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Market trends and business perspectives

Foundational insights: Exclusive interview with Deloitte’s manufacturing leader

Some sectors of technology change so fast it can be bewildering for people whose jobs and livelihoods depend on keeping up with new innovations and developments which can mean the difference between profit and loss, success and failure. 

Traditionally, larger companies have been wary of the threat of smaller, more nimble and more flexible competitors launching more innovative products and services faster and at a lower price point and taking away their market share.

It doesn’t always happen, but it does sometimes. Corporate history is littered with many stories of successful companies which went from being the dominant market leader to being an also-ran, or worse. 

Mentioning examples would probably be unfair on the companies concerned, since this article will not be examining them in detail and go into mitigating circumstances for any failures they may have had, but every reader might have their own example of a company which failed to spot an important trend and so did nothing about it and ended up losing big time.

Spotting important trends and, more importantly, existential threats, is what companies like Deloitte get paid so much money to do. And advising clients on corrective or constructive action is what keeps the company, and the companies they work with, in the money.

With annual revenue of almost $40 billion in fiscal year 2017, Deloitte is probably the world’s largest business management consultancy.

It mostly advises giant multinational conglomerates on how they can either re-engineer their business to keep up with market trends or consolidate their successes if they’re on the right trajectories.

And those aren’t easy things to do if your operations span the globe and you employ hundreds of thousands of people.

Michelle Rodriguez, manufacturing leader, Deloitte
Michelle Rodriguez, manufacturing leader, Deloitte

How to…

Michelle Drew Rodriguez is manufacturing leader at Deloitte’s Centre for Industry Insights. Her background as a mechanical engineer and experience in automotive design and development would seem quite crucial at a time when electric vehicles and autonomous driving technology are transforming the way people view and use cars and many other types of road-going vehicles.

Rodriguez received a BSc in mechanical engineering from the University of Wisconsin and an MBA from the University of Michigan, specialising in corporate strategy.

Her time at Deloitte so far has seen her establish the Center for Industry Insights, and work with national and local governments, a wide variety of companies, and industry associations, as well as with international business organisations.

In this exclusive interview, Rodriguez explains what she does and how it can help the manufacturing sector at a time of many tumultuous changes and trends.

“Essentially, what we do at the Center is we take a look ahead at industry trends that are affecting so many of our clients and really focus on key issues, key megatrends, that we believe are going to be transforming the industry at large,” says Rodriguez.

“So I work with a number of industry associations. These are organisations like the NAM [National Association of Manufacturing], here in the US, which is the largest manufacturing industry association, as well as the Manufacturing Institute, NAM’s sister organisation, which focuses on skills and workforce development.

“We also conduct research with the World Economic Forum, within a forum on competitiveness, and Mapi [Manufacturers Alliance for Productivity and Innovation], an organisation which focuses on manufacturing productivity and innovation, as well as globally, for Deloitte’s part in the Singularity University, which concentrates on technology transformation all across industry.

“So, essentially, I lead the research agenda for the manufacturing industry at large for Deloitte, and work with a lot of our national sector leadership on the strategy and how we can be more impactful and provide value to our clients who are going through so many of these transitions.”

Top trends


There are so many concurrent trends at any one time in any business or market that, one imagines, it’s difficult to decide what to spend time dealing with.

While this article obviously can’t provide specific answers to particular businesses – since each situation will be different – it’s worth asking Rodriguez what she thinks the most important trends are, broadly speaking.

“That’s an interesting question,” she says. “Just to name a couple of the biggest – and obviously, there’s a number of others depending on what sector you look at – it just varies.

“But broadly speaking, the first thing, I would say, is technology transformation, whether you want to call it Industry 4.0 or something else – the convergence of the physical and the digital world that’s taking place in manufacturing, with the industrial internet of things.

“Everything’s smart, connected, and the product development cycles are decreasing, and the focus research and development and true innovation is increasing more now than ever to get to products of one that meet ever-increasing customer demands and needs.

“So, technology transformation, whatever you want to call that –  Industry 4.0, advanced manufacturing, advanced technology. I would bucket that in one category.

“And then, I’d say, talent. Talent is the critical driver for manufacturing competitiveness globally.

“There is study we conduct called the Global Manufacturing Competitiveness Index, where we have gathered input from over 500 global manufacturing executives, both on which countries are going to be most competitive moving forward from the manufacturing perspective, but also on what are the key drivers of global manufacturing competitiveness.

“Across all of the GMCI studies I’ve conducted, what’s consistent is that global manufacturing executives rank talent as the number-one competitiveness driver for manufacturing.

“When you think about all these critical transitions, whether it’s technology, or evolutions in their business models, and so on, at the end of the day, you need top talent in order to be competitive, in order to help with these transitions.

“So we really focus on talent in a number of ways when it comes to the manufacturing industry, and I really see the perception study as one way to influence the talent.”

By “perception study”, Rodriguez means the Deloitte research paper into the US public’s perception of the manufacturing industry, published recently, which found that while people generally felt that manufacturing was of critical importance to the economy of the US, they themselves would not want to work in it, and didn’t see it as a career choice.

This is obviously a concern for the US government, led by President Donald Trump, who has made it a priority to reinvigorate and expand the US manufacturing belt. How this is done is another question.

Trump has spoken directly to big American manufacturing companies such as Apple and General Motors, and even non-American companies, in an effort to persuade them to open factories and expand their manufacturing operations in the US.

But if the general public in the US is reluctant to work in those factories and manufacturing operations, there would obviously be a problem. This is what Rodriguez and others have been working with the government on.

“So how do we change and evolve the perception of the industry so that we can bring the best and the brightest into the manufacturing industry at large?” asks Rodriguez rhetorically.

“We do a number of studies around talent, the skills gap, the perception study, I even do a study around women and manufacturing, trying to get our fair share of top talent from different demographic pools as well.

“First and foremost the perception of the industry has such a big impact on not only attracting talent but also retaining them, and creating a vibrant industry that is a kind of beacon is a concern for every manufacturing executive that I chat with.”

Extra manufacturing perception

vr car design

Some people have outdated perceptions of manufacturing, or maybe everyone is labouring under misapprehensions about the sector.

Most of us who are outside the manufacturing sector probably imagine grease, machinery and workshops when we think of what it’s all about.

But that’s not really what it’s like any more, certainly not at the level  of Deloitte’s client base – the larger companies.

It’s true that many manufacturing companies are relatively small operations and would conform to some of the stereotypes, but the larger companies are far more high-tech than perhaps people might realise, using computer technology for pretty much everything – whether it’s monitoring and controlling the machines, or designing and developing new products.

And with the emergence of less expensive collaborative robots, as well as new automation and computer technologies, even the smaller companies can now create highly automated operations, with machines linked to the internet of things using sensors and networking devices.

A factory can now, quite literally, be managed through a smartphone app.

“I think manufacturing is more high-tech than ever, and will continue the trend of being increasingly high-tech, innovative, creative, very quick, and fast-paced.

“The pace of increasing technological sophistication is only going to continue.

“How, then, do we help influence and change what may be an outdated perception of what manufacturing is?

“And I think recommendation I really have is really around exposure – exposing the manufacturing industry to the public to show them what it’s really like.

“So, if you look at the findings of our perception study, you’ll see that the public’s current assessment or perception of the manufacturing industry versus what they think the future of manufacturing will look like – that is, there’s a much higher positive perception of manufacturing for the future.

“But the reality is that many elements of what they think is the future of manufacturing is actually what is going on today.

“It’s literally the transformation that’s under way and has been under way within manufacturing.

“So I think it’s really about manufacturing companies opening the doors, helping people see, first-hand.

“Also we see from our study is that those people who are familiar with manufacturing, those that actually work in the industry or have close friends or relatives that work in the industry, they’re twice as likely to recommended careers in manufacturing.

“So, once people are exposed and once people have a true understanding of what manufacturing really is, I think it goes a long way towards dispelling false perceptions or outdated perceptions that may exist.

“So I think programmes in the US are working towards that.

“We have a program here called Manufacturing Day. It started out the first Friday in October, when manufacturers across the nation open their doors, have tours for the general public.

“They invite school-age children as well as vocational and college students as well to really tour what a manufacturing facility is – everything from R&D and product development, engineering to industrial engineering and the shop floor – really opening the doors and raising awareness and providing exposure.

“So we work with NAM to pulse those participants that attend Manufacturing Day.

“And of the students that participate, our research has indicated that 64 per cent are motivated to pursue a career in manufacturing, 84 per cent are more convinced that manufacturing provides careers that are interesting and rewarding, and almost 90 per cent are more aware of manufacturing jobs in their communities.

“So it brings it to the local level as well as increasing the exposure.

“We think programs like that go a long way in getting more individuals familiar with manufacturing, and our study recognises that, once you’re more familiar with the industry, you’re more likely to pursue a career or recommend a career in the industry.”

Computer-oriented jobs

computer plane design

Many younger people may think of computer-oriented jobs when they think of choosing a career.

Tech giants like Apple, Google, Microsoft and others in what might be termed the “Silicon Valley set” are probably high on the list of companies graduates would like to work for, developing software probably.

But even those companies have some manufacturing aspect. Certainly Apple, with its desktop computers and mobile devices, is a huge manufacturing enterprise. Google, too, is hoping to emulate Apple’s success through recent investments in its Pixel smartphone operations.

And it doesn’t matter all that much to a worker where the actual manufacturing takes place. The job they will be doing is most likely at a desk, in front of a computer – much like any other job in that sense. That is the way manufacturing is going.

“The pace towards digitalisation is essentially exponential within the manufacturing industry,” says Rodriguez. “Every year, more and more is going from the physical to the digital.

“To give you an example, I’m a former mechanical engineer, I worked in product development for a major automotive OEM [original equipment manufacturer] in my life prior to Deloitte.

“And when I worked in designing vehicles and developing the product development lifecycle, we had the physical prototypes – we had clay models of automobiles, and then we would build different levels of prototypes as it would get closer to mass production.

“And there was definitely computer-aided design and computer-aided engineering a couple of decades ago, but now, the majority of all of the design, all of the analysis, finite element analysis, making sure of things from a manufacturing process perspective, the tolerances, fatigue testing, and so on – all of that is done virtually, and all of it is done through computer-aided analysis and design mechanisms.

“So now when you talk about the product development lifecycle, back a decade or two, it used to be anywhere from six to 15 years for an automobile.

“Now, it’s less than five.

“So, when you move to computer-enabled design and build and close the loop on the product development lifecycle, you see companies being able to rapidly change much more quickly, much later in the lifecycle, and being able to adapt to address the changing demands of consumers.

“We see that happening in the R&D, in the design, in the product development side, we see it on the shop floor, so all of the lines are now virtually established in program models, parts as well as products are tracked and traced throughout the useful life of the products and then fed back into the design process to make continuous improvements.

“In the past, if there was a part that was defective, it used to be a long-winded and manual, paper-intensive process of identifying and tracking – that’s all digital now.

“There’s so much data that transpires within all elements of manufacturing that enable us to make better decisions, quicker decisions, and adapt and respond much more quickly than ever before.

“So, I think exposure, learning how much more computer-oriented many different jobs in the manufacturing industry are, would help people make better-informed decisions.”

That said, Rodriguez acknowledges that, while some people might be reluctant to consider manufacturing as a career, there seems to be a deeply-held sense of accomplishment about “creating something physical” that drives many to tinker and make things in their spare time.

“I think the maker movement that has taken hold over the past few years has helped,” she says.

“People understand that there’s something to be said about creating something physically, and why they enter those 3D printing or robotic competitions – these types of programmes really inspire the next generation of what we hope to be manufacturing employees.

“So I think some of the benefits of the maker movement is helping people discover what’s interesting, what’s challenging, what the rewarding jobs are or could be for them in manufacturing.

“The talent shortage globally is very acute in manufacturing, so we need all the top talent we can get.”

Make art


The so-called “makers” may have a lasting impact on the wider manufacturing industry in that they may end up providing many of the next generation of manufacturing companies.

Certainly a company like Autodesk – the software company which owns AutoCAD, Netfabb and Inventor, 3D design applications aimed at people who design physical objects – may think so, given that it acquired Instructables, the hugely popular website for makers which provides thousands of “how to” make this or that device or object, many of which are actually very sophisticated.

Although, having said that, in order to make their creations marketable to the consumers, the enthusiasts featured on Instructables may need to use materials that are a few steps up from the cereal boxes and chopsticks they tend to cobble together.

Technically sophisticated they may be but, generally speaking, they’re not exactly objet d’ art.

Websites like Kickstarter and other “crowd-sourced” design and funding websites have a sort of quality control facility, whereby they help the makers to develop their products with commercialisation in mind, dispensing with the cereal boxes, chopsticks and sticky-tape and perhaps choosing instead more advanced materials, such as custom-fabricated moulds and parts made from plastic, metal and modern composites.

But either way, in the aggregate, across websites such as Instructables and Kickstarter and the many others, there is definitely a large, strong contingent of people who are developing products today that may become the iPhones and Pixels of tomorrow, although they do tend to pick more niche markets.

Rodriguez agrees that this is an interesting trend, and adds that large companies have spotted this, too, and are increasingly organising competitions to encourage such inventive people to present their ideas with a view to actually using them in their products.

There are quite a few examples of this, so maybe we should round them up in an article some time.

“When the maker movement goes ever more into the manufacturing industry, we’ll be seeing an open talent, gig economy type trend occurring, that we see more crowd design elements,” says Rodriguez.

“So, major manufacturers – such as airplane engine manufacturers, appliance manufacturers, and a number of companies like that – are taking critical challenges that they have and opening their doors and creating open design competitions, encouraging the crowd, the makers, or maybe people who are engineers in their day jobs but pursue their passion and invent new things, to participate.

“For example, GE Aircraft opened a competition to design a bracket model. The company wanted to reduce the weight and yet keep the same properties, and they opened it up to a design challenge.

“This is back years ago, and now there’s many examples like that, where they’re able to – for very small prize money – get hundreds of engineers to come back and find the best solution.

“GE implemented the winning solution on their airplanes.

“There are other examples of startups that look to the crowd to decide what product they’re going to make.

“They use the crowd to fund the product before they even make any, and then they’re already sold out – they already have a book of business, small batches, before they even start to manufacture them.

“To change the product development process in such a fundamentally transformational way is really interesting, in my opinion.

“I think that is one of the new ways that small companies as well as large companies are leveraging all of the talent around the world – engaging them in open design competitions, crowd sourcing ideas, and even some cases crowd-funded product design and development.

“You’ll see that makers who want to prototype and build scale, they’ll use contract manufacturers that are in the business of being agile, of being flexible, of being responsive, and being able to adapt to different batch sizes.

“We see more and more of that taking place.”

As this maker trend grows and perhaps becomes more professionalised or commercialised, there will be a corresponding need for manufacturers to become more flexible and adaptable.

And that’s possible with new robotics and automation technology, which enables fast changes of production systems – one week it might be geared towards making cereal boxes and the next it might be making chopsticks.

It’s not as simple as that of course, but with the 3D printing sector growing at the same time, many makers may find a far more flexible manufacturing landscape out there than there ever was before.

The opportunities seem obvious for manufacturers, especially the startups which adopt new and advanced technologies.

Even in today’s traditional manufacturing sector, manufacturing jobs offer good pay and benefits, says Rodriguez.

“Manufacturing jobs have always offered very solid benefits to employees,” she claims. “On the pay side, the average manufacturing worker earns around $81,000 annually, compared to around $64,000 in other industries.”

Manufacturing nation

welding Manufacturing

The US is either the world’s largest or second-largest manufacturing nation, depending on who you believe.

But there’s a perception that the sector has been eroded somewhat in recent years and one of the reasons why Trump managed to win is because he tapped into that perception, and pledged to grow the country’s manufacturing base.

Whatever the politics of the issue, most people in most countries would probably consider their respective manufacturing sectors to be among the most important parts of their economies and would support strengthening measures.

“I think any nation is well-suited in trying to be the most competitive they can be from a manufacturing perspective,” says Rodriguez.

“Manufacturing has some of the highest multiplier effects. There are strong linkages between a strong manufacturing and industrial base, with highly complex products, and national prosperity.

“So it’s advantageous for any and all nations to seek pathways to increase not only the amount of manufacturing they do, but also increase the number of people who are highly skilled in manufacturing because they are higher-tax payers.

“And I think, from our Global Manufacturing Competitiveness Index, for the first time ever, global manufacturing executives are indicating that they rank the US will be number one in 2020, worldwide, in terms of global manufacturing competitiveness.

“So I think and I hope we will see more movement towards the US.”