IT Solutions in Manufacturing: Differentiating with the

IT Solutions in Manufacturing: Differentiating with the Interactive Design & Automation Execution Loop – Copyright CXP SAS 2021 1

RESEARCH NOTE

March 2021

teknowlogy Group, Monat 2020



IT Solutions in Manufacturing: Differentiating with the Interactive

Design & Automation Execution Loop (ID&AL)


EXECUTIVE SUMMARY

As customer demands are evolving, manufacturing companies are also adopting new ways of

running their business. Core enterprise applications are evolving as a result. Improving

performance is not just seen as a purely financial exercise and the need to innovate and rapidly

adapt to change is now seen as the primary challenge that manufacturers are facing. The

Interactive Design & Automation Execution Loop (ID&AL) model supports this objective, driving

a change in the enterprise application solutions that manufacturers are looking for. And not all

software vendors are equally advanced when rated against the ID&AL model.

BACKGROUND RESEARCH AND OBJECTIVES

For several decades, teknowlogy Group has been surveying the end user business community

on a regular basis to establish a factual picture of the current and future demands and buying

intentions for a given market. For the manufacturing segment, our most recent study, carried out

among 160 European companies with more than 500 employees, representative of all

manufacturing types -- industrial and high-tech manufacturing (49%, discrete), chemicals and life

sciences (16%, process), machinery (35%, project, engineered-to-order), highlighted very

revealing changes and themes regarding the expectations of the management teams interviewed.

Top challenges in European manufacturing companies

To the question “what are the main challenges for your company?”

it emerged that innovation is the most often cited by companies (68%)


Fig. 1: Top challenges

Other issues impacting performance are also expressed. Cost reduction was of course close to

the top of the list. And to bring a specific response to customer demand is also a concern shared

by more than 40% of companies.

As for the notion of extended enterprise (internationalisation, integration of the ecosystem,

adapted economic model), it’s a result from the effects of globalisation but also from the impact

of the media coverage of new players such as Tesla which are shaking up and disrupting sectors

like the automotive industry, both through its technology and its go-to-market methods.

To stand out from the competition, it is therefore not surprising that these areas for improvement,

with innovation at the very top, are listed as top of mind by business leaders.

The concepts of manufacturing or industry of the future, or industry 4.0, put technology at the

center in order to transform the traditional industrial model with digital technology. Typical pillars

include services aimed at setting the stage to enable an innovative strategy mindset and

organization, the development of industry-specific technology solutions, as well as financial

incentives to help companies in their digital transformation journey.

Our research confirms that a majority of companies have launched reflections and actions in this

direction. Some of them (38%) are primarily “exploring potential”, with pilots on specific use cases.

Faurecia provides a good illustration of this “R&D on digital” approach, with 200 use cases

identified, 40 POCs (proof of concept) conducted and 12 different technologies selected for

68%

45%

44%

39%

39%

39%

35%

34%

32%

Innovation

Cost reduction

Customer care

Internationalisation

Ecosystem improvement

Business model change

Green impact

Production agility

Time to market


concrete applications, including Cobots (Collaborative Robots), RFID, Augmented Reality, IoT,

etc.

Other applications relate to long overdue improvements that have been seen as difficult to

implement until now due to technological limitations. It turns out that the other major issue to

tackle has of course been the (in)ability of the current IT systems to support the implementation

of a new business strategy.


IT SYSTEMS MUST ALSO EVOLVE TO ADAPT TO THE NEW

CHALLENGES

CIOs have a bigger role to play in this changing world, where technology is becoming every day

an integral part of the business itself. To help them align the IT system with the new business

challenges, teknowlogy Group has promoted the ID&AL concept (Interactive Design &

Automation Execution Loop).

ID&AL seeks to ensure that an IT system is constantly adapted and responsive in a changing

world. It is based on the idea that the business applications that make up the IT system are all

constantly aligned towards achieving the same goal: to offer and provide an appropriate response

through a differentiating and scalable customer experience.

This is why relationships are defined between these applications which will be all the more

symbiotic as the manufacturing segment in which the company operates is more likely to change

and be disrupted.

Beyond the general idea and to deal with everyday realities, a simple concrete translation of the

concept can be broken down as follows - fig2.


ID&AL – Interactive Design & Automation Execution Loop

Fig. 2: ID&AL – Interactive Design & Automation Execution Loop

Some will argue that the idea of a loop is not new in manufacturing and goes back to MRP2

(Manufacturing Resources Planning). Indeed, MRP2 already makes it possible to plan production

resources (materials, parts, as well as human and machine capacity) based on demand forecast

and customer orders, considering actual and planned inventory at multiple levels. The ID&AL loop

also looks upstream to design functions calling for innovation and downstream to after-sales

service functions, and how the final products are used and evolve over time. The entire

product/service life cycle is thus covered and analyzed within the IS. This broader closed loop

helps the system get automatically enriched over the course of the experience feedback, thereby

optimizing product and service design to increase overall performance.

Each application “brick” becomes a link that makes its own contribution to the value chain and

the overall system is coordinated by the Integrated Business Planning (IBP) brick.

While many software vendors claim IBP capabilities and “full end-to-end integrated application

suites”, only a limited number of the suppliers of software application suites are able to cover the

entire scope (not to speak about the often-limited integration between the bricks offered by a

given vendor). This is why leading manufacturers consider that their “best-in-class approach” is

driven by necessity and that they have to compose their own IT systems by assembling dedicated

stand-alone systems.

A major issue is that as changes happen at an ever more rapid pace, the level of integration

between the application “bricks” becomes more essential for success, as it guarantees qualified,

up-to-date and collectively shared information.

R&D and Engineering departments are compelled to get faster and more accurate feedback about

the products usage and post-sales service. For configured products in particular (but not just for


engineer-to-order), that also means that the “as-built” configuration is always evaluated in real-

time with all the repairs and service interventions. It’s only with a smooth and straight circulation

of product information and data via a complete interactive closed loop as part of the business (not

just to “support” it by looking at the rear mirror) that manufacturers will be able to cope with the

business changes, survive and even thrive.

While many software application vendors claim strong focus and investment in manufacturing,

only a smaller number of global players position their suites in a way that could potentially tick

many boxes of the ID&AL approach. SAP, Oracle, Infor, IFS, Microsoft, Sage are among the

names that are most commonly mentioned, due to their historical presence in manufacturing.

Looking forward, however, Oracle is the only large vendor proposing a coherent ID&AL suite, due

to the fact that all the bricks composing the suite are based on a single data model and technology

foundation. Oracle owning both the applications and a leading technology stack, which it can

optimize without any external delay. This specificity is particularly important as Oracle is rewriting

its entire applications suite for the cloud and improving its functional capabilities. (this standard

and new technology and products earns Oracle 5 stars)

Infor is known for its historical presence in manufacturing with on-premise solutions but is several

years behind. While offering what can be seen as a functionally strong application portfolio in

several manufacturing environments under its “Infor CloudSuite brand”, Infor doesn’t own the

technology foundation and has not rewritten the applications, which means that it cannot ensure

the continuous feed of the ID&AL model. Infor claims end-to-end integration using its Infor OS

tools (including ION), it is however reliant on technology partners for its cloud solutions, primarily

AWS.

SAP is also able to offer a broad functional footprint to manufacturers. However, what can be

seen as a renunciation to offer a proper PLM solution of its own, disqualifies its current solution

from an ID&AL approach, even if its partner solution (Teamcenter from Siemens) is praised by

many Engineering departments around the world. Moreover, S/4HANA is not a full rewrite of

SAP’s legacy portfolio of applications, and customers continue to report integration issues.

IFS is also another global vendor with a strong brand in manufacturing, and its functional coverage

shows strengths in several domains. However, its application portfolio is still insufficiently broad

to address the full ID&AL approach. Its acquisition of Astea, a well-known vendor in Field Service

Management, is helping IFS significantly broaden the scope on the functional scope.

Much like IFS, Sage can bring multiple references in manufacturing, yet cannot address the

complete end-to-end scope. It has however adopted an ecosystem approach and some of its

local partners (like for example 4CAD in France), propose a larger functional scope through an

assembly of solutions.

Last but not least, Microsoft, and its strategy to rely on a large ecosystem to supplement its core

ERPs with add-ons. On paper, Microsoft can claim a broad functional footprint, sitting on standard

technology. The add-ons are available on the marketplace, can cover multiple areas and

geographies and give a feeling of profusion. However, you have to be a knowledgeable


connoisseur to identify the right bricks, and the end solution will only be as good as the local

partner.

From an ID&AL point of view, we position these vendors as follows:

ID&AL positioning vendors

Fig. 3: ID&AL positioning vendors

The Functional scope is the ability to propose a solution to address the full ID&AL functions.

The Level of integration corresponds to the technical layers ensuring data integrity throughout the

processing chain


DISCLAIMER, USAGE RIGHTS, INDEPENDENCE AND DATA PROTECTION

For more information, please visit www.teknowlogy.com.

Disclaimer

The contents of this study were compiled with the greatest possible care. However, no liability for

their accuracy can be assumed. Analyses and evaluations reflect the state of our knowledge in

March 2021 and may change at any time. This applies in particular, but not exclusively, to

statements made about the future. Names and designations that appear in this study may be

registered trademarks.

Usage rights

This study is protected by copyright. Any reproduction or dissemination to third parties, including

in part, requires the prior explicit authorization of the ordering party. The publication or

dissemination of tables, graphics etc. in other publications also requires prior authorization.

Independence and data protection

This study was produced by teknowlogy Group. The ordering party had no influence over the

analysis of the data and the production of the study.

The participants in the study were assured that the information they provided would be treated

confidentially. No statement enables conclusions to be drawn about individual companies, and

no individual survey data was passed to the ordering party or other third parties. All participants

in the study were selected at random. There is no connection between the production of the study

and any commercial relationship between the respondents and the ordering party of this study.

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ABOUT TEKNOWLOGY GROUP

teknowlogy Group is your partner of choice for European

focused IT market data, insights and advice. It brings together

the expertise of two research and advisory firms, each with a

strong history and local presence in the fragmented markets

of Europe: CXP and PAC (Pierre Audoin Consultants).

We are a content-based company with strong consulting

DNA. We are the preferred partner for European user

companies to define IT strategy, govern teams and projects,

and de-risk technology choices that drive successful business

transformation.

We have a second-to-none understanding of market trends

and IT users’ expectations. We help software vendors and IT

services companies better shape, execute and promote their

own strategy in coherence with market needs and in

anticipation of tomorrow’s expectations.

Capitalizing on more than 40 years of experience, we are

active worldwide with a network of 50 experts.

For more information, please visit www.teknowlogy.com and

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© Copyright CXP SAS 2021

© Copyright PAC GmbH 2020

© Copyright PAC GmbH 2020

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