Manufacturing is coming home, but to do so, it needs to undergo a profound and transformative shift. We think of it as an evolution based on the fusing together of physical and digital worlds.
Historical production meets the digital age
Bluntly, the demand on physical industries now outweighs the capability of the infrastructure upon which they were built. They must harness the power of digitization and the opportunities provided by data and AI to redefine their approach across their markets and sectors.
Historically, manufacturing prioritized achieving high throughput and operational efficiency within environments that delivered minimal variability. Traditional legacy systems emphasized consistency, predictability, and scalability, optimized for high-volume, standardized production lines. While highly efficient, this methodology struggles with flexibility, it is at odds with a modern world geared around rapid adaptation to shifting market demands, ever-evolving consumer preferences, rising expectations for personalized products, and unexpected disruptions within global supply chains.
To navigate these challenges, manufacturers are turning towards innovative technological solutions including the Industrial Internet of Things (IIoT), Big Data analytics, Artificial Intelligence (AI), Cloud Computing, Autonomous Robotics, and Digital Twin technologies. These advanced tools create a unified, interconnected manufacturing environment, effectively merging digital data insights with physical production operations. To improve hardware quality and delivery, factories must automate to collaborate; use the power of data to predict problems; and provide real-time insights on the factory floor.
The new home market manufacturing model
Geopolitical factors, global trade tensions, and disruptions in worldwide supply chains are catalysing the regionalization of manufacturing activities. This strategic realignment has manifested in substantial capital investments, evidenced by over $196 billion committed to constructing new factories within the United States, alongside over 500 advanced production plants springing up throughout Europe. Such regionalization not only enhances supply chain stability but also fuels the accelerated adoption of digital factory solutions.
At the macro-economic level, a return of manufacturing to European and North American markets is unlikely to reverse the long-term decline in manufacturing jobs as a % of total employment – generally dropping by around 5% over the last 20 years across markets. Where growth should return is in manufacturing value add per capita. German and Japan lead the way in demonstrating that lean methodologies and strong automation can deliver $7-8k per capital in value add (~2x that of the United Kingdom). Those trends are also a reflection of the persistent shortage of skilled labour—exacerbated by a rapidly aging manufacturing workforce. Labour constraints will likely continue to serve as a forcing agent for the adoption of automation and sophisticated digital solutions within manufacturing processes.
The tangible benefits derived from the successful adoption of new digital factory practices are substantial. Manufacturers embracing these advanced technologies have reported significant productivity enhancements, substantial quality improvements, heightened agility in new product introductions, and streamlined regulatory compliance processes. For instance, companies such as Trane successfully achieved a 70% reduction in warranty costs (Trane case study). Similarly, Bayer experienced a 10% lift in production capacity (Bayer case study), while Moria successfully tripled its pace of product development through enhanced regulatory compliance processes (Moria case study).
At Farview our view is that the greatest gains from manufacturing technology adoption will come from when it is twinned with deep vertical market specialism. Sectors such as pharmaceuticals and chemicals have complex and stringent regulatory obligations demanding high levels of assurance, automotive and aerospace have extended supply chains and huge parts catalogues that need meticulous orchestration, whilst specialist manufactures need high levels of precision tooling to deliver extensive variant requirements. Solving for the specialised needs of these environments will create very sticky and valuable solutions.
Architectural framework of the modern factory
Unremarkably, the architectural framework of the modern factory is closely mirrored to the well understood process flow that runs from product design through procurement and supply chain, into the factory environment and then on to the end-customer. The innovative thread stems from the ability to link these process elements ever-more precisely and build holistic data flows around areas that historically existed only in offline silos.
The proliferation and ease of deploying IoT devices on to the shop-floor is perhaps the most obvious example driving the creation of new connected data sets. At Farview we see this as a fundamental catalyst to enable the deeper connection of long-established ERP environments with underlying production processes. Architectures built around IoT gateways and API connections mean that connecting modern applications within the shop-floor is easier and breaks a historic approach of hardware and software being entwined in proprietary, closed loop systems. We envisage a world where best of breed solutions will be able to mesh together with relative ease and reduce the cost of deployment significantly from legacy suite environments that require wholesale integration across hardware, robotic and software environments. In much the same way that MACH architectures (Micro-services, API first, Cloud native, Headless) have proven highly disruptive within complex technology eco-systems such as e-commerce, we feel the same trend will prevail within the industrial manufacturing landscape, bringing modularity, flexibility, speed of deployment and most importantly lower time to value.
Within this architectural paradigm, we see particular benefit for the application segments that sit around what we frame as the “Manufacturing Core”, being those applications which create the nerve-centre of throughput across the production environment sitting between ERP systems above and the realm of IoT connected devices monitoring the shop-floor. We see the Manufacturing Core as being an integrated (through deep APIs) manufacturing execution systems (MES), robust quality management systems (QMS), and comprehensive connected factory data environment. These three elements have the ability to deliver real-time insights, significantly enhance regulatory and quality compliance, and enable advanced predictive maintenance strategies. Consequently, manufacturers are empowered to drastically reduce equipment downtime and proactively manage operations through informed, data-driven decision-making.
Beyond the domain of the manufacturing environment itself, we are acutely aware of the impact that upstream inputs have on shop-floor throughput. Deeper connectivity into the supply chain and ultimately into product data and even design tools are becoming vital in processes that have huge variations across underlying product types and ever-greater volatility through supply chains. Those fundamentals make us very interested in applications that can deliver greater supply-chain visibility through deeper connectors, as well as provide deeper digital specification around product variations. We see both of these elements as having the capacity to bring meaningful upstream visibility to support the demands of complex design and procurement.
The future of manufacturing?
Looking forward, manufacturers poised for sustained success will distinguish themselves by seamlessly integrating sophisticated digital ecosystems, fully harnessing the potential of AI-driven predictive analytics and digital twin simulations, and deploying flexible, scalable cloud-based solutions across multiple production sites. Future industry leaders will proactively anticipate disruptions rather than merely reacting, leveraging advanced analytics and predictive systems to dynamically optimize operational workflows in real-time.
Ultimately, the Industrial Evolution is far more than a technological advancement—it represents a critical strategic imperative. Manufacturers embracing this transformative shift stand to gain considerable competitive advantages, securing long-term innovation, agility, and sustained growth within increasingly complex and dynamic marketplaces. Farview is very keen to play a small part in this change by working with leading technology providers who embrace it.