IT Helps Manufacturing Companies Weather Economy

IT investments have given manufacturing companies the ability to respond quickly to the turbulent economic conditions over the last several years. Access to true data visibility allowed them to make quick decisions based on facts, rather than a ‘gut feel’. This has resulted in greater financial success for these companies and poised them for a smoother transition into a recovered economy.

A recent article by Emily-Sue Sloane on managingautomation.com details this success from a report from analyst firm IDC Manufacturing Insights. Vice President of Research, Bob Parker noted that, “Technology has changed the game for manufacturers in fundamental ways.” The article goes on to note that,

“In the past decade, technology trends such as virtualization, ERP consolidation, and business intelligence/analytics contributed to business’ agility and helped to bring down the cost of IT as a percentage of revenue, from 3.7% at the end of the last decade to 2.3% now, on revenue that doubled over those 10 years. IDC anticipates a progression to other economical technologies, such as cloud computing, virtual ERP, and something IDC calls “socialytic applications”, a combination of collaboration technologies and analytical tools.”

IDC expects to see new strategies gain momentum, including strategic outsourcing, shared capacity, and collaborative innovation. IDC also anticipates that manufacturers will turn to more sophisticated sales & operations planning processes to better balance supply and demand.

Below are the top 10 predictions for Global Manufacturing:

#10: Armed with metrics, manufacturers will move from sustainability reporting to intelligence.

#9: Smart services and the need for persistent assets will create the inflection point for RFID, sensors, and M2M.

#8: Firms will create intelligent fulfillment capabilities networks.

#7: Manufacturing companies will see factory assets as part of a fulfillment capabilities network.

#6: Manufacturing companies will become more mature in their use of enterprise PLM applications.

#5: Manufacturers will look to better align innovation with business strategy.

#4: “Dynamic optimization” will dominate capability investment to support redefining the supply chain.

#3: Manufacturing companies will begin the process of fundamentally rethinking their supply chain structures, evolving from a fixed-cost-driven supply network to a variable-cost-driven value network.

#2: IT organizations will look for cost structures that are more variable as they assist in making technology a focal point of business strategies.

#1: Companies will transform business models to better meet the needs of increasingly demanding customers.

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