- Worldwide manufacturers will spend an estimated $323B on external IT expenditures in 2016.
- Manufacturers making the most of their customer-centric IT investments will gain 2 – 3% more market share over competitors.
These and other insights are from IDC FutureScape: Worldwide Manufacturing 2016 Predictions published last month. IDC subscribers can gain access to the entire document here. IDC’s analysts combined primary and secondary research, discussions with clients, colleagues, and experts on manufacturing IT spending and investments in defining these top ten predictions. For an excellent analysis of IDC’s top technology predictions for 2016, please see fellow Forbes contributor Gill Press’ analysis Transform Or Die: IDC’s Top Technology Predictions For 2016.
The following graphic compares the top 10 manufacturing predictions by predicted time for each prediction to reach mainstream adoption. The size of the bubble indicates the complexity/cost to address.
IDC Manufacturing Predictions and key takeaways include the following
- Prediction 1: By the End of 2017, Those Manufacturers That Have Leveraged Customer-Centricity Investments Will Gain Market Share Growth in the Range of 2–3 Percentage Points. The future of manufacturing is being defined more by companies willing to deal with the tough decisions about investing in IT to become more responsive to customer needs. A big part of the customer-driven revolution in manufacturing is happening in Quote-to-Cash (QTC), and Configure-Price-Quote (CPQ), two areas manufacturers, continue to invest in heavily. Cloud-based providers can scale quickly to meet manufacturers’ multisite requirements including Apttus, who is a global leader in both the cloud-based QTC and CPQ markets, and Plex Systems who excels at multisite and two-tier Cloud ERP strategies.
- Prediction 2: In 2016, 90% of Manufacturers Will Impose Their Global Standards on All Operations, Including Outsourced Operations, and Suppliers, to Decrease Risk and Increase Market Opportunities. Part of these standards will include quality management data which is isolated, even siloed, in many production centers. Inbound inspection, audit, CAPA (Corrective Action/Preventative Action), NC/CA (Non-Conformance/Corrective Action), outcomes of Six Sigma quality analysis, and many other forms of data rarely get outside of manufacturing and across the broader value chain of a manufacturer.
- Prediction 3: By the End of 2016, 65% of Manufacturers Will Have Metrics in Place to Evaluate and Drive Pervasive Changes in the Workplace with Their New Technology Investments. IDC predicts metrics associated with 3D printing productivity and security will become more pervasive in 2016. In addition to these, advanced analytics that can recommend which customized product configurations, service bundles, and pricing options are optimal for a given sales cycle will emerge, supporting by cloud-based platforms capable of providing analytics reporting on any device, anytime. Tableau will continue to see adoption accelerate in manufacturing as a result of the myriad of new metrics being created today and in 2016.
- Prediction 4: By 2019, 75% of Manufacturing Value Chains Will Undergo an Operating Model Transformation with Digitally Connected Processes That Improve Responsiveness and Productivity by 15%. Manufacturers need to pursue speed first and production scale second if they are going to compete and win new customers in 2016. From the largest B2C and B2B manufacturers to the smallest start-ups, choosing accuracy, responsiveness, and speed as the new cornerstones for improving customer-facing processes will be the key catalyst driving growth in 2016.
- Prediction 5: By 2019, 50% of Manufacturers Will Have Modernized Their Logistics Network to Leverage 3D Printing, Robotics, and Cognitive Computing to Support Innovative Postponement Strategies. Streamlining logistics networks by enabling greater use of 3D printing, robotics, and cognitive computing also needs to be anchored in a customer-driven quality, response, and service recovery Manufacturers who are early adopters have the potential to break through barriers that held them back from improving accuracy and increasing long-term customer loyalty. The General Electric Industrial Internet of Things initiative shows potential as a platform that could orchestrate these diverse technologies.
- Prediction 6: By the End of 2019, Enterprisewide Improvements in Resiliency and Visibility Will Render Short-Term Forecasting Moot for 50% of All Consumer Products Manufacturers and 25% of All Others. For manufacturers to attain this level of supply chain collaboration and orchestration by 2019, there’s going to need to be a compelling reason to move beyond existing The motivation will come from the race to stay relevant as manufacturers competing with greater insight and speed take market share and react faster than those that hold onto past forecasting techniques.
- Prediction 7: By 2018, 60% of top 100 Global Manufacturers Will Be Using a Product Innovation Platform Approach to Drive Enterprise Quality Throughout the Product and Service Life Cycles. According to IDC, a product innovation platform unifies product, manufacturing, supply chain, and service information, processes, and people thereby enabling decision support and collaboration across value chains, enabling higher product and process quality. IDC also contends that product innovation platforms will be justified based on the governance of full life-cycle quality and a superior customer experience.
- Prediction 8: By 2017, 40% of Large Manufacturers Will Use Virtual Simulation to Model Their Products, Manufacturing Processes, and Service Delivery to Optimize Product and Service Innovation. Providing customers with virtual models of products they are considering buying accelerates sales cycles. Leading manufacturers of engineer-to-order industrial products can translate virtual models into Bill of Materials (BOM) and process workflows today, streamlining production and making digital manufacturing a reality. Virtual simulations help process manufacturers gain efficiency, and discrete manufacturers meet customer requirements.
- Prediction 9: By the End of 2017, 50% of Manufacturers Will Exploit the Synergy of Cloud, Mobility, and Advanced Analytics to Facilitate Innovative, Integrated Ways of Working on the Shop Floor. IDC believes that companies will realize the short-term opportunity of using the cloud as the fabric to establish a companywide platform to analyzing data coming from the shop floor and converting it into actionable information for enterprise decision makers. Acumatica, Microsoft AX on Azure, NetSuite, and Plex Systems are cloud-based ERP providers who have experience scaling manufacturing operations starting at the shop floor. A few including Plex have analytics that support shop floor to top floor reporting.
- Prediction 10: In 2016, 20% of Manufacturers Will Begin to Break Down Organizational Silos, Reshape IT Portfolios, and Import New IT Talent in the Plant for Digitally Executed Manufacturing. IDC predicts that rigid, centralized factory control systems will start to give way to decentralized intelligence as machine-to-machine communications start to hit the factory floor. To support this transformation, IDC says that a new generation of technology-savvy and technology-empowered workers, with information available at their fingertips, will be needed.
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This article was written by Louis Columbus from Forbes and was legally licensed through the NewsCred publisher network.