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3 Manufacturing Trends to Watch: Part 2


Arena regularly publishes insights and analysis on important trends impacting manufacturing. Is there an emerging business technology development you deem important or want us to cover? Comment on our blog.

1. Is PLM the New ERP? Manufacturing Analysts Think So. 

A recent Gartner report reflected a growing consensus among manufacturing analysts that the business impact of PLM may soon surpass that of ERP. “In addition to PLM’s inherent value, PLM decisions have a strong influence on the business model and benefits that can be realized by ERP, Supply Chain Management (SCM) and Customer Relationship Management (CRM) applications in downstream business processes; in that sense, PLM is the most fundamental business application in manufacturing.”

And Forrester Research wrote in their recent “ROI of Product Lifecycle Management” report, “Organizations implementing PLM can expect both top-line and bottom-line benefits that come from gains in time-to-market, operational efficiency, production costs, and regulatory compliance.”

So, what does this all mean?

Points to Ponder:

Manufacturers will place an increased emphasis on PLM investments to drive future revenue growth. And CFOs, who historically ignored the financial benefits in a PLM system, will begin recognizing how product quality and time to market translates to cost savings.

2. The Promise of Renewable Energy Depends on Storage

Energy storage’s high cost and technical limitations have kept renewable energy providers from achieving large-scale, low-cost parity with traditional suppliers for decades.

But that may now be changing. Take a look at California based Primus Power, which recently raised $20 million in venture capital as part of a Series C round. And Tesla Motors just announced plans—in a deal that may be financed by Apple—to design a “Gigafactory,” a 10-million-square-foot plant for making car batteries. This could lower battery prices down to drive electric cars into the mainstream and provide Apple with more innovative technologies.

As quickly as winds change direction, so shift the investment trends and technology paradigms in the dynamic cleantech sector.

Points to Ponder: New advancements in storage technologies are ushering in an era of rebirth and possibilities in renewable energy manufacturing which were heretofore unimaginable.

3. Medical Device Outsourcing Spikes

According to Capstone Partners, more medical device OEMs have turned to outsourcing to help lower costs, increase agility, accelerate time‐to‐market, and boost ROI—success factors needed in today’s environment. Capstone estimates that outsourcing has allowed OEMs to reduce costs by an estimated 10‐30%.

For medical device OEMs, the advantage of outsourcing includes access to dedicated product design expertise and talent, manufacturing cost reductions, and elimination of capital outlay for manufacturing equipment. In addition, outsourcing allows companies the ability to focus more on core competencies such as R&D, sales, and marketing, as well as accelerate time to market.

Points to Ponder: To facilitate synchronization across an increasingly dispersed supply chain and ensure adherence to regulatory standards, more medical device OEMs will migrate to cloud-based product solutions—especially those with integrated CAPA, device master record and design history files capabilities.

It’s an exciting time in manufacturing. According to Modern Distribution Management, manufacturing production increased 2.3% in 2013. This flies in the face of a 2.9% decrease in GDP. MAPI forecasts growth of 3.2% in 2014, an advance from the 3.1% forecast in the December 2013 report. Arena believes the momentum is likely to continue in 2015.