By Aaron Lober, VP of Marketing at CADDi. CADDi won the ‘Best SaaS Product for Business Intelligence or Analytics‘ and ‘Best SaaS Product for Engineering Management, PLM or CAD‘ categories, and were finalists in the ‘Best Data-driven SaaS Product‘ and ‘Best SaaS Product for Supply Chain or Warehouse Management‘ categories, at The 2024 SaaS Awards. They are also a finalist in the ‘Most Innovative AI Technology‘ category at The 2024 A.I. Awards.

“There’s gold in them thar hills!”

If you’re reading this and you aren’t familiar with Mark Twain’s The American Claimant, you might be asking yourself “what is this guy talking about?”. If you’re in that camp, give me five minutes and I’ll explain what I mean, and why it matters to you. It doesn’t take a deep study of Mark Twain to understand the idea that the future (“them thar hills”) is all unrealized potential (the gold).

It might not always seem that way if you’ve spent your career in manufacturing. Just two years ago, manufacturing contributed 11.4% of US GDP – nearly $2.4 trillion dollars. But two years later prospects don’t “feel” quite as bright. In Q1 2024, manufacturing contributed $2.87 trillion to the economy, which is now only 10.1% of the U.S. GDP. Real questions exist about the competitiveness of American manufacturers on the global stage. Manufacturers in China, Mexico, Southeast Asia, and around the world pose increasingly serious threats to the margins of American manufacturers.

The common thread across all these regions is they possess MASSIVE advantages over their US counterparts in terms of labor cost. This isn’t an advantage we’re going to overcome by attacking it directly, nor should we even try. Manufacturing jobs can be and should be the bedrock of the American middle class. That said, we can’t lie to ourselves about what’s happening. In 2022, there were 15.2 million Americans employed in manufacturing, 9.6% of total U.S. employment. In June 2024, that number had shrunk to just over 13 million American manufacturing workers.

The competitive crisis we’re facing is existential and no amount of import tariffs are going to resolve it alone. We have a storied history of manufacturing dominance in this country, but the industry needs to find a new way to compete if it’s going to continue contributing to American prosperity (the gold). I suggest we lean on the greatest advantage we have in this country: technology & innovation (“them thar hills”).

In this article, we’re going to explore how we got here: how the foundational technologies manufacturing relies have helped us, hurt us and opened doors to new opportunities. We’re going to examine the implications of our advancements in software and the critical role that digital technologies will play in putting American manufacturing back on top.

How it Started: Digitization

We’ve got a storied history of leaning on innovation and technology in manufacturing. But, if we want to understand the opportunity and the peril of the moment we’re currently in, we need to talk about digitization.

Digitization essentially began in the 1950s with the advent of computers. For practical purposes, however, when I refer to digitization in manufacturing, I’m talking about the more modern “softwareization” that has been occurring in waves since the 1980s. Switching from paper records to Excel spreadsheets, emailing orders instead of faxing or even mailing them, and scanned databases of parts drawings are all part of this digitization movement.

For a while, this process was a veritable gold rush in productivity and competitive advantage. Data could be instantly shared, studied, sorted, and searched. The efficiencies made shops quicker to adapt to new opportunities, move more strategically, and cut out wasted time.

How It’s Going: After the Gold Rush of Digitization

Like any gold rush, it couldn’t last forever. As this technology became widespread worldwide, the unique American advantage started to fade, and problems began to arise. These technologies provided automatic options, but were still very manual to set up: human beings still needed to fill out spreadsheets, write emails, and scan drawings. Our aforementioned labor cost disadvantage reared its head once more.

Moreover, as much as the heaps of data help inform engineers, they’ve started to become too much of a good thing. Overwhelmed engineers staring down databases of tens of thousands of records may spend longer tracking down the data they need than they do completing the task. Navigating these digital systems requires experience and expertise. These qualities are in no short supply in American manufacturing, but as 28% of manufacturing professionals are over 55, a wave of retirement looms. And behind that wave is a gap of knowledge, and thus productivity, as the digital systems we’ve built up become as burdensome as they are helpful.

Getting Back on the Board: Integrating Intelligent Systems with Human Ingenuity

Fortunately, we’re not stuck panning empty streams. Plenty of gold remains in the hills on the horizon, in a new era of technological advantage. Far beyond static tables requiring specific numbers or tags to look up, the new data works with you, covering the gaps of your memory or knowledge and serving up what you need.

This technology has been referred to in many ways that each capture different qualities of this new wave: systems of insights, machine learning, natural language processing, etc. We like the idea of cognitive analytics, emphasizing that our technology can think like a human, to solve human-difficulty problems, alongside you, the human. We want our solution to supplant your efforts like an assistant (with an unfathomably vast and fast memory for every drawing it’s ever seen) – but without the labor costs of an assistant.

Let’s dive into CADDi as a concrete example. It transforms your database of drawings from an index of part numbers to a comprehensive representation of the parts themselves. Then it uses cognitive analytics to search that database on the level of what you, a human, would associate most with the part – things like its dimensions or features or materials – rather than a part number you’d need to memorize, or labels that may be inconsistent or forgotten. If you need to find a bearing with the right types of holes and flanges, all you need is an example – even a hand-drawn sketch – and CADDi can instantly bring you every bearing in your database with those qualities. Even better, the moment you identify the right part, you’re also granted access to every single piece of relevant design, quality, cost, supplier or production data from across the rest of your siloed tech stack. All there attached to that drawing and ready for your consumption.

That’s an important, time and money-saving task. It ensures you aren’t doing redundant work or getting bad deals. But before, it was work that could only be done by a human, slowly and tediously, spending a lot of time and money. With American labor, the savings might be outweighed by the costs. Not so with this new era of software: the savings scale without any more hires or human-hours. Cognitive analytics solutions like CADDi help America get a leg back up, conquering human-difficulty challenges alongside humans without needing hundreds of humans to help. Get your prospecting gear on, try out a new tool, and start digging into the new hills of gold.