Business Decision-Making in the Factory of the Future · An IDC InfoBrief, Sponsored by Infor Business Decision-Making in the Factory of the Future The long-term benefit The greater

An IDC InfoBrief, Sponsored by Infor | November 2015

Business Decision-Making in the Factory of the Future

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An IDC InfoBrief, Sponsored by InforBusiness Decision-Making in the Factory of the Future

The manufacturing industry is on the threshold of a massive structural shiftThis shift is defined as:

Indeed, all these monikers are the same!

Industry 4.0

Factory of the Future

Digital Manufacturing

Smart Manufacturing

Advanced Manufacturing

Cyber/ Physical

Manufacturing

Manufacturing Renaissance

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Manufacturers are really looking at the following characteristics, all of which are key attributes to future manufacturing:

But how do manufacturers themselves define it?

These attributes, however, will necessitate a disruption in business models.

Agile

Networked

Automated

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The long-term benefitThe greater long-term benefit of the coming disruption will be the ability to manage processes in an autonomic or self-healing way — i.e., capable of automatically diagnosing and fixing inefficient or broken manufacturing processes. In the factory of the future, interconnected devices will be able to react autonomously to a broad range of internal or external events. Digitally enabled products and production lines will work in concert to reduce bottlenecks and proactively inform operators of available interventions to improve quality and increase throughput.

4 AGILE4 NETWORKED 4 AUTOMATED

4 RESPONSIVE

4 CONTINUOUS MINIATURE MODULAR PORTABLE

4 S.M.A.R.T. (SIMPLE, MODULAR, AGILE, RECYCLABLE, TIMESAVING)

4 DIGITAL 4 FAST4 LEAN

4

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Today, the material flows of physical components and objects through the supply chain are separate from information flow. In the future, the broad convergence

between information and operational technologies will remove the separation between products or materials and information, potentially in all processes and in all industries.

One of the most striking examples could be that objects such as manufactured parts will become in a sense “self-aware” – even when being

produced. These products will analyze their own production status and quality, interact with the producing machine, and share this information with

other machines or humans.

This future trajectory is about bringing together the operational and informational sides of manufacturing

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Given the huge opportunity of self-aware products and production, investments in foundational technologies enabling this new way of manufacturing such as Industrial Ethernet, Low Cost Sensors, Machine-Learning and Complex Event Processing, Data Historians, Manufacturing Intelligence, and Collaboration Tools.

WILL INCREASE 50% BY 2020

The opportunities of self-aware products and production

IN TERMS OF ADOPTION RATES, THIS MEANS THAT TODAY IDC SEES 15% OF COMPANIES

BEGINNING TO PUT THE FOUNDATION TOGETHER FOR DIGITALLY-EXECUTED MANUFACTURING.

THAT NUMBER WILL BE MORE THAN 65% BY 2020.

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The shift to the 3rd PlatformIn past years, the industry has been shattered by massive technological transformations, moving from mainframe computing — what IDC calls the 1st Platform — to the PC- and client/server-based 2nd Platform.

New technologies such as Internet of Things, Collaborative Robotics, and 3D Printing, are emerging from this journey, and they are promising a completely new degree of business benefits all focused around improved agility and flexibility in manufacturing process.

The industry is shifting quickly to the 3rd

Platform, built on the foundations of mobility, cloud, Big Data analytics,

and social business.

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Traditional IT system Emerging IT technology

Traditional machine Smart equipment

Existing operating process Emerging business models

Traditional IT architecture Cloud platform

The importance of blending old and new technologiesAchieving the promise of the connected factory necessitates companies blending old and new technologies. Shop floor operational systems will need to communicate with enterprise applications that will most often be cloud and mobile-enabled supporting enterprise-wide analytics and decision making. While this transformation is revolutionary from the standpoint of business benefits, it still requires a step-by-step evolution in the technology adopted.

Is industry 4.0 evolution— or revolution?

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How will this mashup between emerging 3rd platform architectures and supporting game-changing technologies work to support manufacturing operations?

The effect on operations

Today, companies are benefitting already from 3rd Platform technologies such as mobile, and cloud. Some technologies, such as mobile devices, gained a strong traction as they provided an invaluable tool to collect and deliver data to all relevant people on the shop floor. 74% of manufacturers are already experiencing a significant impact of these technologies.

Big data and analytics are often hyped, but manufacturers will begin to exploit the full power of data in the next few years. 90% of companies will have big data analytics capabilities. Indeed, data is the new oil in the manufacturing sector.

Mobile devices

Is there an impact of these game changing technologies on the way manufacturing operations are managed today, in five years, and in ten years from now?

Security

Advanced data acquisition

Cloud

n We are already experiencing an impact from this technology TODAYn We expect this to have an impact in the NEXT FIVE YEARSn We expect this to have an impact in TEN YEARS FROM NOWn No impact at all is expected

Big data analytics

Additive manufacturing

Social business and collaboration

Advanced automation / robotics

Digitally-executed manufacturing0% 100%50%

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80% of companies say the main benefit from IoT technologies is the augmented visibility over operations and the resulting business speed, agility and cost reductions.

The interconnection of devices and the resulting data is becoming central to production and distribution

Please outline in which areas you are leveraging or planning to leverage Internet of Things applications

n Currently in usen Not in use but planning investments over the next five yearsn Not in use and not planning

Production monitoring / visibility

Quality control / management

Remote maintenance and service

Warehouse management

Inventory management

Remote production control

Machine auto diagnosis

Internal logistics management

Remote machinery control

Enable autonomous / self-healing production0% 100%50%

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CIO and shop floor LoB managers tend to be less involved

This digital transformation is led by non-IT, C-level board members — the CEO, CTO and COO

This management shift is bringing up

unprecedented challenges for the

organizations.

For the first time in history, these C-level executives are compelled to take an active role in strategic decisions on information technology matters.

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The major barrier is the inability to create a consistent business case – which in turns creates a lack of C-level commitment. Change management and integrating new technologies with existing ones are also obstacles. All in all, data and information are only useful to decision makers when they can actually take action and trigger new business processes.

Who wants to move first?Despite the amplitude of the transformation, today only a minority of companies wants to be a first-mover in developing these technologies

23%Want to be the first movers in developing technologies

37%Want to be early adapters, but not first movers— there may be risks...

35%Are keen on waiting

to see changing technologies being

proven in the industry first

5%Are completely risk-adverse, and not going to make any changes

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ERP and SCM applications that provide seamless connectivity across a manufacturing organization are becoming the elective application for manufacturers to integrate many processes such as:

ERP as a foundation for IoT

Warehouse management

Labor management

Quality management

Maintenance management

Operations and detailed scheduling


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IDC advises companies to leverage existing connectivity opportunities lying within always-cheaper sensors and mobile technologies, as well as previous investments in RFID.

Getting started with digital transformation

This really entails starting with “quick wins” — monitoring assets, for example, and leveraging these case studies as opportunities to develop the business case for larger investments within the organization.

However, IoT technology and supporting applications such as integrated ERP can be also used to enable information-driven workflows that range from very wide (e.g., machine failure, spare-part replacement) to much narrower in scope (e.g., quality checks).

To do so, manufacturers must bridge the existing gaps between information and operations, and create an intelligence layer connecting the shop floor with the boardroom, providing real-time analytics to key decision makers.

Today’s technological landscape, which is making the creation and sharing of information continually easier and cheaper, is delivering ROI from these investments much faster because the impact of creating a single piece of critical information is amplified across the whole organization.

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» Converting raw data from the machine level into enterprise grade-information will transform and elevate the role of shop floors in manufacturing organizations and make them central in the fulfillment process.

» This is a non-return step. The more information is made available, the more it will be requested from other business units.

» Start from existing cloud initiatives in your organizations and adopt a trusted service partner to realize quick wins.

» Consider the opportunities provided by technology to launching value-added initiatives (e.g. “virtual” centers of excellence to reconcile manufacturing performance across the plant floor network and distribute best practices).

» Make a new contract with your employees, reorganize accountabilities allowing to unlock their full potential.

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Business Decision-Making in the Factory of the Future · An IDC InfoBrief, Sponsored by Infor Business Decision-Making in the Factory of the Future The long-term benefit The greater