“Engineering as a way of looking at the world is second nature to me; what really drives me is creating things that make the world better,” says Lukas Pankau the CEO of Industrial Next, an autonomous manufacturing company. “I’ve tried my hand in other fields, but nothing compared to the fulfilment of building new things and solving real problems in engineering.”

Here, he tells us more about solving problems and modern manufacturing. 

Lukas Pankau is the CEO of Industrial Next

Starting in the automotive industry

Pankau was raised in a family of engineers and went on to study Aeronautical and Financial Engineering at the University of Michigan in Ann Arbor. Then went on to work for Ford.

“Professionally, I greatly admire parts of Steve Jobs and parts of Elon, specifically their ability to cut through noise and focus on the parts of a product that matter: the experience. Technology by itself can be cool, but it’s much more meaningful when it solves a real problem in the world. These lessons have helped me greatly throughout my career, which started with incredible complexity: my first tasks were to wrangle entire electrical systems for cars. Think of a human nervous system, but now add a hundred different vendors with their own ideas, marketing plans for markets on six continents, and a central push to lower costs as much as possible. It was a great start in the automotive industry. Through my stops at Tesla and Waymo both the complexity and challenge have grown immensely, and I’ve grown alongside them, applying the lessons from people I admire to my own work.”

From his experience of working at Tesla, Pankau learned about problem solving and manufacturing innovation. 

“Elon from the top down always emphasised first principles thinking and looking at fundamental truths when trying to solve problems. This mindset permeated through everything we did - we tried not to be constrained by how things are currently done and instead figure out how it should be done given the tools we have today and use that as a starting point,” he explains. “In particular, this approach and mindset has led me to my current mission – rethinking manufacturing innovation. Manufacturing, and general assembly especially, are not really approached today from a first principles perspective. The industry could really benefit from the advances in technology, AI, and systems thinking in other fields. My team is using these principles to lead radical change from the ground up, making sure that we use the best of today’s innovations and progress and apply it in a robust and reliable manner.”

Intelligent manufacturing 

“If we look at manufacturing from first principles given the advancements in robotics, AI, and eCommerce, then it would look a lot different than the mass production frameworks that most manufacturers have in place,” says Pankau. “The technologies that we now take for granted in our everyday lives are largely absent from manufacturing including websites/services that adapt to our behaviour, AI assisted driving, high quality cameras and computation in our phones, and massive networks of people at our fingertips online.”

The way Pankau sees it, there is a clear disconnect between our fast paced digital lives and the physical products that we consume, and this is largely because of the physical limitations of legacy manufacturing processes. 

“The future of manufacturing will be as modernised, bespoke, and fast as our digital culture. The transformation to intelligent manufacturing will happen through three avenues: 

1. The physical manufacturing process itself will be enhanced by smart automation and robotics

2. The management of the entire manufacturing process will be enhanced by AI systems

3. The responsiveness to customer demand will accelerate to match the speed we take for granted in digital services.”

The first avenue of transformation is on the shop floor. AI and automation will open up several new ways to design a manufacturing line that were previously unavailable to a heavily manual line. 

“Smart automation will replace clunky, traditional automation systems that function more like scripted movements. Smart automation will also turn robots into machines that can sense and respond to their environment rather than follow a preset path. This opens the door to flexible and modular manufacturing systems that can adapt quickly to product changes and customer demand.

“The second avenue of transformation is at the management level. While robotics and smart automation will be the foundation of the intelligent factory, AI and machine learning will be the foundation of the management of the factory. Currently, seasoned production managers and business owners have developed decades of institutional knowledge on best practices to optimise production, materials supply, and logistics. These are largely heuristic based and unique to each company. The developments in AI/ML will allow these decisions and optimisations to be institutionalised in software and data and will improve the decision making process of these seasoned managers. AI/ML will be able to do billions of optimisations and simulations, and these will be further refined when done in conjunction with managers with decades of experience. This is similar to giving a Chess Grandmaster assistance from the latest Chess AI.

“The third avenue of transformation is at the consumer level. Intelligent factories will be able to integrate closely with digital and physical networks to provide the best response to customer demands. Whether these networks are online communities and social influencers or local changes in in-store purchases, an intelligent factory connected to these will be able to quickly ramp up or reduce production to match their customers.”

The influence of TikTok on consumer behaviour and manufacturing

TikTok, along with other social media platforms, are changing the way that consumers make purchasing decisions. A study done by Hubspot found that 71% of consumers are now more likely to make a purchase based on a social media reference. 

“Not only are consumers spending more than ever based on the content they are seeing when they log onto these platforms, but it is also easier than ever before to make a purchase. Most of the time, all consumers have to do is click on a link and they can immediately make a purchase. A Deloitte report backs this up, finding that 29% of social media users are more likely to make a purchase on the same day of using social media. So not only is social media driving ecommerce, but it is greatly decreasing the typical consumer purchasing decision journey.”  

How does this impact manufacturing companies?
“Social media trends come and go quickly, and the influence it has on consumers is strong. These platforms have created a lot of unpredictability around consumer interests,” says Pankau. “All it takes is one well-known influencer to recommend a product for them to see a sudden spike in demand. This means that companies need to be able to adapt production quickly to meet these evolving trends and interests. Most companies are not currently able to do this since they still rely on traditional manufacturing processes. These processes are set up for mass production and predictable demand and could take weeks to adjust to a demand spike for a new product. They do not have the flexibility to keep up with evolving consumer behaviour. Smart automation and manufacturing systems would allow producers more flexibility to meet these demand spikes.”

What does Pankau think manufacturers should be aware of regarding social media?

“Manufacturers need to be aware of the fact that demand can change at any moment. They need to understand that not only can these platforms drive a spike in demand, but trends and fads can also be short-lived. They need to be prepared to adapt processes to meet highs as well as lows.”

To handle growing consumer demand-volatility in the sector, manufacturers need to transition from traditional manufacturing to intelligent manufacturing.

“This is the first step to handling growing consumer demand-volatility,” Pankau explains. “An intelligent manufacturing system with proper live data, modelling, and automation will be able to make these changes better, quicker, and more efficiently, all with little human intervention. For example, a large influx of orders for a specific product that was recommended by an influencer would usually take a producer weeks to adjust processes to meet this.”

As an alternative, a smart line would be able to make these changes and adapt stations in real time to meet this demand.  

“While we think of automation as ways to reduce cost and increase efficiency for producers, intelligent manufacturing systems will also open up new revenue streams that are easily missed by mass production processes.”