Opinion

Extracting More Value from Machine Data & Manufacturing Intelligence Among Top IT Priorities for Manufacturing Cos: dynamicCIO Survey

Manufacturing has entered a new era with Industry 4.0. As the transformation at its core drives manufacturing organizations to deploy digital technologies such as IoT, AI, cloud, AR/VR, etc. the focus is shifting to the underlying factor driving it all – data.

According to a survey conducted by dynamicCIO on the state of digital adoption in the manufacturing sector, getting more value from machine-generated data and enabling manufacturing intelligence is among the top 3 priorities for IT in manufacturing organizations in 2019.

The survey, which was conducted among India’s leading manufacturing organizations, received responses from 73 CIOs/CTO/CDOs and senior IT decision makers from these organizations.

Getting More Value from Machine Data and Other Top IT Priorities

With almost 50% of survey respondents citing it among their top 3 priorities, the jury is out on the growing value of data for manufacturing companies and how this data can be leveraged for building intelligence and data driven decision-making within the organization.

Generating and analyzing data to enable manufacturing intelligence underpins the whole philosophy of Industry 4.0. In fact, McKinsey broadly describes Industry 4.0 as “digitization of the manufacturing sector, with embedded sensors in virtually all product components and manufacturing equipment, ubiquitous cyber-physical systems and analysis of all relevant data.”

As huge torrents of data from sensors and manufacturing processes is getting generated, organizations are now attempting to draw insights from this data and leverage it for enhancing machine efficiency, preventive maintenance, improving safety processes, production and product quality control, production planning, product customizations, etc. The list can be endless. Needless to say data, for manufacturing CIOs data represents a massive opportunity in 2019.

Interestingly, the other two of the top 3 priorities cited by the survey respondents are aligned with the data priority. These include IT-enablement of production and service (51%)?and improving data security/privacy and compliance reporting (49%). While IT-enablement of production is the foundation for enabling machines to generate data in the first place, security/privacy and compliance is the key when it comes to protecting the data that these manufacturing organizations are generating.

Also worthwhile to note is IT’s other top priorities around revenue growth (41%) and better supply chain visibility and collaboration to reduce costs (45%) in 2019 – indicating the growing focus for the CIO office around bringing real business value to the table in the form of revenues growth or cost reduction rather than just incremental process efficiencies.

What are the top 3 priorities for IT in your organization?

 

(Source: dynamicCIO Survey)

IoT and Cloud Top Technologies Deployed in 2018 and Planning in 2019

The survey findings around the three top technologies that manufacturing organizations deployed in 2018 and/or planning for 2019 are quite in sync with their top IT priorities. As per the survey findings, almost 58% of manufacturing CIOs have deployed IoT in 2018 or planning to deploy it in 2019. This is not surprising considering that IoT is the means for generating the data that will go into building manufacturing intelligence.

What’s really interesting is that an equal number of manufacturing CIOs (58%) have deployed cloud or planning to do so in 2019. This includes, public, private and hybrid cloud models. The high traction towards cloud can be a result of the growing focus around bringing in agility and flexibility to experiment with new projects and business models as well as seamlessly connecting with the extended ecosystem of suppliers and distributors for better collaboration.

In comparison, lesser number of organizations (36%) have deployed or planning to deploy Artificial Intelligence (AI)/Machine Learning (ML) in 2019, even below technologies such as mobility (45%) and Robotic Process Automation (40%) This can be explained by the fact that to build AI/ML you need the data first. Thus, collecting data is the first step and AI/ML is a natural progression to that. As most of the Indian manufacturing organizations currently in the phase of data collection, we see greater traction towards IoT in comparison to AI/ML.

What this also means is that the organizations that are currently investing in IoT and collecting data will naturally progress towards deploying AI/ML another year down the line to get meaningful insights from the data they have collected. Therefore, one can expect far greater investments going into AI/ML in the year 2020. This also means higher progression on the digital maturity curve for Indian manufacturing organizations.

Name three top technologies that you deployed in 2018 and/or planning for 2019?

(Source: dynamicCIO Survey)

Data Security and New Technology Integration Challenge CIOs

With data being the focus, it is no surprise that dealing with data security issues and balancing it with accessibility emerged among the top 2 challenges that CIOs of manufacturing organizations face. The more the data generated, the greater the vulnerability. As CIOs try to cope up with managing the torrents of data they have started collecting, the key will lie in formulating a strong data security and privacy framework supported by apt cybersecurity technologies to prevent any data breach or leakage.

Another challenge that manufacturing CIOs are dealing with are the challenges arising out of integration of old technology with new. The move towards Industry 4.0 is leading to automation of the existing systems, including the old legacy industrial and operational systems. Mostly while integrating IT (Information Technology) with OT (Operational Technology) is where a lot of challenges around making the legacy systems work with new technologies arise. For instance, while the new plant equipments today come embedded with IoT sensors, the old equipments require integration with IoT to be able to generate the required data. A good partner ecosystem that can help integrate old technology with new will be highly valuable.

What are the top 2 challenges you face as the CIO of a manufacturing organization?

(Source: dynamicCIO Survey)

CIOs are Digital Owners

With digital undoubtedly the future for the manufacturing industry, what’s really heartening to see is the decisive and pivotal role that IT is playing in shaping up this future. Almost 66% of the CIOs surveyed play a leadership role in developing their organization’s digital strategy, with only 19% playing the role of an adviser and another 11% playing the role of a partner.

At least in the Indian manufacturing sector, the jury is out on the debate as to who should lead digital in the organization – business leaders or CIO? And, the answer from our survey findings unequivocally point towards the CIO.

What is your role in developing your organisation’s digital strategy?

(Source: dynamicCIO Survey)

As Indian manufacturing organizations make real progress in their digital transformation journey, the year 2019 will be pivotal for CIOs in determining how digital can help solve complex problems of manufacturing, move towards complete value chain transformation and create smart manufacturing processes.

(Image Courtesy: www.e3zine.com)

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