Top 10 Predictions for Manufacturing CIOs In 2019

• Manufacturing CIOs are now expected to be business strategists first, technical experts second as many are expected increase IT’s contributions to growth.
• CIOs and their teams who are the most adept at integrating analytics, Business Intelligence (BI), real-time monitoring, and quality management are growing on average 10% faster than their peers.
• Security will become a growth catalyst in 2019 as it assures uninterrupted operations. As threat surfaces proliferate across manufacturing, Zero Trust Security powered by Next-Generation Access (NGA) treats every identity as a new security perimeter, locking down every threat surface from being hacked.
• CIOs who can create a unified data model and power it using IIoT platforms will grow the fastest and have the greatest time-to-market advantage with new products compared to peers.

These and many other insights are from a series of discussions with CIOs and manufacturing senior management teams during the last six months of 2018. Many of the insights shared by senior management teams are reflected in a 2018 survey completed by Decision Analyst on behalf of IQMS titled How Manufacturing Technology Can Make the Greatest Contributions to Your Business Growth. You can download a copy of the survey here. The survey found that the fastest growing manufacturers can orchestrate a diverse base of technologies more effectively than competitors. As a result, they’re also succeeding at digitally transforming their existing business while creating net-new products and services. Digital transformation initiatives and programs anchored in customers’ quality goals succeed over those that seek cost reduction alone. These and other insights are from a recent survey completed by Decision Analyst on behalf of IQMS.

Top 10 Predictions for CIOs in Manufacturing

The following top 10 predictions for manufacturing CIOs is based on the combined insights gained from discussions and interviews with senior management and the 2018 survey:

1. 1. 1. Integrating analytics, Business Intelligence (BI) and legacy reporting systems to create a single, unified view of manufacturing activity will see greater investment by mid-tier and enterprise-level manufacturers. Manufacturers growing 10% a year or more are always prioritizing analytics, BI and their integration with ERP and Quality Management systems to gain greater insights. The recent survey found those manufacturers growing the fastest have strong data-driven cultures. Expect to see more manufacturers look to baseline analytics to gain insights into areas they can improve to grow revenue further.
      2. Manufacturing CIOs will double down on security, realizing every identity and device are the new security perimeter of their businesses. 2019 will be a pivotal year in how manufacturers secure their operations. Legacy approaches to relying on trusted and untrusted domain controllers are proving to be easily hackable today. What’s needed is a security framework that can scale and flex as fast as a manufacturer grows. Zero Trust Security (ZTS) is a proven security strategy that treats every identity and device as a separate threat surface. ZTS starts by defining a manufacturing business’ security perimeter as every identity, regardless of their location. Every login attempt, resource request, device operating system, and many other variables are analyzed using machine learning algorithms in real time to produce a risk score, which is used to empower Next-Gen Access (NGA). Leaders in this field include Centrify who is redefining the legacy approach to Privileged Access Management with cloud-architected Zero Trust Privilege to secure modern enterprises and stop the leading cause of breaches – privileged access abuse.
      3. CIOs are going to invest more in streamlining audits, inspections and strengthening their quality management and compliance systems to stay competitive. 92% of manufacturers say product quality defines their success in the eyes of their customers according to a recent survey completed by Decision Analyst. Manufacturers growing 10% a year or more are investing more in streamlining audits, inspections, quality management, and compliance systems. While all manufacturers continue to track the most common quality measurements show below, those growing 10% a year or more are also more likely to be tracking yield rates by machine (38%), have an Engineering Change Order process in place and use it (37%), rely on Overall Equipment Effectiveness (OEE) (35%). The following graphic compares all methods currently used by manufacturers to measure and manage product quality:
      4. Digitally enabling supply chains to provide greater visibility including track-and-trace capability will become a high priority, especially for companies facing tightening time-to-market competitive challenges. Every high-tech manufacturing CIO is facing the challenge today of how to improve time-to-market for their products. Many are launching smart, connected products, making them more dependent than ever before on their suppliers. The nature of supply chains is also changing, making every manufacturers’ goals more challenging to attain. Expect to see CIOs invest heavily in digitally enabling their supply chains, adding in track-and-traceability first to gain the needed visibility to improve time-to-market better and make sure they’re delivering orders on promised customer delivery dates.
      5. The digital transformation projects that thrive and deliver more than expected will prove to be anchored on a very accurate, quantified view of their customers’ quality requirements. Digital transformation is overhyped and the latest veneer many companies and software vendors put on products in an attempt to make them look new. The truth is digital transformation has two parts: one aimed at streamlining and optimizing existing systems and processes; and the second, at creating new digitally-driven business models. Based on dozens of visits with manufacturers and the survey completed with Decision Analyst, the one attribute that rises above all others is a focus on overwhelming customers with value. Knowing customer quality goals and measuring progress against them has to be the cornerstone of any digital transformation strategy if it is going to succeed.
      6. Real-Time Monitoring emerges as the table stakes every manufacturer invests in to stay competitive and grow. 81% of manufacturers say real-time monitoring is improving their business. 72% of manufacturers say real-time monitoring is essential for streamlining and making inventory reconciliation more efficient. Bottom line: real-time monitoring is a must-have in any data-driven business. The following graphic from the study summarizes the insights gained from interviewing manufacturers regarding their real-time monitoring plans:
         
      7. CIOs making the greatest contributions to revenue excel at integrating analytics, Business Intelligence (BI), Real-Time Monitoring and Quality Management companywide and providing prescriptive guidance quickly. A recent survey completed by Decision Analyst on behalf of IQMS found that manufacturers growing 10% a year or more can orchestrate these four key technologies and drive revenue faster than their peers. CIOs and the companies they help lead have an intensity to improve continually. The contextually rich real-time data streams Real-Time Monitoring provides fuels greater insights gained from analytics, BI and quality management apps, furthering their lead in competitive markets.
      8. More manufacturers will pilot Industrial Internet of Things (IIoT) platforms than in any previous year, with the most successful being able to create a unified data model companywide. What’s slowing down IIoT adoption and success promoting pilots into production is the inconsistent, incomplete data structures at the machine, line, factory, and company level. In response to CIOs prioritizing IIoT as a part of their new digital business models, look for IIoT platform providers to offer pilots at little to no cost. IIoT platform providers are looking for the chance to prove they can solve one of manufacturing’s greatest challenges: inconsistent, inflexible legacy data structures from the shop floor to the top floor.
      9. CIOs will lead their companies out of costly price wars by finding new ways to use IT as a platform to fast track smart, connected product development, and Going into 2019, nearly every manufacturer is facing the dilemma of either struggling to cost-reduce existing product lines or launch smart, connected products. Instead of sending pricing into a freefall and starting price wars on existing products, 2019 will see more manufacturers fast track smart, connected products that deliver services revenues. It’s the path out of price wars, and CIOs are going to be called on to deliver the IT platform that makes this happen. Based on conversations with several CIOs at leading manufacturers, this is already starting to happen.
      10. Attaining lights-out manufacturing becomes more attainable than ever before as CIOs pilot and promote into production smarter machines. CIOs are managing the intersection of operational technology (OT) and information technology (IT) to attain lights-out manufacturing more aggressively than ever before. Lights-out manufacturing is a must-have strategy for many manufacturers to stay globally competitive, especially many mid-tier manufacturers who compete with many larger global competitors. Industrial machinery manufacturers are caught in their own price war, which underscores the urgency they’re moving with to develop and launch smart machines capable of running multiple shifts That’s going to make it possible for small and mid-tier manufacturers to attain lights-out manufacturing for the first time. For additional background on this prediction, please see the Forbes article, Smart Machines Are The Future Of Manufacturing.