar headgear, workers can access expertise and knowledge when and where they need it most. For example, UC Berkley start-up Atheer has created an AR platform designed to provide a more responsive, safer and more reliable manufacturing environment. Because AR integrates the digital world with the physical world, it “augments” the decision-making power of the user, who can now identify, verify and apply the best practices to be competitive. Promising applications include teaching complex assembly, guiding maintenance routines, soliciting expert support, managing quality assurance and collaborating with automation.

Artificial intelligence (AI) will become our inventor. We know how to engineer automation, but can we automate engineering? This possibility is nearer than we might expect. Advanced software gives computers the ability to solve problems the way people do, by studying the situation, reviewing experience, creating experiments and learning from mistakes. For example, Silicon Valley robot manufacturer Kindred uses AI so robots can solve real-world problems in complex, changing environments such as manufacturing. They learn as they work. These solutions help customers increase productivity and expand capacity. Interestingly, the company has a robot-as-a-service business model with no upfront capital expenditures.

Additive manufacturing (AM) is now more about production than prototyping. This is true particularly for industries such as medical, aviation and aerospace. AM makes it possible to customize each part, take out weight and make one part out of several to streamline assembly and simplify processes. With the resulting economy, additively manufactured parts are paying their own way. AM is evolving rapidly as new materials are developed, processes are improved, and machines are built to reduce cost and work faster. The supplier base is expanding, too. For example, Hewlett-Packard is leveraging its extensive research and development capabilities in combination with its traditional printing technologies to promote AM. Its new Multijet Fusion technology is making 3D printing faster, less expensive and easier to integrate.

Generative design magnifies imagination and speeds invention. Traditionally, designers start with what they know and adjust features and parameters as they move to new projects. What if designers could know virtually every possibility or option at the start to find the features and parameters that work best? This is the concept of generative design. A massive database and powerful algorithms sort and test virtually unlimited design possibilities to identify those that best meet predetermined goals and obey constraints set by the designer. Autodesk is leading the way in the development of this technology. It harnesses extreme computing power to create forms that maximize functionality and minimize waste, for example. The software can further optimize the design by tailoring it for a specific material and manufacturing method. This may be the ultimate form of data-driven manufacturing.

Everything by the number: The factory of the future is already here. The convergence of the virtual and physical worlds is possible when both can be represented digitally. This allows the ideal and the real to be compared, analyzed and brought closer together in software applications. However, this in turn can only happen when digital information can be gathered, saved and shared. Networking and connectivity become critical enablers. Not surprisingly, Cisco, the quintessential San Francisco technology company, is pioneering a new era of networking for manufacturing. It is working to make every system connectible to a network that is feasible, effective and secure. Now every part and component can be tracked, and every process can be visible and traceable.

Sustainability and innovation as a strategy. Tesla is arguably the most recognized manufacturing company in Silicon Valley. Yet Tesla is clearly much more than a car manufacturer or a technology company. True, it seeks to sell electric vehicles that are both desirable and affordable. (Its model S is the safest and fastest car on the road today.) Tesla is also a leader because of its policy of relentless and disruptive innovation. The underlying vision, however, is unchanging: to create cars as autonomous as the market wants in a way that sustains, not depletes, natural and human resources. To fulfill this goal, it will have to transform an entire industry. The current challenge is to master high-volume production and achieve true economy of scale. While Tesla is not there yet, the clues that it will succeed are evident.

A lesson in entrepreneurial spirit. For all the stories that you hear about start-up software companies in Silicon Valley that have become wildly successful, there are many forgotten or untold stories about start-ups that have failed. But all of these stories have a common element. The entrepreneurs behind them started with a bold idea and took risks to develop it. Fear didn’t stop them.

Manufacturing companies can learn from this. Lately, Silicon Valley has developed a new or reenergized interest in making things. These companies see a golden opportunity in the manufacturing industry.

Do you? There is no disputing the fact that manufacturing is changing at an accelerating rate. This is due in large part to the transformational technologies that are mentioned above: augmented reality, artificial intelligence, additive manufacturing, generative design, digitalization, automation and data networking. The best way to respond to change is to anticipate it and participate in it. The result could be the next “Gold Rush” for manufacturing, but not if fear holds you back.