NEW YORK—Global influences will allow manufacturing, including those in the rubber industry, to enjoy a renewed emphasis on American soil in the coming year, one industry tracker believes.
"I think manufacturing is coming out of an era of misperception, wicked misperception, over the years," said Tony Uphoff, president and CEO of Thomas Publishing Co. and thomasnet.com. "I think we are starting to see manufacturing for what it really is—a $2.4 trillion industry, massive part of the GDP, a great career."
Uphoff, who connects buyers and sellers of products, services and information for businesses, said the website is the modern-day version of the once-printed Thomas Register of American Manufacturers.
He noted that perceptions about manufacturing are changing as people realize long-held beliefs are no longer accurate.
"I don't think there is an industry we could possibly name that has been more regularly misperceived and misrepresented than the manufacturing industry," Uphoff said. "The average person, they are picturing something from the 1940s."
Manufacturing no longer needs to endure a dirt-under-the-fingernails reputation, Uphoff said. "People realize the level of vibrancy to it, the manufacturing economy, the level of career opportunities that are represented in it," he said.
The rise of Industry 4.0
Changes in manufacturing include a continued evolution of Industry 4.0, essentially the use of the internet and online connectivity to drive change and improvements on the factory floor.
Uphoff said Industry 4.0 has been gaining momentum in recent years as more companies embrace its capabilities and more equipment makers design their products for such integration.
"Boy, if I were to put a headline on it, I'd probably say 2020 is the year Industry 4.0 becomes a reality. It's a very broad statement. Let's unpack that to make that more specific," Uphoff said. "If you look at the adage of we tend to overestimate how fast a major phenomenon will happen, but then we tend to underestimate its impact over time, I would put Industry 4.0 into that category."
The "Industry 4.0" buzzword follows previous advancements, including mechanization and steam power in the late 1700s, a period that's now referred to as Industry 1.0. The next phase, Industry 2.0, involved mass production, assembly lines and electricity.
And Industry 3.0 brought in automation, computers and electronics over the past half-century, Uphoff said.
"We've been talking about the convergence of advanced digital and automation technology with traditional industrial products and services. We've been talking about this for the better part of a decade," Uphoff said. "I think we are now starting to see it really accelerate and take off."
Industry 4.0 has been in somewhat of a "slow burn" in recent years, Uphoff said, as integration takes place in manufacturing. But the CEO believes this year is when the concept breaks through with a larger audience.
Improvements in technology, including greater wireless speed and capacity, are keys, he said.
Uphoff likened Industry 4.0 to the onset of streaming entertainment, saying it's been a generation since predictions that streaming would be the dominant way people consume entertainment. But such forward thinking had to wait for technology to catch up to it.
"Back then, filmed entertainment, DVD sales, of movies was a $22 billion (business). The vision was there. We just didn't have the infrastructure. The bandwidth for streaming wasn't available," he said.
Now Industry 4.0, with the advent of new 5G wireless networks, for example, can take root throughout manufacturing, he said.
A return of manufacturing to the U.S. will be another boost to the industry, Uphoff said.
"You are seeing a tremendous amount of reshoring, which no one talks about," Uphoff said. "There's huge growth in reshoring."
And there's more interest in foreign companies setting up manufacturing sites in the U.S., he said, as global business conditions change.
With millennials now firmly entrenched in the work force, there is a greater comfort level in thinking "internet first" when making sourcing decisions. Uphoff said an estimated 70 percent of the average industrial purchase process will take place before a buyer will engage directly with a company representative.
According to Uphoff, thomasnet.com has nearly 200 filters on its website that can help connect buyers and sellers and help the company track trends in the marketplace.
Searches for rubber, for example, are up 12.3 percent year-over-year, the company said, and up 60.6 percent during the past 12 weeks over the historic average.
Searches for tires on the website are up 60.7 percent year-over-year, and up 63.9 percent during the last 12 weeks over the historic average, the company said in mid-January.
Tariffs and trade wars also will have an impact in 2020, the CEO believes. Concerns about the viability of a global supply chain has some companies rethinking their approach—or at least expanding their views.
"We clearly have seen more companies sourcing locally, and closer to where the supply chains are, due to tariffs," Uphoff said, saying that supply chain managers have been "pleasantly surprised" that price differences have not been as drastic as previously thought. "They've actually been able to rethink it and change suppliers."
Tariffs give "a sense of pause" that allows for potential change, he said.
"We're going to see an increased demand for sourcing from North America," Uphoff said. "Whether that can outrun some loss from some other countries remains to be seen. I think the other thing that it has done, without question, is it's been a positive sourcing function for procurement and particularly supply chain management to rethink their supply chains—or, if nothing else, do contingency planning."