January 2, 2023
By: Isabell Bücher
Top trends for process manufacturing in 2023
The last few years have seen enormous changes across the process manufacturing industry, with digital transformation bringing new solutions as well as emerging challenges. As we enter 2023, after a year of growing economic turbulence, rising energy costs, changing political landscapes, and ongoing supply chain shocks, the only thing we can be certain about is uncertainty.
But despite the lack of clarity and rapidly fluctuating circumstances, some trends have emerged strongly as leading issues that are likely to shape the process manufacturing industry throughout the next year and beyond.
Investment in IIoT (still) won’t slow down
As amazing as it may seem, investment in IIoT is set to still be a top trend for 2023, after many years of investment and interest, because the value that IIoT delivers is still rising and organizations are still seeing the benefits.
The value of IIoT for manufacturing is predicted to reach up to $399.08 billion by 2026 at a CAGR of 14.5%, so such investment is likely to continue strongly in 2023. Forrestor predicts that plants will keep finding new use cases for IIoT, such as applying them to bring energy use under control.
Predictive analytics will keep moving forwards
During COVID-19 shutdowns, predictive analytics applications like predictive maintenance and predictive monitoring proved their value through early alerts about impending part failure, bottlenecks, or drops in quality, and monitoring tank levels and operations to warn about risks of leaks and hazards.
But adoption rates are showing no signs of slowing. On the contrary, process manufacturing organizations are seeking more powerful analytics that can deliver more accurate, speedy, and reliable answers to their queries and increase visibility and optimization for operations. As we enter a time of economic uncertainty, with many experts predicting inflation and recession, manufacturing companies need better forecasting so they can respond to fluctuations in markets and customer demands.
By 2030, the global predictive maintenance market is projected to be worth over $67.21 billion, up significantly from its 2022 value of $8.31 billion. Cloud-based predictive maintenance is expected to dominate the market in 2023, matching the rising trend of cloud computing adoption.
5G connections will multiply
As process manufacturing companies see the value of rich predictive analytics insights and real-time reporting, they’ll increasingly implement 5G networks that enable fast data sharing and massive dataset transferral, which in turn underpins more accurate predictive analytics. McKinsey analysts predict a sharp rise in 5G IoT sales from 2023, with units sold reaching over 22 million by 2030.
The migration to the cloud will gather pace
Like IIoT, cloud computing in manufacturing isn’t a new trend for 2023, but it’s one that can’t be ignored. Manufacturing companies are slowly but steadily shifting every corner of their software ecosystem to the cloud, including cloud-based analytics platforms, cloud-based ERP, and cloud-based Manufacturing Execution Systems. Investment in cloud MES software alone is forecast to reach $5.4 billion by 2031.
Cloud migration is driven by a number of interlocking factors, including the need to support remote work for plant employees, the decreasing price of cloud systems, the growing ease of use, flexibility, and scalability of SaaS cloud tools, and advanced features provided by modern cloud-based architecture.
The gap between digital leaders and laggards will widen
Although the pandemic massively accelerated digital transformation across the process manufacturing industry, the rate of adoption wasn’t consistent, and early gaps are likely to widen further throughout 2023.
So far, many plants have only adopted individual solutions, primarily supply chain analytics, predictive analytics, and on-demand manufacturing platforms. Meanwhile, digital leaders have laid the foundations of extensive IIoT networks, 5G and edge computing connections, cloud solutions, and big data repositories, which enable more advanced digital solutions.
Next year, we can expect to see increased adoption of complex digital systems like digital twins, connected factories, and smart manufacturing, together with burgeoning implementation of cutting-edge tools like digital thread, mass customization, digital lean solutions, and digital supply networks.
Smart manufacturing will increase
Although different plants are progressing at very different speeds, smart manufacturing is predicted to continue as a strong trend across the board in 2023. ResearchAndMarkets forecasts that the smart manufacturing market will reach $228.2 billion by 2027, growing at a CAGR of 18.5% from $88.7 billion in 2021.
This includes a number of more advanced digital technologies such as digital twins, AI-powered analytics and autonomous operations, immersive reality tools like digital glasses, and more. Digital twins stands out as one of the leading smart technologies, predicted to grow at a CAGR of 68.9% between 2022 and 2027, reaching an estimated value of $43,614.8 million.
Manufacturing will lead us into the Metaverse
Mixed reality and the metaverse will ride the wave of smart manufacturing adoption next year. Forrester predicts that the Metaverse will emerge in manufacturing first, because it already has strong use cases which will become even clearer in 2023.
Deloitte reports that one in five manufacturers is already experimenting with underlying solutions or actively developing a metaverse platform. For example, it’s no longer strange to find plant engineers using augmented reality (AR) glasses to carry out complex repairs through digital twins, or to collaborate with other team members on a challenging issue.
Cybersecurity will remain a leading anxiety
Cybersecurity was one of the top concerns for manufacturing corporations in 2022, and that’s only likely to grow stronger in 2023. According to PwC, 49% of manufacturers cite cybersecurity as one of their biggest challenges over the next two years. Search volumes for “manufacturing cybersecurity” have increased 300% in the past 5 years, and the trend isn’t going away.
As plants and factories become increasingly connected, they also grow increasingly vulnerable to cyberattacks. Russia’s invasion of Ukraine and subsequent targeting of manufacturing plants stoked fears of cyberwarfare, while IT experts warn that manufacturing plants are particularly attractive to opportunistic hackers because of their low tolerance for downtime.
For manufacturers, cybersecurity in 2023 means more than just defenses against hackers and cyberthieves. It also encompasses resilience in the event of attacks, strategic plans for dealing with hacked records and ransomware demands, and backup tactics to keep operations running in the event of partial disruptions.
Supply chain challenges will continue
Unfortunately, supply chain fractures aren’t going away. Deloitte reports that 72% of manufacturing executives expect them to continue as their biggest uncertainty in 2023. In response to ongoing supply chain issues, plants are implementing a range of solutions.
Many companies are reclaiming control over logistics by bringing it in-house instead of outsourcing to third parties. Most are reviewing supplier contracts, seeking new options, and/or building redundancy into the supply chain. Another way to shorten the supply chain and reduce the number of vulnerable chokepoints is by onshoring or nearshoring, and/or forging more direct relationships with suppliers rather than going through intermediaries.
It’s not just upstream suppliers who are receiving an overhaul. We’re seeing more manufacturers shift from a multi-tiered channel sales model to direct-to-consumer sales, to eliminate the middleman of distributors and/or marketers, strengthen relationships with customers, and simplify the supply chain. Although large corporations have taken this step so far, 2023 could see midsized organizations follow suit.
The robots will come marching in
In the new post-covid business universe, automation is spreading rapidly. Manufacturing companies are recognizing that they can reap dividends from automation and robotics, in the form of increased efficiency, lower costs, fewer errors, higher product quality, and more productivity.
According to Deloitte, 62% of manufacturers plan to focus on robotics and automation over the next 12 months, making it their top concern, and the global process automation and instrumentation market is estimated to grow from $58.6 billion in 2020 to $91 billion in 2027.
2023’s rush to automation is predicated upon the last couple of years of digital transformation and adoption of vital underlying technologies, including IIoT, AI analytics, big data, and fast 5G and cloud connectivity.
Manufacturers will address the labor challenge head-on
Finding ways to improve talent acquisition and retention is another “old” trend that’s likely to continue strongly throughout 2023. Hitachi cites it as the top trend for 2023, and Deloitte reports that one-third of manufacturing executives see it as their top priority next year.
Manufacturing companies are expected to adopt a number of tactics to deal with labor issues, including improving working conditions, enabling flexible and remote work, raising wages, upskilling and reskilling employees, and increasing diversity in hiring. 13% of participants in Deloitte’s survey said that reskilling is a key focus, and search volumes for diversity in hiring in manufacturing have grown 190% in the past 5 years.
Diversity, equality, and inclusion (DE&I) efforts dovetail with the drive towards increased environmental, social, and governance (ESG) in manufacturing. The Manufacturing Institute says that DE&I is crucial for 64% of its manufacturers.
ESG will remain a leading concern
Environmental, social, and governance (ESG) in manufacturing is set to continue to be top of mind for manufacturing organizations next year. It’s clear from social media chatter, newspaper headlines, brand boycotts, and in-person protests that consumers aren’t going to drop their concerns for sustainability, social justice, and general ESG good practices, so manufacturing companies will continue their efforts.
PWC observes that digitally-enabled sustainability solutions have already been growing more important. Digital tools like predictive maintenance help advance sustainability by generating early warnings about potential failures that could lead to environmentally-damaging leaks, emissions, flares, and other hazards.
In parallel with these solutions, manufacturers are also acting with more transparency and voluntarily making more public disclosures about safety practices and process operations, as well as committing themselves to more DE&I initiatives, as mentioned above.
2023 could be a year of change
As we move into 2023, process manufacturers face a number of challenges, including cybersecurity, labor shortages, ESG demands, uncertain economic circumstances, and increased competition from more digitally advanced rivals. By pressing ahead with smart digital adoption, building upon the foundations they laid in the last few years, and taking bold steps to adopt new tech solutions, process manufacturing can advance strongly throughout 2023 and beyond.