- June 3, 2021
As the fourth industrial revolution ushers its way in, additive metal manufacturing is proving to be a disruptive technology
If Canadian manufacturers are to embrace Industry 4.0, investing in emerging technologies is paramount to maintain a competitive foothold. And while it took a global pandemic to accelerate the adoption of increased automation on the shop floor—not just in Canada, but globally—many are keeping the momentum going.
According to Rob Connell, a partner in KPMG’s tax incentives practice, who also advises manufacturers on applying for research and development funding for Industry 4.0 initiatives, Canadian manufacturers excel at traditional automation, but when it comes to advanced technologies, they need to start investing or risk falling further behind international competition.
“We surveyed 165 industrial companies across Canada in a pre-pandemic survey on their digital maturity, and we found that nearly 75 per cent of Canadian companies intended to invest less than five per cent of their annual revenue on improving their digital capabilities,” says Connell.
Globally, KPMG found that Industry 4.0 gained momentum during the pandemic and it expects it to accelerate rapidly as companies look to build resilience and improve operations, production efficiency, speed to market, customer service and end-to-end supply chain transparency.
“Industry leaders are already leveraging Industry 4.0 solutions. Japan, Germany, South Korea, and even Poland, which is not known for being a global industrial powerhouse, are investing heavily in Industry 4.0 to the extent that entire factories are being renovated,” says Connell. “3D metal printing is growing quickly in the US, Europe, China and Asia. While the US has had an early lead due to adoption from the aerospace and defense sectors, China is expected to see the largest growth rate in 3D metal printing over the next several years.”
Up until now, Canadian manufacturers haven’t had a lot of incentive to adopt emerging technologies for various reasons. KPMG research shows that the main barriers for investing are: the fear the technology won’t work; changing organizational culture; and the lack of talent or skillset in implementing the technology to achieve business outcomes.
“Also, Canadian manufacturers have not embraced these emerging technologies because, frankly, they haven’t had to,” says Connell. “Financial results have been strong and there is little incentive to change. However, the speed of innovation is accelerating and there is real risk that if we don’t keep up with our international competition, we’re going to find ourselves at a significant technological and economic disadvantage.”
He concludes, “Don’t bring a gun to a drone fight. Canadian manufacturers need to recognize that what got us here won’t keep us here. We need to evolve.”
While there still remains some hesitation around 3D printing technology, there are some early adopters of Additive Metal Manufacturing (AM) technology, such as automotive, aerospace and defense industries.
With the new push on battery electric vehicle (BEV) production (see Case Study – Smart Investment) additive technology will play a pivotal role in component development. And Rob Connell, a partner in KPMG’s tax incentives practice, says that projections indicate that aerospace and defense will be the sectors with the highest growth rate in 3D printing from 2020 to 2027.
“3D printing accelerates new product introduction, enables low volume batches, decentralizes manufacturing and enables greater product variety and customization. And it allows shorter lead times from design to the release of the product compared to conventional tooling and machining practices,” says Connell.
Some of the main benefits of AM include shorter development times, reduced costs, rapid prototyping, reduced material waste, and the ability to make complex geometries that may not be possible with traditional manufacturing processes.
“The question is, are manufacturers in Canada really capitalizing on the benefits of these technologies?” says Connell. “Canadian universities have done a great job investing in research in 3D metal printing. There is a significant opportunity for Canadian manufacturers to leverage existing incentive programs—such as the National Research Council’s Innovation Assistance Program (IRAP) and MITACs, a Canadian non-profit organization that helps build partnerships that support industrial and social innovation—to work with these universities to help further advance these technologies and bring them to market.”
The next frontier of AM, according to KPMG, is the space sector. 3D printing helps accelerate innovation for space and aerospace exploration due to low cost and rapid prototyping, and by lowering or optimizing the weight of low volume parts.
“The space sector is a small segment of Canada’s economy, but we believe it has the potential to deliver significant and sustainable benefits to Canada’s economy post-pandemic,” says Connell. “The space sector currently contributes $2.3 billion to Canada’s GDP and directly employs nearly 10,000 people. Small to medium businesses account for over 90 per cent of all space firms and nearly 30 per cent of employment. If Canada creates the right conditions, we could see exponential growth in the not-too-distant future.”
The mindset is shifting. Here are some quick facts on where the market is going and what manufacturers are focused on today.
- Global sales of additive manufacturing (AM) products and services are expected to more than double to about US$35 billion by 2024
- All major OEMS have AM divisions or are testing AM solutions
- Seven out of 10 Canadian technology executives say that emerging technologies are essential to their future survival
- US companies are currently spending 30 per cent more on Industry 4.0 technology than Canadian companies
- 84 per cent of Canadian CEOs are now prioritizing technology investments to meet growth and transformation objectives
- 92 per cent of CEOs say COVID-19 has accelerated the digitization of their operations
- 71 per cent of manufacturers are saying emerging technologies—including cloud enabled technologies—are essential to future survival
- The 3D Metal Printing market is forecast to reach US$6.07 billion by 2027
Sources: KPMG article Why additive manufacturing is here to stay; KPMG International and Global industry Report; KPMG Global CEO Outlook; Reports and Data (globalnewswire.com)