Investment to spark manufacturing technology explosion
A lot of investment is coming to manufacturers through policies such as the CHIPS and Science Act and the Inflation Reduction Act, which will help companies build in the capabilities to reshore and multi-source away from China dependency, according to Raj Badarinath, chief marketing and product officer at Rootstock, a cloud ERP vendor.
“There’s about a half-trillion dollars being spent, which means that there will be a Cambrian explosion of new forms of manufacturing that will be developed,” Badarinath said. “These won’t be like the assembly lines of the ’50s, ’60s and ’70s. These will be high-end manufacturing driven by technology and new concepts like 3D manufacturing.”
ERP systems are being designed now to meet these new manufacturing environments, particularly for reshoring requirements for the automotive and aerospace and defense industries, as well as new industries such as green energy and battery manufacturers, he said.
“When these companies grow, they don’t want to just expand their old legacy ERP. They want to rethink it and design it for the next 30 years,” Badarinath said. “The role of ERP is evolving from a database where you could dump everything in as a source of truth to something that helps you make better decisions through technologies like AI and machine learning.”
The investments being made to reshore manufacturing will involve mostly small to midsized companies, and these companies are the most in need of modern digital software systems, said Ryan Kuhlenbeck, co-founder and CEO of Pico MES, based in Redwood City, Calif.
Small to midsized manufacturers need to integrate MES with ERP systems to improve efficiency that can reduce the costs and make reshoring more viable, Kuhlenbeck said.
“The investment money coming into manufacturing acts as a catalyst that guarantees demand effectively,” he said. “Now these companies can invest in digitalization technologies to meet that demand efficiently.”
