Jabil Prepares for Manufacturing Shift to the 'Intelligent Factory'

Manufacturers will face in the next 5 years a period of the “most transformative, most disruptive” change in recent memory, Bill Muir, the chief operating officer of Jabil Inc., told attendees in a keynote address at the Best Plants Conference in Charlotte. This transformation will be fueled by massive changes in demographics, IT systems and factory automation.

Muir said manufacturers are experiencing two key challenges in the behavior of consumers. Mass customization presents manufacturers with the need to move from the old Henry Ford concept of “one size fits all” manufacturing to offer personalized products. At the same time, he said, consumers want instant gratification.

“Consumers want products to show up in hours, at worst in a day or two as opposed to a couple of weeks,” said Muir.

Muir said these changes are being driven in part by the increasing influence and buying power of millennials. In the United States, there are 76.6 million millennials, outnumbering their baby boomer parent’s generation by approximately a million.

These changes are causing manufacturers to seek increased visibility into their supply chains so that they can cope with demands for tighter production cycles, deliver high quality products that are growing smaller and more technically challenging, and do so at a competitive cost.

In a survey Jabil recently conducted with electronics manufacturers, 96% of approximately 300 executives said they see increased risk as a result of limited visibility into their supply chains, manifesting itself in issues such as long lead times and extra shipping time. Yet 70% of these executives said they have real-time visibility for less than half of their supply chain.

Extreme weather events only add to concerns about supply chain reliability. Manufacturers may be ill-prepared for such events, according to the data from the Jabil survey. Some 55% of the respondents said it would take a few days to sort through the impact of a weather catastrophe on their company, while 27% said it would take a few weeks.

These challenges are being felt keenly by Jabil, an $18 billion contract manufacturer and supplier of design and supply chain services for 250 leading brands around the world. Jabil has 90 factories, 17,000 suppliers and 700,000 SKUs. As Muir points out, Jabil has a “massively complex supply chain.”

“We continually ask ourselves, ‘What are the things we can be doing to take complexity out of that supply chain?’” Muir told Best Plants attendees. The company strives to focus on the “real constraints” it faces in its supply chain, he said, and not divert its attention to a myriad of other issues.

To aid in that effort, Jabil has developed a web-based, mobile supply chain management platform called InControl that provides the company and its customers with a high level of analytics and visualization in order to understand their supply chains and proactively identify potential risks.

Muir said customers can look at an InControl screen on a mobile device and determine “the top 10 or 15 part numbers I have to focus on so that my supply chain will be more resilient.”

The Factory of the Future

Jabil asked electronics executives what technologies they expect to most influence factories in the next few years. Muir said the most cited technology was advanced materials (54%). Over the last 20 years, he said, Jabil had built “a lot of rectangular printed circuit board assemblies that looked and felt the same.” But that’s no longer the case.

“At this point in time, the devices that all of us interact with, that we ship on a daily basis look radically different,” Muir said. They range from medical devices to smartphones and wearables to devices that must be able to resist severe environments. “Materials technology is becoming increasingly important to how they get integrated into products,” he said.

Predictive supply chain analytics was cited by 53% of the survey respondents as an impactful technology, while 52% pointed to advanced manufacturing automation.

Despite a growing movement to more automation, including technologies such as advanced robotics, 76% of the manufacturing executives who responded to Jabil’s survey said they expect the factory of the future to have people at the center of the operation. Only 17% said they expect factories to be lights-off, fully automated facilities with few or no people involved in production.

Muir said the survey findings reinforced the belief at Jabil that manufacturing will incorporate more automation, but that people and intellect will remain very important components of manufacturing. That should help manufacturing as a career continue on its current rebound.

“Manufacturing is becoming sexy again. Manufacturing is becoming interesting again,” Muir concluded. “There were a couple decades where folks were coached out of pursuing a career in manufacturing. Now it is becoming more prevalent and a more enticing career path.”

Four macro trends are impacting manufacturing, said Muir. Shifting demographics, such as the aging of China, are making the pursuit of low-cost manufacturing in Asia less attractive. Personalization is also affecting manufacturing as consumers look for products that “look and feel the way they want,” Muir said. A “massively aggressive shift to miniaturization” is occurring, he noted, with products becoming smaller and the technologies integrated in them becoming more complex. Sustainability will also be a continuing priority for manufacturers, Muir noted.

All these societal and technological trends, said Muir, are leading manufacturing from its old emphasis on standardization and repeatability in largely isolated production facilities to a connected “intelligent factory.” Such an “integrated ecosystem,” Muir explained, pulls in information from consumers and a more transparent supply chain and connects this flow of information to advanced machinery and more empowered workers with mobile access to data and analytics. As this evolution continues, Muir said, manufacturing will likely move away from large production campuses and toward a more distributed model. Driving this change, he said, will be digital manufacturing.

“It starts with the accuracy, the reliability, the completeness of data that cuts across the entire value chain that feeds into a manufacturing process,” he told Best Plants attendees.