IDC Manufacturing Insights, Predictions for Manufacturing
Simon Ellis, Robert Parker and the rest of the gang at IDC offered these 10 predictions for manufacturing for 2014:
Prediction #1: Manufacturers Will Begin to Build 3D Value Chains
Prediction #2: Operational, Information, and Consumer Technology Will Converge to Reshape Approaches to Technology Management
Prediction #3: Operational Resiliency Will Be the Focus of Supply Chain Strategies in 2014 and Beyond
Prediction #4: Supply Chain Technology Investment Will Involve Modernizing Existing Systems While also Trying New Approaches
Prediction #5: The Modernization of the Underlying B2B Commerce Backbone Will Become an Investment Priority for IT
Prediction #6: Product Life-Cycle Management Strategies Will Become Increasingly Global, Multidisciplinary, Innovation Based, and Customer Focused
Prediction #7: PLM Initiatives Will Focus on Value Realization
Prediction #8: "Servitization Optimization" Will Be Core to Future Profitable Revenue Growth, and Leading Manufacturers Will Make the Necessary Investments to Enable These Strategies
Prediction #9: On Its Way Toward the Factory of the Future, 2014 Will Set the Stage for a New Manufacturing Renaissance
Prediction #10: Plant Floor IT Investments Will Continue to Become a Higher Share of the Overall Technology Investment Portfolio
We'll first offer the drill down on prediction no. 3, relative to renewed focus on resiliency:
In last year's predictions, we talked extensively about the need for supply chain resiliency in the context of both internal and external challenges. Indeed, the pressures on supply chains to deliver in an increasingly demanding world come from both external and internal sources.
Yet what we found as the year progressed was that, yes, manufacturers do aspire to resiliency but are not always sure where to focus and when to begin. It became apparent that the road to resiliency is a multiyear journey that will inform supply chain strategies for years to come. Certainly strategically, in 2013, many manufacturers began the process of determining the "what"; and we expect manufacturers in 2014 to begin to consider the "how" and the "when."
While the notion of operational resiliency will inform many of the remaining predictions for 2014, its underpinning is rooted in the extreme granularity of data (both upstream and downstream), the increasing need for "accurate" speed in the supply chain, and operational visibility into supply and demand. In detail:
Extreme granularity. While the notion of big data is well established, the operational ability of the supply chain to both sift through available data and convert data into an actionable, timely response is critical - and this is where the value lies. Many manufacturers have told us that they don't fully leverage data they know within the business, let along that which exists outside the business. The ability to be operationally resilient requires tapping into all of these potential sources of insight.
Accurate speed. It is not enough for manufacturers to be fast, they must be fast and accurate, delivering the right set of products and services, just more quickly. The lack of resiliency will hamper the ability of the business to both anticipate problems and react quickly to mitigate these problems.
Operational visibility. There is an old saying that "if you don't measure it, you can't improve it"; well, with regard to visibility, "if you can't see it, you can't react to it." Disruptions of any kind are easier to manage if you have some advance warning - not to mitigate necessarily but to react quickly and take advantage of limited alternative. Operational resiliency is the "early bird."
Next, more detail on prediction no. 9, on a manufacturing renaissance:
The manufacturing industry - and production processes in particular - is back on stage as a source of wealth, particularly in developed economies. Over the past 10-15 years, the manufacturing industry was "neglected" with respect to other industries such as finance and services. Today, a number of countries around the world are investing to develop and attract more manufacturing.
President Obama's key second-term strategy was based around reviving American manufacturing. In 2013, the National Network for Manufacturing Innovation has been created, consisting of regional hubs that will accelerate development and adoption of cutting-edge manufacturing technologies for making new, globally competitive products.
China has become the largest world market for robots and production automation, which will help China better manage raising wages and guarantee higher product quality.
The European Commission has enforced policies to raise the GDP share of manufacturing from today's historical low of 16% to 20%. Germany, with its 21% of GDP from manufacturing, is leading the way toward designing the future of manufacturing through the "Industrie 4.0" initiative that defines the "fourth industrial revolution" as highly automated and based on the use of "cyberphysical" systems (i.e., sensors-enabled systems that can intelligently communicate through the Internet of things).
With greatest attention from governments and a better business outlook expected in 2014, the manufacturing industry is entering into a new phase of renaissance. Among the trends that will be evident in 2014:
With manufacturing becoming an essential source of wealth, global economies - both developed and emerging countries - will fiercely compete to develop and attract high-end manufacturing capabilities in industries such as aerospace, industrial machinery and equipment, semiconductors, specialty chemicals, and pharmaceutical.
Aging workforce, unattractiveness of plant floor workplace, and the lack of skilled resources in the marketplace will be emerging as top challenges. A battle among manufacturing companies to retain and attack the best skills will be evident, particularly for production engineering and manufacturing operational skills.
Manufacturers will continue their journey toward the people-intensive factory of the future. During 2014, manufacturers will be busy making their factories more resilient and improve plant floor visibility. The end goal is making those factories faster to align themselves with the speed of the marketplace.
During 2014 and beyond, manufacturers will primarily invest in:
• Standardizing production processes across their network of factories and create better visibility, coordination, and orchestration
• Better coordinating plant floor operations by collating all operational processes under a common orchestration approach
Hope you enjoyed this year's analysts predictions.
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