The top business priorities for leading manufacturers
As global manufacturers grapple with how to employ a unified product and service innovation approach to best succeed in today's global economy, IDC Manufacturing Insights embarked on a survey to better understand manufacturers' product and service innovation methods, practices, and plans.
The results, highlighted in the new report, “2015 Product & Service Innovation Survey: Ensuring Quality is the Primary Goal,” reveal that the disciplines of Product Lifecycle Management (PLM) and Service Lifecycle Management (SLM) are evolving to become strategic business initiatives for leading manufacturers.
According to the report, manufacturers are moving away from investing in standalone engineering and service workgroup tools, and toward more strategic initiatives like product innovation platforms and service transformation in the coming years.
Manufacturers across value chains face competitive and market pressures, customer demand, and complex products and value chains that necessitate a broader approach to how products are designed, delivered, and serviced.
According to the new report, manufacturers are looking to integrate their enterprise systems, data, and processes, to leverage new models in mobile and cloud, and apply a virtual control panel of analytics to their product, supply, manufacturing, and service processes - all in the name of achieving high quality, innovative products.
“These are truly exciting times for manufacturers, users, and IT suppliers of product and service innovation technologies,” said Jeffrey Hojlo, Program Director, Product Innovation Strategies, IDC Manufacturing Insights.
“The complexity is massive on so many fronts: product, value chain, manufacturing, and service. Technologies exist today to address this complexity but the challenge (and opportunity for IT suppliers) is integrating them together as appropriate, providing an easy way for the user to manage, analyze, consume, and apply product and service information for innovation and competitive advantage.”
How manufacturers design, engineer, manufacture, and service products has changed dramatically in recent years, driven by multiple factors such as the increase in complex, "smarter", connected products, unique, dynamic demand from customers, and highly competitive markets particularly in emerging economies. No longer can manufacturers afford to manage their ideas, product data, quality information, and service processes in unique siloes spread across the enterprise; they must consider how to unify this information to satisfy customer demand, reduce development cycles, and improve response to quality and service issues.
“Clearly, manufacturers understand that one of the best ways to outpace the competition and expand into new markets is to focus efforts on innovation and deliver exceptional products to market that reflect customer demands,” added Heather Ashton, Research Manager, Service Innovation and Connected Products Strategies, IDC Manufacturing Insights.
“There is a desire to scope this in a way that reflects an efficiency and effectiveness to meet manufacturers' desires for organizational excellence. Additionally, manufacturers have prioritized expansion into new markets and new customer bases, with an understanding that some of the greatest potential for growth may exist beyond captive markets.”
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.