In 1913 in Detroit, Henry Ford changed the world by revolutionizing how things are made. His innovative introduction of the assembly line reduced the amount of time to build a car from 12 hours to just over two. Since then, the world’s manufacturers have constantly sought more efficient ways to make things. Manufacturing itself is the process of transforming raw goods into another product, usually through human-led, machine-assisted methods.

The New Industrial Revolution

The manufacturing industry is undergoing massive change, rivaling the Industrial Revolution that began in England and continued on Detroit's assembly lines. But today’s revolution is “smart,” thanks to factories using artificial intelligence and robots.

A new trend is the “cobot” — a collaborative robot designed to work with humans. One company called Moduform uses them to make furniture in the U.S. The company credits using cobots for reducing their staffing turnover, since the robots do mundane repetitive tasks that bore humans, while people can now do cognitive tasks requiring judgment and diversified responsibilities. Other innovations include 3D printing, Artificial Intelligence and automation.

Today’s artificial intelligence manufacturing revolution improves performance in two key areas of manufacturing: productivity and quality control.

Manufacturing Methods

There are typically three kinds of manufacturing:

Make-to-Stock: This is traditional manufacturing, in which a company makes products based on past sales data. This can go awry when markets change and sales numbers shift. Examples are cars, refrigerators and other mass-produced, larger consumer goods.

Make-to-Order: These are more customized products that consumers order and are made to specifications. It means the customers get exactly what they want, in theory, but must wait before it arrives. A designer sofa is a great example, in which consumers can choose upholstery, then wait three weeks to receive it. This method reduces risk of overstock for manufacturers, but also can compromise sales potential.

Make-to-Assemble: This is almost a hybrid of the other methods. Using past sales data, the company manufactures individual product components, but awaits consumer orders for customizations before assembling the final product to ship. For example, a customer orders a laptop with several specifications, then the factory assembles one to those specs. Think of it like ordering a submarine sandwich where you can dictate exactly what ingredients you want, but all the ingredients are prepared in advance, allowing for quick assembly.

Key Characteristics for Manufacturing

Manufacturing is essentially risky, because it presumes there is enough market for a product to make it on a large scale. Managing that risk is the most important part of manufacturing.

To manage that risk, manufacturing needs:

Productivity: Balancing efficiency with productivity translates to profit. Low productivity means higher costs, due to wasted manpower and overhead. Understanding and balancing the ideal ratio between costs of labor, overhead, materials and demand is critical for any manufacturer.

Quality Control: If products are not made with consistent quality, a company may not survive. Customer experiences must be positive across the all branded products, or the entire company could suffer. For example, Samsung’s Galaxy Note could have been a disaster for Samsung when its batteries famously caught fire, causing airlines to ban them from planes.

Good Design: Manufacturers must ensure their product is well-designed, so their product can beat out competitors. When designed with quality and innovation, a product stands out from the crowd. It is industry-changing, high-quality design and innovation that have made Apple into a global electronics powerhouse.

Cost Effectiveness: From labor allocation to robotic support through to material quality and price per unit, there is much that affects the cost effectiveness in manufacturing. Without being cost effective, a product will fail and jeopardize the entire company's bottom line. The car industry makes production more cost-effective by creating different models of cars based on shared platforms. Chrysler-Daimler, for instance, has used the same platform for both the Jeep Cherokee and the Mercedes-Benz M-Class, meaning production costs are lower. That’s the benefit of smart design. These, among other waste-reducing, efficiency-increasing methods are products of a movement toward "lean" manufacturing, which Toyota's efficient strategies have helped pioneer for over 40 years.