Driving manufacturing efficiency in a world of disruptive technology

While technology can be beneficial and necessary, the key to success will be the ability to distinguish between what is new and what is useful. This eBook provides expert insight and real-life examples of how to best leverage technology to increase efficiency.

IFS
IFS
DRIVING MANUFACTURING EFFICIENCY IN A WORLD OF DISRUPTIVE TECHNOLOGY TABLE OF CONTENTS DRIVING MANUFACTURING EFFICIENCY IN A WORLD OF DISRUPTIVE TECHNOLOGY 3 THE COMPELLING METRICS YOU CANNOT IGNORE 4 LATEST INSIGHTS FROM IFS RESEARCH 5 LOOK FOR THE OBVIOUS – AND WORK WITH EXPERTS 6 HOW NEC LEVERAGED GLOBAL ERP TO GAIN A COMPETITIVE EDGE 7 WHAT’S NEXT FOR YOUR BUSINESS? 9 IFS SOFTWARE FOR THE INDUSTRIAL MANUFACTURING INDUSTRY 10 MEET OUR INDUSTRY EXPERTS 11 Source: IFS Digital Transformation Survey 2016 DIGITAL TRANSFORMATION HOW IMPORTANT IS IT? Global industry views on the importance and relevance of digitization vary between industry around the globe. It’s worth asking yourself what sort of impact you think it might have for your business. IFS DIGITAL TRANSFORMATION SURVEY 2016 THANK YOU TO ALL WHO PARTICIPATED! NEARLY 500 SENIOR BUSINESS DECISION MAKERS FROM 20+ COUNTRIES GIVE THEIR VIEWS ON DIGITAL TRANSFORMATION DIGITAL TRANSFORMATION REGIONAL SPLIT ON WHAT ROLES ARE CONSIDERED TO BE RESPONSIBLE FOR DIGITAL TRANSFORMATION IN VARIOUS COUNTRIES WHO IS RESPONSIBLE? The nearly 500 decision makers consider these roles to be responsible for digital transformation CEO 39% CIO 40% CTO 20% CFO 35% CMO 6% OTHER C-LEVEL OTHER NON C-LEVEL DON’T KNOW18% 9%24% DIGITAL TRANSFORMATION: WHO IS RESPONSIBLE? ME 56% CIO 22% CTO 22% CFO 56% CMO 0% THE CIO’S VIEW THE CFO’S VIEWTHE CEO’S VIEW ME 63% CEO 38% CTO 19% CFO 25% CMO 16% ME 69% CEO 44% CIO 38% CTO 3% CMO 9% DIGITAL TRANSFORMATION RATING OF HOW IMPORTANT THESE TECHNOLOGIES ARE IN DRIVING DIGITAL TRANSFORMATION 59 42 48 45 37 53 55 59 IoT 3D Printing Wearable tech AR/VR Drones Machine learning Cognitive computing Cloud DIGITAL TRANSFORMATION HOW IMPORTANT IS IT? Digital transformation is just a buzz word Digital transformation will play a key role in my market in the coming five years I need to know more about digital transformation My company has a clear strategy for digital transformation Strongly agree Somewhat agree Somewhat disagree Strongly disagree 30% 76% 59% 86% Agree GLOBAL ASEAN AUSTRALIA BENELUX BRAZIL CHINA FINLAND POLAND SCANDINAVIA USA CEO 39% 38% 31% 37% 51% 47% 37% 41% 38% 30% CIO 40% 21% 31% 22% 42% 53% 52% 57% 45% 29% CTO 20% 0% 9% 15% 57% 19% 19% 7% 13% 16% CFO 35% 17% 56% 56% 27% 38% 26% 36% 32% 42% CMO 6% 0% 0% 11% 4% 6% 15% 2% 7% 6% OTHER C-LEVEL 24% 13% 22% 11% 42% 16% 19% 34% 15% 27% OTHER NON-C-LEVEL 18% 8% 25% 41% 8% 6% 7% 20% 12% 39% DON’T KNOW 9% 29% 9% 7% 0% 6% 15% 2% 15% 8% 2 There are some notable global discrepancies within the sector: • North America and APAC are leading the charge on using data-driven insight to deliver a competitive edge • Globally, bigger businesses are further ahead with adopting new technologies than smaller ones At the same time, some challenges are ubiquitous. There is a perceived shortage of talent across both technical skills and digital competence. Finally, businesses report that legacy systems and the requirement for manual reconciliation between management information systems have a negative impact on efficiency. If you are not yet on the route to transitioning, you need to find an expert who understands the sector and its challenges with a comprehensive view of what’s next for the industry. Disruptive technologies are causing companies of all sizes throughout the global manufacturing industry to realign their business and operational models. Recent research shows that 55% of businesses globally have already transitioned to Industry 4.0, ushering in the age of what is known in the US as “Smart Manufacturing.” DRIVING MANUFACTURING EFFICIENCY IN A WORLD OF DISRUPTIVE TECHNOLOGY 26% Automation and the emergence of interconnected and intelligent manufacturing systems have become a game-changer for the industry. ITERATIVE TECHNOLOGY INTERNET OF THINGSROBOTICSSENSORS BIG DATA MACHINE LEARNING IOT 26% of businesses yet to adopt Industry 4.0 or Smart Manufacturing say they will transition by 2020. 3 THE COMPELLING METRICS YOU CANNOT IGNORE It is essential to continually analyze and assess the global manufacturing landscape to remain competitive. The speed of change is significant and the numbers of competitors embracing change are substantial. The scope of the insight is daunting: 76% of manufacturers will increase use of smart devices or embedded intelligence in manufacturing processes in the next two years 63% of manufacturers have either implemented or are planning to integrate IoT technologies into their products The number of smart machines used in manufacturing will double in the next three years 58% of manufacturers say that they are improving product quality by incorporating smart devices or embedding intelligence 50% of the fastest growing companies will have more smart machines than employees by 2018 50%63% 76% 58% ×2 Internal process efficiencies Accelerating innovation Cost savings Competitive differentiation/advantage Increased competitive pressure 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% TOP FIVE DRIVING FACTORS FOR DIGITAL TRANSFORMATION 4 Insight from new research into attitudes towards digital transformation in manufacturing, commissioned by IFS from Raconteur Custom Publishing, shows the industry has a strong appetite to invest in digital technologies: LATEST INSIGHTS FROM IFS RESEARCH The number one driving factor behind digital transformation in the manufacturing sector is “internal process efficiencies”, but surprisingly… While 55% of businesses questioned had already transitioned to smart manufacturing and Industry 4.0, 49% reported that they were “averse to change” Nearly half of all business said they had a talent deficit in artificial intelligence and robotics, but in smaller companies, this rose to 61% – the response of 71% of all companies will be to upskill the existing workforce Data-driven insight is utilized by 58% of manufacturers, but they report it is “not yet a competitive advantage” 71% 58% 49% TOP FIVE CAPABILITIES IDENTIFIED FOR INVESTMENT BIG DATA AND ANALYTICS 43% 3D AND 4D MODELLING (e.g. BIM) 36% ARTIFICIAL INTELLIGENCE 32% ROBOTICS AND AUTOMATION 31% ENTERPRISE RESOURCE PLANNING (ERP) 31% Full details of the Raconteur Custom Publishing industrial manufacturing research into digital transformation are available from ifs.world/dcs-im 5 LOOK FOR THE OBVIOUS – AND WORK WITH EXPERTS Software development and enterprise resource planning (ERP) are not a skill- set held within many businesses in the manufacturing sector. Globally, the industry is seeking to outsource to third parties for best-practice advice but, against a landscape of ever-shifting opinions, it is increasingly difficult to identify and isolate true and sustainable expertise that understands both the industry and the individual challenges of a digitally-enabled world. Senior management needs to deal with complexities and develop agile policies to take advantage of change as it happens. To be equipped for this, they need external experts to look at required change, the scale of change and the speed of change while the business goes about doing ‘the day job.’ Not surprisingly, our research showed the sector has a strong appetite for recruiting external expertise and has identified three particular high-value competencies: Areas of greatest value offered by third-parties PERFORMANCE ANALYTICS AND REPORTING 38% DIGITAL STRATEGY31% DIGITAL ORGANIZATION AND OPERATIONS 43% 6 CONT... HOW NEC LEVERAGED GLOBAL ERP TO GAIN A COMPETITIVE EDGE NEC Corporation is a Japanese multi-national provider of information technology services and products to businesses, communication services providers and government agencies. The company has nearly 110,000 employees worldwide and produces a range of products. I F S C U S T O M E R S T O R Y Legacy business processes were different across the business, which caused an issue – standardizing them to maximize the synergy effect and consolidate our assets in a short period of time was our big challenge. Mr. Koji Saga | Senior Manager, Supply Chain Management Division of the System Platform Business Unit Looking for a global ERP package to help visualize quality, cost and delivery throughout the company, while ensuring increased efficiency and earnings, NEC turned to IFS, a company whose culture fit perfectly with theirs. The project objectives were to increase revenue, improve quality and optimize the supply chain through production processes, taking these tasks globally. Several experienced members from the IFS group at NEC joined the project, the quality of IFS Applications being proven by the fact that there were no critical problems after go-live. The excellent fit between IFS Applications and NEC processes1 It was easier to integrate with NEC’s financial systems2 NEC already had significant IFS expertise internally3 Success was highlighted in three areas: 7 HOW NEC LEVERAGED GLOBAL ERP TO GAIN A COMPETITIVE EDGE I F S C U S T O M E R S T O R Y A good fit Today, NEC is more than a valued IFS customer. The Japanese leader in IT products and services is also an important technology partner. The companies have worked hard to build out NEC’s leadership in key industry areas, where IFS Applications and open architecture enable NEC to develop additional functionality and reduce total cost of ownership. An important complementary element is IFS’s global presence and ability to support NEC anywhere in the world, enabling them to work confidently with a single-core ERP system. Achieved benefits What we have achieved with this project is standardized Build-to-Order (BTO) pooling skills. Knowledge and expertise to create mutual business advantage is a characteristic of the successful partnership that NEC Corporation and IFS have built together since 1998. Mr. Koji Saga | Senior Manager, Supply Chain Management Division of the System Platform Business Unit Benefits delivered: Support for all core processes Engineering- manufacturing interface to convert E-BOM into M-BOM Standardized business processes for BTO, MTO and MTS Smooth implementation, problem-free go-live NEC DISCUSSES GLOBAL ROLLOUT OF IFS APPLICATIONS Download customer story PDF (0.1 MB) 8 Organizations will need to adapt business processes, adopt skills and change business systems to support agile service-based digital strategies. At the same time, most businesses are increasingly making the move towards a service-based culture – if only to keep pace with perceived market trends and remain competitive. Whether Industry 4.0/Smart Manufacturing will actually drive a “Fourth Industrial Revolution” remains to be seen. However, it will bring about a technology shift from mass production to mass customization, enabled by full digital threads from design to production systems. WHAT’S NEXT FOR YOUR BUSINESS? IFS has been at the forefront of investing in IoT connectivity in order to align its position with existing capabilities. In doing so, it can help eliminate the uncertainties, mitigate the risk, help you embrace opportunities and change and keep you competitive. As our research shows, the degree of change varies: THE JOURNEY TO SERVITIZATION Servitization is well-established and is already paying dividends The move to servitization is in progress and is receiving appropriate executive attention and support The move to servitization is underway but we’re not seeing the desired progress and greater executive support is required Servitization is a priority item on the executive agenda for 2017 Servitization is not a near-term strategic priority Servitization is not applicable to my company 9 Manufacturers are looking to embrace digital technology benefits with Smart Manufacturing and Industry 4.0. With IFS’s software solutions, businesses can do just that. IFS SOFTWARE FOR THE INDUSTRIAL MANUFACTURING INDUSTRY IFS APPLICATIONS IFS Applications is single, integrated application suite for global and demanding business. It provides best-in-class support for industrial manufacturing, process manufacturing, discrete manufacturing and demanding manufacturing modes. IFS ENTERPRISE RESOURCE PLANNING IFS Enterprise Resource Planning is designed to rapidly adjust to changes in technology and business. With powerful embedded functionality that extends into other crucial areas of your manufacturing business, it includes everything you would expect from a tier one ERP software suite. IFS IOT BUSINESS CONNECTOR Good strategies increase revenue, boost profits and enhance efficiency. Build your IoT strategy around the IFS IoT Business Connector and see how your manufacturing company’s operational data becomes business intelligence and how business processes become more efficient. IFS CLOUD SOLUTIONS Run IFS enterprise software your way. IFS cloud solutions allow you to choose where it’s run, how it’s maintained and how you pay to license and use it. By leveraging IFS Cloud solutions on Microsoft Azure, you benefit from enterprise grade services and worry-free Azure security compliance. 10 MEET OUR INDUSTRY EXPERTS Whether it is a matter of digital transformation or servitization, or both, senior management needs an expert to help plot business strategies operationally and culturally throughout the entire organization. In a world of uncertain futures, choosing the right industry experts to work with has never been so important. It has also never been so difficult. IFS has a heritage in working with manufacturing business on a national, multi-national and global scale to develop the integrated operational and cultural models they need to survive and thrive in a disruptive world. ANTONY BOURNE Global Manufacturing Industry Director Wherever your business is on its digital transformation journey, why not speak to our team? Antony has over 20 years’ experience in the IT industry, including working in the manufacturing sector. Before joining IFS in 1997, he held Business Analyst positions with Ford Motor Company and AlliedSignal. During this time, he implemented ERP applications as well as business process improvements. As the Global Industry Director for Industrial Manufacturing at IFS, Antony’s responsibilities include supporting sales, marketing and partners, speaking at industry conferences, as well as owning the industry road-map to ensure the strategy and needs of manufacturing are met both today and tomorrow.SCHEDULE A MEETING FORMULATE & COMMUNICATE INSIGHTS INDUSTRY COLLATERAL INDUSTRY STRATEGY INDUSTRY SOLUTION DEVELOPMENT INDUSTRY ORGANIZATION ADVISORY COUNCILS CUSTOMER PARTNERING INDUSTRY RESEARCH Thought leadership Bu sin es s d eve lopm ent Solution influence INDUSTRY ACTIVITIES 11 12 IFS develops and delivers enterprise software for customers around the world who manufacture and distribute goods, maintain assets and manage service- focused operations. The industry expertise of our people and solutions, together with commitment to our customers, has made us a recognized leader and the most recommended supplier in our sector. Our team of 3,300 employees supports more than one million users worldwide from a network of local offices and through our growing ecosystem of partners. 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