strategy and business

Jabil’s manufacturing leap

To understand the future of manufacturing, you have to look at the past. Until the early 20th century, most factories were powered by steam. Enormous central steam engines drove massive shafts, which in turn sent power to individual cutting and shaping machines through elaborate belts and gears. Then came electricity, and most companies replaced their steam engines with electric motors. The rest of the factory — all the shafts, belts, and gears — kept working as before, just with a different power source.

Of course, the factories would have been much more efficient if the companies had seized the moment and replaced that single central motor with individual motors throughout the plant. They could then have revamped the factory to ease production flows as well. But that would have involved redesigning the entire factory layout, an expensive and conceptually radical proposition that many factory owners didn’t even know was possible. What followed instead were decades of slow but steady plant reorganization as the masters of industry sorted out how best to realize the full potential of electric power.

Flash forward to today, and the same issue is present in most versions of Industry 4.0, as the convergence of digital technology innovations in the energy and manufacturing sectors is known. Companies are investing in artificial intelligence (AI), the sensors and connected devices of the Internet of Things, 3D printers, and other advanced manufacturing and supply chain technologies. But they’re keeping the traditional assembly line, complex supply chains, and other long-standing practices intact. The industry is still essentially in a

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