It doesn’t take a multi-million dollar investment for a small or medium-sized manufacturer to accelerate results with smart technology and processes.

As quickly as major manufacturers have scaled up with robotic plants, machines that collaborate amongst themselves, and production that monitors itself, these same techniques are being scaled down for smaller operations.

Smart manufacturing can have huge implications for the U.S. economy. Some experts predict that it could trigger major shifts in the U.S. balance of trade. According to Boston Consulting Group, as many as 30 percent of products exported to the U.S. from China could be made domestically by 2020.

As many as 30% of products exported to the U.S. from China could be made domestically by 2020. Tweet This

“Thanks to plummeting prices, small companies have access to better, cheaper manufacturing equipment and design tools—giving even one-person startups the chance to create market-shaking innovations,” writes Wall Street Journal columnist John Koten. “Many people liken the era we’re in to the early days of computing, where upstart hobbyists in their garages came up with huge advances that changed the industry.”

Already, smart manufacturing is reversing the outflow of jobs to overseas plants. Results are already evident: the U.S. manufacturing sector has added more than 800,000 jobs this decade, reversing years of losses prior to 2010, and initiatives by the federal government have accelerated $140 million in private and public investment to advance the technology required to make smart manufacturing a reality.

From Plant Floor to Desktop

For small to medium sized manufacturers, ‘additive manufacturing’ — often better known as 3-D printing—is a low-cost opportunity to rethink processes, from design to production.

Unlike traditional manufacturing methods, 3-D printing carries no additional incremental costs, meaning it’s as inexpensive to produce a single copy of a product as thousands of copies.  As the technology has matured and become considerably less expensive, 3-D printing offers smaller manufacturers the ability to produce small and one-off products cost-effectively—and potentially, more profitably.

“Products like this tend to have a high content of technology, innovation, customized design and servicing,” explains Lisa De Propris in Business Insider. “Moreover, their consumers tend not to be as price sensitive, so technology, knowledge and innovation are the key elements which shape the competitiveness contest.”

While desktop 3-D printers have fallen under the $200 price level, commercial-grade printers have evolved to produce materials not just made of plastic, but also acrylics, stainless steel, food-safe ceramics, and silver.

But that’s just the beginning. Low-cost design software allows anyone to create models of products that could be produced by 3-D printers; this has opened new collaborations with customers. These  “co-creator platforms,” where products are designed collaboratively with customers, are an important element of the next stage of smart manufacturing.

The Next Revolution

Closer relationships with customers: that’s the biggest opportunity opening up thanks to smart manufacturing. “Collaborative manufacturing” relies on technology that networks the manufacturing facility with other suppliers and customers. Some observers have likened these advances to the “fourth industrial revolution,” following the Industrial Revolution, the advent of mass production, and electronics, robotics, and IT.

This shift can have profound implications for how manufacturers do business. The flexibility of 3-D printing and the ability to share information is transforming the supply chain from one that relied on faraway factories and long lead times to a more sophisticated, just-in-time process that focuses first on local manufacturers. That focus also emphasizes sustainability, with lower transportation costs and opportunities to reuse materials in the local markets where production is centered.

The Revolution Starts Here

While the transition to smart manufacturing requires investments in new production technology and systems that allow the exchange of information up and down the supply chain, companies don’t have to go it alone.

New forms of co-ops and shared operation platforms, like Shapeways, enable manufacturers to hire designers, resell products from a community of “makers,” or simply upload 3-D printing files for materials to be produced on demand anywhere in the world.

Not every product will ultimately be created using additive technology. Traditional manufacturing processes are here to stay—and are ripe for improvement, especially in efficiency and connectivity. For smaller manufacturers, the more significant investment involves next-generation production software that collects data about existing processes and better integrates them with others in the supply chain—capabilities today’s production systems typically don’t have.

“The ability for a small manufacturer to leverage any type of business intelligence from legacy systems has been extraordinarily limited,” explains Denise Swink, CEO of the Smart Manufacturing Leadership Coalition (SMLC). “These systems are generally not interoperable.”

Harnessing the promise of this new technology will require smaller businesses to enter new partnerships, including vendors that may market business intelligence software as a service. Growth will come by retooling current relationships and by designing new ways to collaborate.

Photo Credit: Leonevondizic, Twenty20