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Pictures of the Future
The Magazine for Research and Innovation

Digital Factory

Facts and Forecasts: Renaissance in Manufacturing

The global market for 3D printing technology, also known as additive manufacturing, will grow to approximately $5.2 billion by 2020, according to estimates of the U.S. market research institute Global Industry Analysts.

Additive manufacturing is expected to profoundly change the way goods are produced, thereby transforming industry, commerce, labor markets and logistics.

Over 200 years ago the first industrial revolution ushered in the transition from agrarian to industrial society.

Today, according to the study “Manufacturing the Future: The Next Era of Global Growth and Innovation,” published by the McKinsey Global Institute in November 2012, industrial production generates output worth $7.5 trillion, or 16 percent of the global gross domestic product (GDP), and employs about 45 million skilled workers in the industrial countries.

With the financial crisis winding down, industry is now undergoing a renaissance in Western countries. In Germany, the manufacturing industries are producing more, as a share of GDP (excluding the construction sector), than at any time in the last five years. McKinsey calculates that manufacturing accounted for 19 percent of German GDP in 2010. The global average is 17 percent, and individual values range from 10 percent for the United Kingdom, 12 for the United States, and 20 for Japan, to 33 percent for China.

“The U.S. is becoming one of the lowest-cost producers of the developed world."

The European Union Commission intends to expand industrial production in the EU from its current share of 15.5 percent of GDP to 20 percent by 2020. Industrial policy is expected to focus on investments in innovation, improved market conditions, access to capital, and better vocational training. Manufacturing companies make a major contribution to the research and development done by a country. For example, the industrial sector accounts for over two thirds of the private R&D activity and more than 90 percent of the new patents in the U.S., according to the Congressional Research Service.

A study carried out by the Boston Consulting Group in 2011 indicates that “Made in America” is once more paying off. Increasingly, China’s industry is encountering competition from the U.S. “The U.S. is becoming one of the lowest-cost producers of the developed world,” says Harold Sirkin, one of the authors of the study. Rising Chinese wages, higher U.S. productivity, and the weak dollar could soon close the gap between China and the U.S. In August 2013, for example, manufacturing in the U.S. recorded its greatest increase in production output in two years, according to a study by the Institute of Supply Management ISM (USA). In 2010, the cost to generate a dollar in sales was about 12 percent lower in a factory in China than in the U.S., but by the year 2015, the difference in cost will decrease to seven percent.

Integrating Production and Supply Chains in Real Time

Smart factories are a key element of a new form of industrial production, which, in Germany, is called “Industry 4.0.” Changes are starting to occur in manufacturing as a result of cyber-physical systems (CPS) and the Internet of things – two terms referring to the combination of software, sensors, processors, and communications technology underlying Industry 4.0. In the future, there will be cyber-physical systems associated with smart machines, warehousing systems, and facilities that exchange information autonomously. “Thanks to CPS, the factory of the future will integrate production, supply chains, and individual customer preferences in real time,” explains Prof. Henning Kagermann, President of the German National Academy of Science and Engineering (acatech). However, the realization of will require a number of steps over the next 20 years, especially with regard to standards, interfaces, and processes. Smart factories offer huge potential for enhancing production efficiency.

The global market for industrial automation posted turnover of almost $160 billion in 2012, and it will reach approximately $200 billion by 2015, according to IMS Research. A recent analysis by Frost & Sullivan indicates that the market for industrial networks and communications technologies like Ethernet and wireless systems will grow from €854 million of revenue in 2010 to almost €1.6 billion in 2015. This will be due to the pursuit of higher productivity and to cost reductions resulting from the use of real-time data. Demand for fast and reliable industrial computers is also growing. Frost & Sullivan predicts that the global market for these computers will grow from $2.1 billion in 2011 to $3.2 billion by 2015.

According to a study conducted by Roland Berger, 3D printing (also known as additive manufacturing), had a global market volume of €1.7 billion for metallic structures in 2012. Experts at Roland Berger predict that the market volume will increase at least fourfold over the next ten years. The sectors that will especially make increased use of additive manufacturing are the aviation, medical technology, and automotive industries. According to experts, this rapidly rising demand is due to potential process cost reductions of up to 50%.

3D Printing and Open-Source Software: Revolutionizing Manufacturing

The global market for 3D printing technology, also known as additive manufacturing, will grow to approximately $5.2 billion by 2020, according to estimates of the U.S. market research institute Global Industry Analysts. With this technology, computer-controlled machines are used to manufacture products directly from design data by building them up layer by layer from liquid or powdered raw materials. In the future, spare parts could be supplied this way with little delay, “straight from the printer.”

People are increasingly turning to open-source software when they need databases, Web browsers, e-mail clients, or development or content management systems. This software is publicly available at no charge and, depending on the license, it can be freely copied, modified, and distributed to others. Many companies have switched to the open-source operating system known as Linux to run their servers. Open-source software and existing Web platforms can also be used to integrate participants into the product development process anywhere, at any time. This trend is known as “crowdsourcing”. In principle, it could enable a designer in Europe to simply send production specifications via e-mail to a customer in Australia, for example, who could then print out the desired product, such as a lamp, all by himself, or even provide input at an early stage of the design process for the lamp. This technology will be used more often as the scanning processes used to obtain 3D models are simplified, certification of simulations becomes available, 3D printers become less expensive, and software improves. Applications range from medical implants to plastic components used in aircraft and industrial robots. Neil Gershenfeld, who directs the Center for Bits and Atoms at the Massachusetts Institute of Technology (MIT) in Boston, is confident that “3D printing will transform industry and commerce.”

Sylvia Trage