The importance of connectivity for smart manufacturing:
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Three reasons why connectivity cannot be an afterthought
Manufacturing companies are operating in an era of accelerated disruption and uncertainty.
It's not easy to be successful in the manufacturing world. We're in an era of accelerated disruption and a "new normal" characterised by continuous volatility and heightened uncertainty. In such times, with surging customer demand, faltering supply, an intensifying war for talent, and rising inflation, manufacturers need to deal with the immediate challenges but also not lose sight of the long term. Operations across a range of industries continue to be challenged by a myriad of issues, including supply chain disruptions, rising energy costs, talent constraints, and the pressure to improve their sustainability metrics.
Faced with today's business complexity, and the need to balance factory capability with volatile demand across elongated and dynamic supply chains, manufacturers need to harmonise, supervise, and coordinate execution activities across the company's and their suppliers' manufacturing operations — with greater real-time visibility. IDC defines smart manufacturing as the continuous process by which enterprises leverage cyber-physical convergence and digital skills to develop the production capabilities needed to compete in the modern economy.
The next five years will be transformational for operations as they find new and more effective ways to manage, analyse, and collaborate around operational data. The impacts go beyond the data itself to impact how decisions are made and who makes them.
IDC data shows that just over 30% of global manufacturers in Europe think they are mature in their factory initiatives.
There is still a long journey ahead, but there are many opportunities for those manufacturing companies that are willing to invest.
As companies progress on their smart manufacturing journey, we see three main reasons why connectivity can't be an afterthought and must be strategically planned and positioned alongside key factory investments.
IDC InfoBrief
Transform your factory with connectivity
Smart manufacturing is all about digitally connecting the manufacturing processes to drive operational excellence and innovation. Download today to discover a deep-dive into the strategic importance, and benefits, of leveraging intelligent connectivity to achieve information integration.
Equipment instrumentation and connectivity are growing, creating huge amounts of data
IDC estimates that over the next 12 months there will be a 23% increase in operational data (TB/day) produced by an average factory, reaching 320PB/year by the end of 2023. This vast volume of data is gathered, moved, processed, and acted on in a distributed environment to, from, and between clouds. To maximise the opportunities from this, the focus must be on a company’s digital infrastructure. This is because high bandwidth connectivity is essential to move large volumes of data around key points of the environment, quickly and reliably. Industrial companies need to address their network strategy to bridge user, compute, and store, handling massive data and distributed IT workloads.
5G will bring new connectivity features to support the smart manufacturing journey
5G technologies can seamlessly enable denser connectivity, higher data capacity and lower latency. In addition to site connectivity, 5G can provide local-area and wide-area connectivity for personnel, AGV, and IoT devices, with ultra-low latency and massive connection density where required and with guaranteed network performance enabled by network slicing. This enables several applications:
Connectivity is the centrepiece of the technology (r)evolution
A clear pattern is emerging when evaluating companies' investment strategies. The planned investments for operation technologies focus on building a cloud-based operational data layer enabling analytics and resting on solid connectivity and security components. This is a significant evolution over the previous generation of investments, where companies were mostly focusing on IoT, control systems, and connected machines. So, after a wave of investments dedicated to data creation, companies have moved toward information integration. Therefore, connectivity's strategic relevance is directly correlated with smart manufacturing maturity.
IDC InfoBrief
Transform your factory with connectivity
Smart manufacturing is all about digitally connecting the manufacturing processes to drive operational excellence and innovation. Download today to discover a deep-dive into the strategic importance, and benefits, of leveraging intelligent connectivity to achieve information integration.
Connectivity is a mission-critical element for Smart Manufacturing
IDC research highlights that for companies that view smart manufacturing as the strategic initiative and the gateway for process and business model innovation within the organization, connectivity is the underbelly of information flows and a mission-critical element in factory success. On the other end, when connectivity is based on machine requirements and no organic strategy is in place or connectivity is simply an afterthought, often no strategic vision exists for smart manufacturing. The short-term focus is on preserving existing methods and practices.
To progress through the stages, companies should focus not on the technology per se, but on how technology enables information management.
It is important to note that equipment and technology do not make as much difference as the ability to use information effectively to support business processes. To this end, organisations should keep the right focus on what matters while building the infrastructure for smart manufacturing. The strategic importance and benefits of connectivity to achieve information integration are maximised when connectivity takes centre stage.
Reaping the benefits: Connectivity in action to deliver value-added use cases in Smart Manufacturing
In our previous section, we talked about how connectivity can revolutionise the way data and information flows across the shop floor by not being an afterthought but a key element of smart manufacturing strategy.
As connectivity is a key element in bringing together all the technology opportunities that digital transformation provides on the shop floor, we have identified several key use cases to outline how connectivity can help deliver business value in the factory. It's worth noting that each use case demands a different location of workloads, including M2M, edge, and cloud. These locations need to be managed in synergy to create the best value for the business, and to achieve this an effective interplay between WAN and LAN connectivity is central.
It is not just about optimising existing processes but transforming the way factories are run — creating new compelling use cases that have to do with asset management, analytics, and ultimately running the processes more efficiently. Companies that have made the journey are already reaping the rewards.
We have monitored a number of deployments across these scenarios, and the main areas of improvement we have witnessed have been around a reduction in scrap, defects, and laboratory failures in quality management. In production, throughput and productivity are boosted thanks to unscheduled asset downtime or outages, energy cost per unit, and safety incident reduction, paired with an increase in the speed of changeovers and improved overall inventory visibility.
With industrial connectivity, the benefits are there, competitors are investing, and technology is mature. As manufacturers become increasingly sophisticated in their use of technology, what is "nice to have" increasingly becomes "must have," and ambitious companies should review their connectivity foundation to make sure it's ready to support increasing amounts of digitally enabled assets and processes.
IDC InfoBrief
Transform your factory with connectivity
Smart manufacturing is all about digitally connecting the manufacturing processes to drive operational excellence and innovation. Download today to discover a deep-dive into the strategic importance, and benefits, of leveraging intelligent connectivity to achieve information integration.
Challenge the challenges: Debunking three myths about connectivity on the shop floor
In our previous sections, we talked about connectivity being a central element and mission-critical for manufacturers on their journey toward smart manufacturing. Industrial equipment is at the centre of a convergence of technologies enabling the next wave of productivity gains. This is particularly relevant now, as more equipment is "smart," enabling improved connectivity and edge computing. The opportunity for improved equipment uptime has now become a reality. Factory networks will need to be able to cope with the data flows coming from the various pieces of equipment.
We also talked about building compelling use cases to not just optimise existing processes but transform the way factories are run and how each use case demands a different location of workloads, including M2M, edge, and cloud. These locations must be managed in synergy to create the best value for the business. WAN and LAN connectivity is central to this, as it can revolutionize the way data and information flows across the shop floor.
The proliferation of natively connected machines and the Internet of Things (IoT) is creating an unprecedented data explosion in the operations technology (OT) space. As connectivity is now pervasive, companies cannot treat their plants and assets as separate from their IT systems.
Below we will discuss three common myths and misconceptions about connectivity on the shop floor:
"Shop floors work better in isolation from other systems and shouldn't be connected to avoid disrupting core processes."
There are several reasons why factories can no longer be treated as isolated entities from the rest of the organisation and why they must be integrated into a network of global intelligent operations that are visible in real time. Workers need to rely on operational evidence and advanced collaboration tools, while monetising industrial data is all about meaningful shop floor-to-boardroom data streams.
So, data should flow from the single asset level to the enterprise level for decision makers and for information should also flow across companies. For this to happen, high bandwidth, secure, low-latency connectivity is central by enabling big and small data flows, from owned cloud to/from distributed clouds and multiclouds. Without it, digital technologies deployed on the shop floor — regardless of how advanced they are — will simply not deliver the desired outcomes. So, reliable, secure, and high-performance infrastructure (both on-prem and in the cloud) is paramount to guarantee a successful transition to smart manufacturing.
"Upgrading software tools will be enough to move toward smart manufacturing."
Many companies make the mistake of assessing the state of their factories based merely on the size of the technology stack they have deployed. But IDC research has shown that for many companies investing in wider asset instrumentation and connectivity should not be the final goal, but the foundation to deliver transformational, value-added initiatives. The key to success in this journey is the ability to move away from an approach that sees smart manufacturing initiatives as one-off stunts to one that incorporates them at the centre of the business strategy. This is essential to master business transformation and balance cost, quality, speed, agility, and innovation. Manufacturers must also address the corresponding risks related to digital transformation, in particular the vulnerability to cyberattacks related to increased connectivity.
These changing business requirements are already pushing a change toward "de-commoditising" operations, so companies must make sure people's intelligence is an integral part of the process. Companies are investing in upskilling initiatives to ensure that workers' skills and capabilities keep pace with the demands of digitalisation. This should be supported by a wider cultural shift in the organization that recognizes digital transformation as the main catalyst for innovation and long-term resilience.
"Connecting machines and tools is expensive and complicated."
IDC research has shown that solving IT/OT integration problems often exceeds companies' internal capabilities and requires a holistic approach to industry transformation. For example, the vast majority of manufacturers' OT personnel are not ready to handle digital initiatives. This of course includes connectivity as well, with many industrial organisations struggling to manage their industrial connectivity without external support. There are still many barriers to overcome, and this requires active support from external companies. According to IDC research, 32% of worldwide manufacturers plan to use managed services for industrial networking within the next three years.
The role of external advisors is to solve multiple technical issues including concerns about the security of integrating IT and OT systems, lack of expertise or staffing capacity on how to accomplish integration, technology issues, and lack of compatibility with legacy applications. External partners can act as a catalyst to drive decision making and enable project execution. They can help jumpstart technology initiatives on the shop floor and overcome barriers related to organisational complexity, lack of budget, lack of familiarity with IT and OT integration across the organization, and lack of a solid business case for the initiative.
IDC InfoBrief
Transform your factory with connectivity
Smart manufacturing is all about digitally connecting the manufacturing processes to drive operational excellence and innovation. Download today to discover a deep-dive into the strategic importance, and benefits, of leveraging intelligent connectivity to achieve information integration.
