As we put 2021 behind us and look forward to a new year, the big news in both manufacturing and utilities is the ongoing COVID-19 pandemic and the changes it accelerated in both sectors. The ongoing shortage of skilled workers and increased health protocols in place in the wake of the pandemic has led enterprises to be even more efficient in how they use talent and expertise. While new ways of work in response to COVID-19 continued to make news in 2021, we predict that the key for 2022 is that the post-pandemic future will not be a return to 2019 in the utilities and manufacturing industries. Employers will need to embrace that the virus will continue to evolve and industries will have to adapt accordingly.
Despite the challenges, 2021 was a bright year for many economies. The manufacturing and utilities industries have been making strides with embracing digital transformation. Here is a look back at how the year has played out and what to look forward to in 2022 in the utilities and manufacturing industries. Many of the points mentioned here are equally applicable to both, but a few might be more specific to an individual sector.
The manufacturing industry has been one of the biggest testing grounds for digital transformation. The promise of digitalization is that automated and orchestrated processes will deliver a range of efficiencies and free workers to use their strengths. Industry 4.0, the pillar for smart manufacturing, continued to be the theme in 2021. Technologies like the Industrial Internet of Things (IIoT), artificial intelligence, and data analytics played a key role in predictive maintenance and in keeping things running on the production floor.
As we move into 2022, expect the next iteration of smart manufacturing to gain momentum. Called Industry 5.0, we will see a move toward maintaining the human as the center of factory operations. The human-machine collaboration will be the key ingredient in Industry 5.0. This movement will run on the increased use of collaborative robots in manufacturing. On the production floor, collaborative robots will work alongside employees. They can help in tasks like machining, welding, spray painting, buffing, and polishing, and more. The utilities industry will continue to see automation make the integration with the back office more seamless. Orchestration of tasks from one field service unit to another will continue to make work more efficient and improve productivity in both sectors.
Digital transformation is making manufacturing more agile and opening up new ways of doing business. The marketplace is seeing an increasing demand for custom manufacturing. This comes specifically from smaller players who might not want to spend money on high capital expenditures. Manufacturers will make room for new relationships with B2B customers. They will also “rent” their platforms and processes to meet this growing demand. We will need to keep an eye on the ability of manufacturers to juggle the complexities of the supply chain to meet these new demand chains. Both teams will need to configure who will be in charge of what operations beyond the four walls of the production floor.
In addition, technologies such as IoT will open up new value chains in generating valuable data for product design and development, and customer service. Data relayed from IoT sensors, for example, can tell when a washing machine is about to fail and customer service can proactively set up a service call. Manufacturers might be able to sell data as a new revenue stream as insights into customer use down the value stream will be valuable to many additional stakeholders.
B2C and B2B Verticals
Because of manufacturing’s improved agility, enterprises are finding new ways of reaching the customer directly through custom orders produced in small lots. The digital value supply chain means the customer—whether B2B or B2C—is at the center of all processes and there is increased transparency between all relevant stakeholders. 3D printing and additive manufacturing are part of this movement toward specialized manufacturing for specific customers. Expect to see a lot more momentum on these fronts in 2022.
Increased Push for Cybersecurity
New data sources from sensors in the field mean new attack surfaces for cybercriminals to target. The integration between operational technology (OT) in the field, whether that is in manufacturing or utilities, and information technology (IT) needs to be tight and withstand breaches. Cyber breaches can bring down entire energy grids. Cybersecurity is becoming an increasing problem as malicious software can attack the core of government operations. 2021 saw the cost of a breach increase by 10% from the previous year. The utilities industry ranked fifth highest in the financial toll it takes. The utilities industry will also have to make room for new regulations that address cybersecurity protocols.
Utilities Industry-Specific Movements
Decarbonization and sustainability were huge pushes in 2021 and will continue to dominate how the industry moves forward in 2022. New ways of harnessing and delivering alternative sources of energy will remain in the spotlight. Meeting regional decarbonization goals while upgrading legacy equipment will be one of the many challenges the industry will continue to face.
Utilities are also facing the direct impact of severe weather events around the world. Cybersecurity attacks are also testing the resilience of centralized grids. Continued improvements of resilience with microgrids will feature prominently in 2022 as the industry moves toward a decentralized operational model.
Digital transformation has been shown to be key in 2021, especially to deliver worker efficiencies and do more with less. Augmented reality applications through rugged mobile devices will continue to provide support to field technicians and plant floor workers everywhere. This is due to the industry looking to leverage its workforce efficiently. Despite the challenges brought by the COVID-19 pandemic, the manufacturing and utilities industries leaned on digitalization and advanced technologies to stay agile and productive. External factors such as an increased push for sustainability and cyberattacks will reshape the industries yet again in 2022. However, the agility lessons learned in 2021 will help them navigate the pandemic, other challenges, and stay ahead in the new year.