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Impact on jobs in manufacturing conglomerates
There has been a continuous discussion on Industrial robots replacing people in the manufacturing
industry. However, it’s not as bad as it portrayed. In the last 20 years, the output in the
manufacturing industry for U.S. has improved by nearly 40%, and annual value added by U.S.
factories touched a record $2.4 trillion. While there might be fewer jobs, more stuff is getting done.
Manufacturing employees will be more educated, better paid and producing quality products.
(Rendall, 2016)
However, different skills will be required to excel in these manufacturing jobs. Going forward, the
trend toward higher automation will displace some of the often low-skilled laborers who perform
mostly repetitive jobs. Also, the rising potential of software and analytics will increase the demand
for employees having skills in software development and IT technologies.
Next 5 Years predictions
In next 5 years, nature of products will be changing drastically by getting smarter, better connected,
and more responsive. At the same time, how consumers view and use products is changing for
instance products as physical platforms, redefining the factors that determine product value
(Deloitte, 2015).
Investors will be expecting steps that enhance profits, encourage the high growth opportunities
and reshape the conglomerate’s long-term position with acquisitions and divestitures. For instance,
GE is a major investor in Desktop Metal, a trending start-up in 3-D printing might acquire it
(McKenna, 2017). Further, GE Renewables contributed 8% of total industrial segment revenue in
2016. Despite the low-profit-margin, the renewable business grew revenue 44% from 2015.
Learning from this, GE might acquire a significant solar manufacturer as well. Finally,
biopharmaceutical manufacturing offering unmatched high margin revenue opportunities we
might also see some rapid acquisition activities in this landscape (Chatsko, 2017).
Manufacturing processes will be augmented through integrated IT systems and manufacturing
units will be replaced by automated, integrated production lines. Production processes will be
designed through the collaboration of producers and suppliers. Physical prototypes will be reduced
to an absolute minimum.
Suppliers will have to increase the role of IT in their processes. Transformations will include a
greater functionality with development in the cloud and on embedded devices. Automation
architectures will also evolve and suppliers will have to prepare for these various scenarios. The
increasing interconnectivity of machines, products, and people will also require new international
standards that outline the interaction in the digital factories of the future.
Next 10 Years predictions
Manufacturing lately was a daunting space with relatively few players. Barriers to entry have been
high requiring initial investments and multiple intermediaries. However, massive shifts in
technology and policies will eliminate those barriers. In response to this, big manufacturing
conglomerate will join forces, leveraging the scale to provide components and platforms used by
smaller manufacturing companies.
Customization as per consumer’s needs will also become a top priority in 10 years. However, the
surge in both customization will be much more than just cosmetic changes. For instance, it might
involve generating a product made for your unique body, or buying a pair of drugstore reading
glasses (Deloitte, 2015).
Next 15 Years predictions
Progressive manufacturing conglomerates will take these challenge as marketing opportunities
offering opportunities for engagement. They will leverage on extending the product as platform
idea into a precise business vision.
Also, the expanding digital infrastructure and universal connectivity will create many
opportunities to rethink the product as a service. For example, the GE division manufactures
aircraft engines for Boeing and Airbus. These engines, have relatively low margins. Consequently,
more profit is made servicing this equipment than on the initial sale. GE has introduced a “Power
by the Hour” program that shifts from sales and service to a utility model (Kelly-DEtwiler, 2017).
Next 20 Years predictions
The future of 3D printing will guide the next industrial revolution in next 20 years. Manufacturing
will be disrupted transforming from analogue, manufacturing technology, to a digital 3D printing.
For this reason, it will become accessible to anyone for producing products. Also, 3D printers will
continue to increase in superiority, speed, and reduction in cost.
Shapeways has demonstrated this business model where mass-consumed products will continue to
be traditionally manufactured, specific products can be developed and customized based on
customer feedback (Hastreiter, 2016).
With firm predictions of quick shifts in consumer demand, speed to market will become extremely
crucial. Manufacturing conglomerates will also be taking advantage of speed. Taking these aspects
into consideration, speed to commercialization is will to become a rule rather than the exception.
Expected changes in Manufacturing Conglomerates
Traditionally, to achieve growth, conglomerates had two options: buy or build. Developments in
digital technology and connectivity will provide a third opportunity, “leveraged growth,” in which
a conglomerate will empower third parties in the manufacturing landscape to create for its
consumers. In addition to assisting with financial assets, conglomerates will leverage the
capabilities of its third-party associates. With this, they will reduce risk, expand their outlook to
exploit performance, and reduce costs by taking advantage of existing resources.
This transformation is very much in the domain of larger conglomerates having the resources to
impact market forces. These conglomerates will be very successful if they cultivate strategies that
enable them to appeal and sustain many fragmented players.
Two favorable business models emergent in the manufacturing domain for conglomerates would
be the transition from products to platforms and ownership to access (Deloitte, 2015). The
transition from ownership to access will allows conglomerates to shift their focus from
manufacturing products to creating long-term customer relationships. At the center of this shift is
a framework that combines resources and enables consumer access. With it, customers can access
products as they need them. Conglomerates will use data collection and feedback to progress
consistently.
With barriers to entry getting weakened, many conglomerates will see their position declining.
Supremacy once resulting from sheltering stocks of information will transform to conglomerate’s
place in the flow of information. Though patents and intellectual property will remain esteemed,
their significance will be diminishing as the speed of innovation will increase and product life
cycles decrease.
Big conglomerates will have a benefit here, as they tend to have resources valuable to many
fragmented players. Patent portfolios will be utilized to increase knowledge flow, rather than a
barrier to entry. GE took this path when it gave Quirky community members access to GE patents,
encouraging innovation outside the primary patent domain.
Further, the conglomerates would look for ways to collaborate with other players and determine
how it might capture developing influence points. Manufacturing landscape being so dynamic,
such exploration will be a continuous process, one that conglomerates must keep on implementing
if they want to stay relevant.
For big conglomerates, the potential of agile manufacturing will help them to stay competitive
while staying responsive to unpredictable market factors. The central approach to this agility
would be the digital infrastructure support providing access to the real-time point of sale data
(PLANETTOGETHER, 2016).
When launching a new product with less probability of market acceptance, conglomerates will
instead choose to focus on producing “minimally viable quantities,” following agile manufacturing
practices. Overseas production will influence minimum manufacturing quantities to compensate
for long lead times from production to the customer.
Impact assessment
The general atmosphere is still a bit hostile for conglomerates for discerning reasons. Stakeholders
need administrators to concentrate, to stick to what they know and not extend things too thin. With
the emergence of Google’s Alphabet, there’s still a chance to demonstrate certain organizations can
take the conglomerates template and adjust it to the new economy. Though, Google still needs to
pass the trial of achievement with sharp acquisitions, reinforce for focus associations and
productive change of further contemplations. Focused organizations may even now be more secure
bet for some speculators. Conglomerates require excellent clarity behind their need to expand
beyond their core areas. Very few conglomerates seem to possess this chief trait, and only those
will last the test of times.
Alphabet and other upcoming conglomerates are mainly focused on innovative technology
ventures. GE officials around the twentieth century considered electricity to be an innovation that
could change practically everything. The present innovation companies have seen PCs change
everything once more. However, unlike the previous times, the true resurrection of conglomerates
isn’t in the manufacturing domain. Organizations like Facebook, Google, Amazon, are not
characterized by a specific industry but a specific arrangement of skills.
Disruption is absolutely a test for the present conglomerates. In any case, is has likewise turned
out to be a massive prospect. Subsequently, we will be seeing conglomerates turn out to be
considerably more specialized in specific zones and leaving markets that may not meet their longterm
development. Conglomerates have since a long time ago drove the part in making new plans
of action and specializations; the move from products to services was mainly determined by
conglomerates, for example, GE, Philips etc. As these pioneers keep on evolving — GE into
‘computerized industry’ and Philips into healthcare. Going forward, we will see conglomerates put
more emphasis on molding their products and — where conceivable — consolidating innovations
that make their offerings more proficient, more dependable and more profitable to clients (KPMG,
2016).
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