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January 30, 2020

Elizabeth Engler Modic

Welcome to the ’20s, a decade in which medical technology will grow more than 5% annually. Global forecasts also indicate the manufacturing technologies used to produce medtech will grow anywhere from 5.5% to 17.7%, (see Infographic). What’s interesting as I look at the youngest entrant to manufacturing, Industry 4.0, is the growth rate. Value sits at $71.7 billion with growth to $156.6 billion by 2024. But, that’s only if manufacturers (management) are willing to embrace it, which can be daunting. Reluctancy toward these latest technologies isn’t new.

I recently read through decades of editorials and columns that my late father-in-law, Stan Modic, wrote throughout his career covering manufacturing. I met Stan – the Lou Grant of B2B publishing – when he hired me as an intern in 1994. He could be gruff but fair; he spoke his mind but was willing to listen; and he knew U.S. manufacturing needed to embrace technology to remain competitive.

One column, from 35 years ago, caught my attention: Management, not technology, is the problem. His warning, “The U.S. is in danger of losing its technological edge,” has been parroted so often that people consider it a truism. However, the real problem is not the lack of, rather the overabundance of, technology.

He was covering a study funded to determine how effectively new technologies were being employed to improve quality and boost productivity. Researchers concluded that, “management is confused by and generally not knowledgeable about advanced manufacturing technologies, their advantages and capabilities” and “even though experts agree that employing new technology can boost productivity by up to 60%, in a majority of cases U.S. manufacturers have ignored the argument that new technologies produce higher quality products faster and cheaper.”

Stan’s take: “Management nonchalance regarding the utilization of new technologies is difficult to understand. Although the study couldn’t document any correlation between the use of technology and profitability, it did find that…companies which reported higher sales and lower manufacturing costs over the last five years were using much higher levels of technology than the average.”

Stan referred to that editorial numerous times throughout his career because the issue wasn’t changing. By 1990, a study showed industry grading themselves with C- or D regarding their own experience with advanced manufacturing technologies.

I’m not sure the grades would improve much today. A report from Greenlight Guru found a stunning 81% of medical device companies are not using tools designed for the industry in their quality management process. Further results note that 71% reported data collected by their company’s quality system is not easily accessible in real-time.

Industry 4.0 is one of those newer entrants to manufacturing. Those who have embraced it are able to document positive result on business. Those who don’t will be the adoption laggards Stan talked about 35+ years ago.

Which will you be?

Elizabeth Engler Modic, Editor
emodic@gie.net