5 Technology Trends Manufacturers Are Relying On For Growth in the Second Half of 2018
- Advanced analytics spending globally is predicted to grow from $136B in 2016 to $232B in 2021, attaining an 11.3% Compound Annual Growth Rate (CAGR) according to a recent study by Deloitte.
- 86% of the top 100 companies in R&D spending worldwide are from the manufacturing industry also according to Deloitte.
- Manufacturers are investing the most in the areas of ERP upgrades and new apps, mobile apps that scale across all shop floors, optimization and predictive analytics including Business Intelligence (BI), quality management, and real-time monitoring based on a recent IQMS survey.
Every manufacturer’s business is at an inflection point today. Digitally-based manufacturers are scaling faster, attracting new customers and quickly increasing production levels. At the same time, legacy IT systems designed to support mass production in the past provide little if any support for product customization strategies manufacturers rely on for revenue today.
Solving the paradox of making the most of new revenue opportunities starts with a candid assessment of just how far legacy IT systems can scale. In our many meetings with customers, their focus continues to be on extending legacy IT systems as long as possible while selectively adding in technologies. The following five manufacturing technology trends reflect how customer-driven manufacturing is today and how pervasive accountability for quality, speed, and scale are dominating the global manufacturing landscape.
Five Top Manufacturing Trends to Drive Growth for the Second Half of 2018
Manufacturers are focused on the three core goals of accomplishing greater efficiency, growing revenues and attaining profitability targets. These three goals of greater efficiency, higher growth and strengthening profitability that force manufacturers to be more customer-driven than ever before. The following five manufacturing technology trends are the ones manufacturers are relying on to navigate the inflection point each is facing today:
- Rising adoption of analytics including Business Intelligence (BI) and as a foundation for Manufacturing Intelligence. Manufacturing is now a digital-first business with analytics, BI and Manufacturing Intelligence dominating the priorities of CIOs responsible for IT infrastructure. Analytics are the fuel manufacturers rely on to reinvent themselves by managing to a core set of customer-driven metrics. As one CIO told me recently “we’ve deliberately chosen only customer outcome-based metrics because we want our analytics to change the culture of the company, so everyone is always focused on who we serve.” From the flatscreens showing improvements in on-time deliveries to the dashboards showing product quality gains, the strategy is working. Perfect Order performance jumped over 22% in six months after the decision to focus on customer-driven metrics. The graphic below shows the data ecosystem many manufacturers either have today or are quickly becoming. Orchestrating each of these sources of data is critically important to creating a base of manufacturing intelligence that can flex, scale, serve customers and drive revenue.
- Manufacturers are prioritizing supplier quality and audits, then providing the results across manufacturing to improve collaboration, communication, and long-term performance. 88% of B2B customers say that quality is the most important factor in their decision to remain loyal to a manufacturer or brand according to Data, Strategy & Technology. In an IQMS survey 92% of manufacturers say product quality defines their success in the eyes of their customers according to a recent IQMS survey, What Drives Growth In Manufacturing? (free, PDF, opt-in). Capturing and quantifying lessons learned from internal audits is turning into a new type of Voice of the Customer program for manufacturers, essential for enabling faster, more profitable growth.
- Mobile-enabled production scheduling, manufacturing execution, and fulfillment applications are giving production teams what they need to respond to customers in real-time. Manufacturers are winning the majority of up-sells and cross-sell deals can respond the fastest with the complete data on the status of shipments. Mobile-enabled ERP systems give manufacturers the power of knowing now what the customer needs to make a decision. Quick, complete responses are what customers expect. Exceeding those expectations using mobile-based ERP systems is a quick way to win both upsell and cross-sell sales.
- Relying on real-time monitoring to achieve higher levels of compliance and traceability by receiving data directly from any machine on the shop floor in real-time. Given the rapid advances in PLC-based monitoring and Machine to Machine (M2M) interfaces, it’s possible to capture real-time data on metrics and Key Performance Indicators (KPIs) of interest. Collecting data across the shop floor in real-time and looking for patterns, trends and predictive insights from the foundation of Manufacturing Intelligence. It’s possible today to capture item number, manufacturing number, work order details, lot numbers, date, time and additional KPIs to make traceability one of the strongest aspects of a manufacturing operation.
- Manufacturers are replacing manually-based inventory management systems with enterprise-wide ERP platforms that provide mobile inventory tracking, traceability and reporting platforms that scale as they grow. 81% of CEOs see mobile technologies as being strategically important for their enterprises according to a recent PwC survey. An aerospace manufacturer producing mid-range personal and commercial aircraft is using an enterprise-wide mobile inventory tracking, traceability, and reporting system. This manufacturer has worked so closely with the Federal Aviation Administration (FAA) they can now report production status to the work instruction level electronically, saving thousands of hours a year in government-mandated reporting paperwork. Mobility is saving this manufacturer for thousands of hours and dollars a year.
