5 key technology trends that will shape manufacturing this year

Technology is set to become a game-changer for manufacturers in 2024, helping them overcome ongoing challenges. Despite a tough business landscape in recent years, many manufacturers are determined to continue their digital transformation journey this year. They are focusing on improving efficiency and building resilience by embracing smart factories, digitising supply chain, and harnessing the power of artificial intelligence (AI) to enhance operations. We explore some key technology trends that will shape the manufacturing industry in 2024. 

1. Smart factories transforming shop floors 

Smart factories utilise various technologies related to the fourth industrial revolution (Industry 4.0) to optimise smart manufacturing processes. While traditional supply chain and manufacturing ecosystems have been the backbone of companies for decades, the COVID-19 pandemic and other global challenges have exposed their vulnerabilities, prompting the need for a more agile solution. The global smart factory market is expected to reach a staggering $321.98 billion by 2032, growing at a CAGR of 9.52% from 2023 to 2032. Experts believe that companies embracing digital transformation and smart factory technology can reap significant business benefits, including improved product quality, increased efficiency, and sustainability.

Soumya Bhattacharya, Executive Vice President IoT, AI/ML, Data at Creative Synergies Group, states that by leveraging quality AI/ML, IoT, and other autonomous technologies, smart factories can optimise production lines, reduce downtime, minimise waste, and enhance operational efficiency. 

2. Artificial intelligence and virtual processes on the rise 

Technologies like digital twins, machine learning, AI, augmented and virtual reality (AR/VR) are revolutionising the manufacturing industry. They enable remote monitoring, servicing, and equipment operation, eliminating the need for on-site presence.  

Indranil Mitra, Managing Director & Leader, Advanced Analytics, PwC India, states that companies using AI and related technologies to harness enterprise data volumes are benefiting from business transformation enabled by effective decision making. 

Digital twin manufacturing, which involves creating a digital replica of a physical manufacturing process, is projected to reach a market value of $73.5 billion by 2027. Predictive maintenance, a key aspect of AI, is gaining prominence as it helps prevent costly downtime caused by inefficient maintenance. Predictive maintenance uses data analysis tools to identify potential equipment defects and prevent failures.  

The widespread adoption of AR and VR in manufacturing will further enhance operations across various manufacturers, providing real-time communication, advanced computing power, and virtual and remote operation. 

Read more: Driving the integration of digital reality and AI to enhance product experiences 

3. Reshoring and digital supply chains 

The ongoing war in Ukraine and economic challenges are causing major disruptions in the global supply chain. As a result, manufacturers are forced to adapt and make the best out of a difficult situation. This has led to a trend known as reshoring, where production is brought closer to home. Reshoring not only helps reduce transportation costs but also allows for better quality control. By having production closer to home, companies can closely oversee and maintain higher control over their production processes, ensuring a consistently high-quality product. For example, Apple has brought some of its manufacturing back to the United States to ensure the utmost quality of its products. Additionally, reshoring creates local jobs, boosting the local economy. Furthermore, more firms will invest in a digital supply chain, enabling real-time tracking of the complete supply chain, according to Jagdish Mitra, Chief Strategy Officer and Head of Growth at Tech Mahindra. 

Read more: By 2026 Indian firms to invest $2.3 bn to digitise supply and production facilities: Report 

4. Tech upskilling and reskilling in  focus 

Manufacturers are currently grappling with a tight labor market and high turnover rates as they navigate the ever-changing talent landscape. A September 2023 report from Deloitte and the Manufacturing Institute estimates that by 2030, approximately 2.1 million manufacturing jobs could go unfilled, resulting in a staggering $1 trillion loss in that year alone. This trend is further exacerbated by voluntary separations outnumbering layoffs, indicating significant workforce churn. As a result, the ongoing shortage of workers is negatively impacting operational efficiency and margins, compounded by limitations in the supply chain.  

While increasing salaries for specific roles such as robotics, connected technologies, and cybersecurity will be observed, manufacturers are more likely to prioritise reskilling initiatives that may involve implementing continuous training programs to enhance employees' skills, partnering with startups to access new technology and talent, and collaborating with academic institutions to tap into digital expertise. The Deloitte report also highlights that 75% of manufacturing respondents identified retaining existing talent as a major challenge, indicating that it will continue to be a top priority in 2024. 

5. A stronger move towards sustainability 

According to the World Economic Forum, one-fifth of the world's carbon emissions come from the manufacturing and production sectors, consuming 54% of the world's energy sources. A number of Fortune Global 500 companies have committed to going carbon neutral, with one-fourth of them aiming to achieve carbon neutrality by 2030.  

Jainee Nathwani, Head CSR & Sustainability, United Breweries Ltd, states that this is largely driven by eco-conscious consumers demanding eco-friendly products and supporting companies with shared values. Manufacturers that go carbon neutral enhance their reputation as environmentally responsible organisations, leading to increased brand value, customer loyalty, cost savings, and operational efficiency.