Annual OEM Outlook 2014

Challenges and Opportunities in 2014

Thanks to big data, the environment around you will anticipate your every move. Computerized sensing and broadcasting abilities are being incorporated into our physical environment, creating what is sometimes called an “Internet of things.” Data flowing from sensor networks, RFID tags, surveillance cameras, unmanned aerial vehicles, and geo-tagged social-media posts will telegraph where we’ve been and where we are going. In the future, these data streams will be integrated into services, platforms, and programs that will provide a window into the lives, and futures, of billions of people.

Doctors will see brain diseases many years before they arise. Brain scans can warn doctors if a patient will suffer Alzheimer’s, dementia, Lou Gehrig’s, or a number of other brain disorders as many as 10 to 15 years ahead of physical symptoms. Doctors could then slow the progression of the diseases if they start administering treatments years earlier.

Quantum computing could lead the way to true artificial intelligence. Conventional computers cannot make decisions, as humans do, but quantum computers eventually might. They use programs based on quantum mechanics to see multiple possible outcomes to any given problem and combine information from each to formulate solutions.

The future of science is in the hands of crowdsourcing amateurs. So-called “citizen science,” which uses networks of volunteers in scientific research, is on its way to becoming the favored twenty-first-century model for conducting large-scale scientific research.

Atomically precise manufacturing will make machinery, infrastructure, and other systems more productive and less expensive. What the term “nanotechnology” really refers to is atom-by-atom production, which will allow for extraordinary improvements in manufacturing all things. One major benefit could be far cleaner energy, such as liquid hydrocarbon fuels produced using hydrogen from water and carbon from recycled CO2.

Buying and owning things will go out of style. The markets for housing, automobiles, music, books, and many other products show a common trend: Younger consumers opting to rent or subscribe to pay-per-use arrangements instead of buying and owning the physical products.


Innovation: The New Frontier for Quality

Is quality still relevant? It’s a question John Timmerman, Ph.D., was often asked when he served as the 2013 Chairman of the Board of ASQ, a global organization dedicated to quality. Although incremental improvement is still necessary, it isn’t sufficient to get businesses where they want to be. Dr. Timmerman, a recognized thought leader on quality and a Gallup senior strategist for customer experience and innovation, says that quality is more relevant than ever.

Decades ago, companies had total quality management (TQM) and Six Sigma programs. Congress gave birth to the Malcolm Baldrige National Quality Award. And MBA programs started teaching quality principles. Quality (that is, zero defects) was essential to running companies more effectively and competing with global rivals. But is TQM still necessary? Or has it been mastered, and we’ve all moved on?

Today’s senior leaders are concerned about the speed of innovation. In the past, a hallmark of quality was a steady cadence of continuous improvement. Incremental improvement is still necessary, but it isn’t sufficient to get businesses where they want to be, given the speed of change required for most organizations to stay competitive. The next domain of quality will be innovation because market dominance now requires fast and transformational change.



Top Ten Strategic Technology Trends for 2014

Gartner, Inc. has identified the top ten technologies and trends that will be strategic for most organizations in 2014.  A strategic technology is one with the potential for significant impact on the enterprise in the next three years.

Mobile Device Diversity and Management: Through 2018, the growing variety of devices, computing styles, user contexts, and interaction paradigms will make “everything everywhere” strategies unachievable. The unexpected consequence of bring your own device (BYOD) programs is a doubling or even tripling of the size of the mobile workforce.

Mobile Apps and Applications: Improved JavaScript performance will begin to push HTML5 and the browser as a mainstream enterprise application development environment. Apps will continue to grow while applications will begin to shrink. Apps are smaller, and more targeted, while a larger application is more comprehensive.

The Internet of Everything: The Internet is expanding beyond PCs and mobile devices into enterprise assets such as field equipment and consumer items such as cars and televisions. The problem is that most enterprises and technology vendors have yet to explore the possibilities of an expanded internet and are not operationally or organizationally ready.

Hybrid Cloud and IT as Service Broker: Bringing together personal clouds and external private cloud services is an imperative. Enterprises should design private cloud services with a hybrid future in mind and make sure future integration/interoperability is possible.

Cloud/Client Architecture: Cloud/client computing models are shifting. In the cloud/client architecture, the client is a rich application running on an Internet-connected device, and the server is a set of application services hosted in an increasingly elastically scalable cloud computing platform.

The Era of Personal Cloud: The personal cloud era will mark a power shift away from devices toward services. In this new world, the specifics of devices will become less important for the organization to worry about, although the devices will still be necessary. Users will use a collection of devices, with the PC remaining one of many options, but no one device will be the primary hub. Rather, the personal cloud will take on that role. Access to the cloud and the content stored or shared from the cloud will be managed and secured, rather than solely focusing on the device itself.

Software Defined Anything: Software-defined anything (SDx) is a collective term that encapsulates the growing market momentum for improved standards for infrastructure programmability and data center interoperability driven by automation inherent to cloud computing, DevOps and fast infrastructure provisioning. As individual SDx technology silos evolve and consortiums arise, look for emerging standards and bridging capabilities to benefit portfolios, but challenge individual technology suppliers to demonstrate their commitment to true interoperability standards within their specific domains.

Web-Scale IT: Web-scale IT is a pattern of global-class computing that delivers the capabilities of large cloud service providers within an enterprise IT setting by rethinking positions across several dimensions. Large cloud services providers such as Amazon, Google, Facebook, etc., are re-inventing the way in which IT services can be delivered.  Their capabilities go beyond scale in terms of sheer size to also include scale as it pertains to speed and agility. If enterprises want to keep pace, then they need to emulate the architectures, processes, and practices of these exemplary cloud providers. Gartner calls the combination of all of these elements Web-scale IT. Web-scale IT looks to change the IT value chain in a systemic fashion.

Smart Machines: Through 2020, the smart machine era will blossom with a proliferation of contextually aware, intelligent personal assistants, smart advisors (such as IBM Watson), advanced global industrial systems, and public availability of early examples of autonomous vehicles. New systems that begin to fulfill some of the earliest visions for what information technologies might accomplish — doing what we thought only people could do and machines could not — are now finally emerging. Gartner expects individuals will invest in, control, and use their own smart machines to become more successful.

3-D Printing: Worldwide shipments of 3D printers are expected to grow 75 percent in 2014 followed by a near doubling of unit shipments in 2015. While very expensive “additive manufacturing” devices have been around for 20 years, the market for devices ranging from $50,000 to $500, and with commensurate material and build capabilities, is nascent yet growing rapidly. The consumer market hype has made organizations aware of the fact 3D printing is a real, viable and cost-effective means to reduce costs through improved designs, streamlined prototyping and short-run manufacturing.



Manufacturing: Solid Performance in 2014 and 2015

According to The Manufacturers Alliance for Productivity and Innovation (MAPI), the financial performance of the manufacturing sector as a whole has been quite good in recent years, although it is important to keep in mind that this performance has varied across industries and individual companies.

The overall sector’s improvement is not surprising given the economic recovery from the Great Recession. What is unexpected, however, is the continuing solid financial performance over the past year as manufacturing activity grew at a relatively slow pace. If, as MAPI forecasts, manufacturing activity grows at a faster rate in 2014 and 2015, the solid financial performance should continue.



Made in America

The big story of 2014, and beyond, may well prove to be the very same big story as in 2013. Research Analysts at RVW Investing LLC, a Los Angeles-based wealth-management firm, point to what they call the American Manufacturing Renaissance as one of the key reasons to be bullish going forward. “Made in the USA” has come back slowly but steadily.

Due to a combination of structural advantages and timely macroeconomic developments, the U.S. has recovered faster and now is growing faster than other developed countries. For perspective, consider that the U.S. counts for roughly 5% of the world’s population, but its Gross Domestic Product represents roughly 22% of the world’s GDP. Add to that the fact that the U.S. stock market represents nearly half of the world’s stock market value.

RVW analysts report that the key drivers of this current growth are low energy costs, a culture of innovation and entrepreneurial spirit, as well as a growing and well-educated population:

The historical worry that America’s voracious energy demands pose economic risks that limit growth has never been less true. In the next few years, the U.S. is expected to surpass Saudi Arabia as the world’s top oil producer. As a result, U.S. energy costs are often a fraction of its competitors, allowing the U.S. to become the lowest cost producer for many products.

Major U.S. companies remain the most recognizable and desirable brands in the world. The top nine most valuable global brands are U.S.-based companies. Apple and Google dominate their fields and are respected technology leaders.

While many countries’ populations are contracting, the United States is still relatively young and growing, largely thanks to immigration. The world’s top students continue to flock to America’s universities, and people from around the world seek to come to the U.S. because they see an opportunity to improve the lives of their families.



Engineering Job Outlook for the Class of 2014

Employers focused on hiring new college graduates are optimistic about the job market for Class of 2014 grads. Overall, they expect to hire 7.8 percent more Class of 2014 graduates for their U.S. operations than they hired from the Class of 2013.

Employers are most interested in bachelor’s degree graduates in the business, engineering, computer/information science, sciences, and communications disciplines. The top engineering majors: Mechanical Engineering, Electrical Engineering, Computer Engineering, and Chemical Engineering. The top industries seeking engineering graduates: Motor Vehicle Manufacturing, Miscellaneous Manufacturing, and Chemical (Pharmaceutical) Manufacturing.



Big Opportunities for Small Business Manufacturing in 2014

The world of manufacturing appears to be expanding in the United States during this slow and cautious upswing in the economy. What is new and most intriguing is that the growth is in areas of small business. Even though the U.S. economy as a whole isn’t making tremendous strides in growth, entrepreneurs in the area of manufacturing are beginning to blossom into a very positive force in the marketplace.

Small and medium-size businesses account for more than one-third of all U.S. exports by dollar value. No longer are the large manufacturing giants leading manufacturing growth in the U.S.; they have been outpaced by the innovative and entrepreneurial spirit of small businesses.

Small manufacturing companies appear to have four key factors that play a role in their ability to grow in current economic times. First, there is no doubt that they are deploying the strategic use of technology to support new ideas and entrepreneurial thinking. Second, one of the things that small companies have the ability to do best is develop personal relationships with customers and turn on a dime when one has a very special need.

Third, small companies can adapt to serve the specific needs of clients and become ongoing value-added partners because of their flexibility and entrepreneurial drive. Fourth, and most important, when you combine the previous three factors it opens the door to innovative product development with what a customer needs and when the client needs it.

For those small manufacturers that have grown their business and seen success, now may be the time for them to take a look at opportunities in the government marketplace. If you follow the media, no doubt you have continuously heard about the drastic budget cuts in the federal government. What media members are not saying is that because the government’s buying power is still so great (maybe the greatest in the world), there is still a tremendous amount of opportunity for small businesses.



Multi-discipline Engineers, Team Players

Increasingly, an engineer’s womb-to-tomb responsibilities throughout product design, development, and manufacture involve more than one technology and/or working with more than one function.

For example, an engineer may be a “multi-discipline” engineer, having expertise in two or more technologies: mechanical, electronic, fluid power, fastening, and materials.

An engineer may also work with a team from Design, Manufacturing, Quality Control, Testing, Marketing, Sales, Purchasing, and Customer Service.

Engineers and purchasing professionals are complex individuals who demand precision and excellence in themselves and their work. They need to know about technology, methods, components, products, and suppliers. They are involved in every part of the buying process, from intent to action.

A scenario –start to finish:

Whether it is the cars we drive, the planes we fly in, the electronics we depend on, and the medical devices that extend our lives, design engineers and purchasing professionals touch just about every part of the process. Take the drone, for example. The electronics (main board, battery, etc.) were researched and specified by an electronics engineer. The motors, rotors, stabilizer bars, etc., by a mechanical engineer. The microwaves professional was responsible for the communication and WiFi module, while the cameras and other components were searched and sourced to make sure they come from authorized distributors.

The Engineer’s Role in Component Procurement

For decades, buyers of industrial-machinery components focused mainly on price. Today, procurement patterns are gravitating toward best value and total cost of ownership (TCO). Yet even as this enlightened trend evolves, design engineers are actively influencing procurement decisions to ensure that price doesn’t trump performance and brand reputation.

As resource-constrained as they are in today’s lean environment, design engineers can visit customers to see how their equipment is used on a daily basis. Engineers also consider factors such as machine maintainability, MTBF, and environmental conditions and operator concerns. With a better understanding of their customer’s needs, engineers are making more-informed design decisions and influencing optimal procurement choices.


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