“Digitalize or Die” – Predicting the Future of Canadian Manufacturing

I was honoured to be the keynote speaker this month at an event at the University of Ontario Institute of Technology. The theme for the day was “The Future of Advanced Manufacturing”.

I was asked to predict what Canadian manufacturing would look like in 2025. While that sounds like a daunting task, I believe it’s possible to make some accurate forecasts.

First, in 2025, Canadian manufacturing will be very different from today.

That’s because everything has changed, is changing, and will continue to change at an unprecedented pace. We can adapt, innovate, accept change as a way of life – or our manufacturing sector will be dead and gone. As manufacturers, we need to adopt the motto, “Digitalize, or die.”

We have entered an exciting, world-wide, fourth industrial revolution, often referred to as “Industry 4.0″. It represents a shift from a labour-intensive focus to a process based on advanced technology. This paradigm shift of digital transformation is well underway, and it is radically changing value chains and creating almost unlimited potential.

In Europe, there has been tremendous buy-in of this trend. In Germany, for example, four out of five industrial companies plan to digitize their complete value chain over the next five years.

This transition is essential because digitalization has become a decisive lever for growth in virtually every sector of industry.

Adopting digital technology solutions is the only means to real efficiency, through optimizing and networking systems along the entire product and production life cycle.

Companies that embrace digitalization will be able to develop and manufacture products and solutions quickly, efficiently and with more opportunity for mass customization. This creates an enormous competitive advantage.

Ten years from now, digitalization will drive everything. In fact, the current rebound in manufacturing is fueled primarily by early adapters of technological change through digitalization.

A recent German study found that 70% of all companies with highly digitized products have enjoyed growth of between six and 10 per cent over the past three years.

Digitalization will create totally different technical platforms and opportunities to innovate new products, services, and business models.

There will be an emphasis on intellectual property, not on hardware, which will change the dynamics of manufacturing.

There will be new players, and new alliances, and these may change very rapidly, as circumstances dictate.

Is this the future? Certainly. But it is also the present.

As I meet and talk with Siemens’ leaders from around the world, one theme constantly rises to the top. Digitalization is on everyone’s mind.

The industrial world is changing at an enormous pace. The industry leaders in the future will be the companies and organizations that adapt, innovate, collaborate, digitalize, emphasize sustainability – the companies that change, and start that transition now.

Looking ahead at 10 years from now, I see Canadian manufacturing as a strong, collaborative, innovative network, active and impactful right across the globe.

At Siemens Canada, we are taking a leading role in bringing stakeholders together to create an environment that will make possible this transformation of Canadian manufacturing in this digital age. Our goal? Ensuring Canada is a strong global competitor.

Digitalization is transforming our world

When Siemens global CEO Joe Kaeser spoke of digitalization at the Annual Shareholders’ Meeting 2015, and said, “We are getting our company ready for the future and the changes it holds,” I couldn’t help but reflect on the changes I have seen since I began my career at Siemens AG as a young electrical engineer in 1988.

Back then most of us had heard of computers, but few of us had any practical experience with them. Email existed, but was not in popular usage.

The changes to our world since then have been profound. Most significant of these has been a growing digitalization – the integration of digital technologies into everyday life and industry. Siemens has prepared for this digital transformation, positioning the company across the areas of electrification, automation and digitalization.

Last Wednesday I attended a product launch from our Digital Factory division and was pleased to be able to hear all the product presentations. I was impressed with our people, and afterwards, got great customer feedback. It’s a good example of how we are already bringing these products to the markets and our customers. By integrating the virtual world with the real one to meet the requirements of Industry 4.0, we are creating a sustainable competitive advantage for our customers.

The digital transformation will be on display globally in the next couple of weeks during the Hanover Messe in Germany, the world’s biggest industrial trade fair. Siemens, as one of the world’s largest technology companies, will be there, front and centre, and this includes some of our people from Canada.

The broad overview at the fair showing the latest future-defining manufacturing concepts, systems and IT solutions, is unmatched by any other trade fair. In short, it’s our chance to show what we can do in areas such as the digital factory.

With our comprehensive portfolio of automation technology, industrial switchgear, and industry software and services, Siemens is a trusted partner to customers in the manufacturing industry worldwide. The integration of products and production lifecycles along the value chain and the merger of the real and digital worlds are creating future-proof automation solutions from design and engineering to operation, production and service.

Digitalization gives us the opportunity to expand our leading market position by merging the virtual with the physical world. No other company is as well-positioned to do this, and to bring value to our customers, than Siemens. We can leverage our vertical know-how and customer access; one of our key competitive advantages is our in-depth industry expertise and the existing relationships we have with our customers. We have extensive knowledge of their systems and processes, not to mention a huge existing physical installed base.

We have played a pioneering role in the automation revolution that is transforming both advanced manufacturing and power generation, using technologies such as data analytics, the cloud and the Internet of Things to drive efficiency and reliability.

To thrive in a digitalization environment, speed is essential because the landscape is constantly changing. Digitalization gives us a golden opportunity to expand and further develop our core business but only when we keep an eye on our competitors and focus on the needs of our customers.