We are delighted to present this guest blog from Lorenzo Veronesi, Research Manager for IDC Manufacturing Insights EMEA.
For many manufacturers, B2B and B2C sales plummeted in 2020 due to the COVID-19 pandemic. On top of that, companies have been forced to shut down factories or restrict access to the workplace to prevent the spread of the virus and have been limited in their choice of modes of transport, including road, rail, and air.
The Role of Factory Operations Is Central
Despite the challenges, what has stood out is that better operational performance has made a difference when it comes to easing uncertainty and gaining competitive advantage. IDC research has highlighted that companies with better operational capabilities have been more successful in dealing with business volatility by:
- Ensuring operational continuity — going through fast and effective process restructuring
- Enabling integrated fulfillment — coordinating factories operating in the value network
- Securing their place in the global ecosystem — assuring quality, traceability, trust, and compliance
- Balancing speed, agility, and cost — moving from just in time to "just in case"
- Accelerating time to value — ramping up production at speed when needed
A Transparent Process Is an Efficient Process
What do these strategies have in common? They're all based on achieving stronger business resilience by evolving processes to maximize employee productivity at all levels by enabling them to take better decisions. But to do so, manufacturers have had to leverage the levels of transparency of their factory operations — horizontal (across the shop floor) and vertical (from the shop floor to the enterprise level) transparency builds the foundation for decision making across functions and for any future process improvements.
Transparency of operations requires operation equipment to be instrumented and connected to be shared across multiple functions and domains. IDC research highlights that on average 49% of operational equipment is currently instrumented — that is, it has programmable logic controllers (PLCs), distributed control systems (DCS), sensors, meters, etc. But, still, around 20% of instrumented operational equipment is not connected to a network today.
This is an issue when the ability to remotely control and monitor critical production assets and equipment is the entry point to capturing and analyzing data from the execution process and to share this data across functions so that it can be turned into meaningful insights and relevant actions.
The Technology Opportunity and How it Can Be Addressed
The utilization of data from operational technology (OT) systems such as real-time signals from the shop floor, combined with enterprise IT and analytics applications support, increases levels of horizontal and vertical transparency and builds the foundation for cross-functional and cross-domain decision making. To this end, IT and OT domain integration is key. This closer integration helps organizations to increase transparency, which is the basis for resilient factory operations.
The good news is that technology supply ecosystems have evolved rapidly, and now there are plenty of suppliers that are keen to push solutions to market. In the end, enabling successful, future-proof operational excellence initiatives is inextricably linked to data excellence, and companies that fail to scale technology across the different IT and OT domains will risk missing out on the opportunities that come with being more competitive through data integration.
For more on the importance of increasing supply chain visibility and the role of technologies, please read the IDC InfoBrief ‘Enabling Resilient Operations in Manufacturing to Manage Uncertain Times’, sponsored by Fujitsu.
Lorenzo Veronesi is a Research Manager for IDC Manufacturing Insights EMEA.
In this role, Veronesi supports all the IDC MI research services for EMEA, by analyzing IT opportunities in multiple manufacturing industry sub-verticals, by writing quarterly industry updates and standardized reports based on annual surveys on manufacturing end-users. He is also often involved in consulting projects in EMEA for end-users, IT vendors and public authorities. Veronesi also actively contributes to the Worldwide Operations Technology research services and related consulting activities.