Executive Briefings

'Smart' Manufacturing Boosts Bottom Line, Report Finds

The venerable factory is an important competitive weapon in the digital economy, according to Smart Manufacturing - The Path to the Future Factory, a report from research firm IDC Manufacturing Insights.

"Smart manufacturing programs can deliver financial benefits that are tangible and auditable," says Robert Parker, group vice president. "More importantly, smart manufacturing transitions the production function from one that is capacity-centric to one that is capability-centric - able to serve global markets and discerning customers."

Manufacturing, specifically the processes involved in physically transforming materials into goods for sale, is becoming quite fashionable. Not more than 10 years ago, many companies considered their factories deadweight, assets to be arbitraged, while new production moved to low-cost regions, particularly the Far East. A variety of factors has changed the perception of manufacturing. What has emerged is a construct referred to as smart manufacturing. At its core, smart manufacturing is the convergence of data acquisition, analytics and automated control to improve the overall effectiveness of a company's factory network.

Key findings of the report include:

• Use the overall equipment effectiveness (OEE) equation to understand the potential benefits, and tie those benefits to financial metrics such as revenue, costs and asset levels to justify investment.

• Broaden the OEE beyond individual pieces of equipment to look at the overall impact on product lines, factories, and the whole network of production facilities.

• Technology investment can be separated into capabilities related to connectivity, data acquisition, analytics and actuation.

• A unifying architecture is required to bring the technology pieces together.

• Move toward an integrated governance model that incorporates both operation technology and information technology resources.

• Choose an investment cadence based on the level of executive support for smart manufacturing.

The full report is available from the IDC Manufacturing Insights web site.

Source: IDC Manufacturing

"Smart manufacturing programs can deliver financial benefits that are tangible and auditable," says Robert Parker, group vice president. "More importantly, smart manufacturing transitions the production function from one that is capacity-centric to one that is capability-centric - able to serve global markets and discerning customers."

Manufacturing, specifically the processes involved in physically transforming materials into goods for sale, is becoming quite fashionable. Not more than 10 years ago, many companies considered their factories deadweight, assets to be arbitraged, while new production moved to low-cost regions, particularly the Far East. A variety of factors has changed the perception of manufacturing. What has emerged is a construct referred to as smart manufacturing. At its core, smart manufacturing is the convergence of data acquisition, analytics and automated control to improve the overall effectiveness of a company's factory network.

Key findings of the report include:

• Use the overall equipment effectiveness (OEE) equation to understand the potential benefits, and tie those benefits to financial metrics such as revenue, costs and asset levels to justify investment.

• Broaden the OEE beyond individual pieces of equipment to look at the overall impact on product lines, factories, and the whole network of production facilities.

• Technology investment can be separated into capabilities related to connectivity, data acquisition, analytics and actuation.

• A unifying architecture is required to bring the technology pieces together.

• Move toward an integrated governance model that incorporates both operation technology and information technology resources.

• Choose an investment cadence based on the level of executive support for smart manufacturing.

The full report is available from the IDC Manufacturing Insights web site.

Source: IDC Manufacturing