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Hype or Reality? The New World of Manufacturing Might be Closer Than You Think

Dec. 8, 2015
Everything stems from the digitization of manufacturing, which makes powerful business sense and is closer to hitting full swing than you might think.

A lot of articles are being written now about the digital factory and other disruptive technologies. The cloud is coming to manufacturing! Mobile collaboration will be everywhere! 3-D printing will take over the production floor!

However, according to a recent Gartner report, most global manufacturers respond to these predictions by shrugging their shoulders and going on with their business. Only 3% of manufacturers say they are using the cloud for manufacturing. 3-D printing is certainly filling an important market need, but it’s not about to take over the manufacturing floor. And despite the advances in areas like robotics and computer 3-D design, few factories, if any at all, are truly digital from beginning to end.

So are these disruptive technologies really coming, or is it all just hype and buzzwords? The surprising answer is, many of them are here already — whether manufacturers realize it or not.

Building the Foundation

Virtually all the predictions about these coming revolutions are related to one idea: the digitization of manufacturing. This is a trend that is clearly well under way, and not because manufacturers are anxious to employ the cloud or 3-D printing, but because digitization simply makes powerful business sense.

For example, manufacturers of all sizes are using computer-aided design and have been for some time. These CAD systems now contain rich 3-D models that can and should be leveraged downstream to drive production efficiency, quality, process improvement, and everything else that’s important to manufacturers. But this has proven difficult with so many legacy and disparate systems on the production floors. That’s one reason why manufacturing executives say their top two operational challenges are to “break down silos of organizations and departments” and link their “disparate systems and databases that exist across plants and the enterprise.”[1]

One way they’re breaking down the silos is by replacing legacy execution systems with Manufacturing Operations Management (MOM) systems that provide a unified, standardized platform for factory execution across the enterprise. Among the many benefits of this transformation is the fact that it provides the basis for leveraging CAD models into manufacturing processes, and provides a “digital thread” through all manufacturing operations. While only 23% of manufacturers had implemented a MOM platform by 2014, 21% plan to do so this year, indicating a rapidly accelerating adoption rate.[2]

Then there’s the Internet of Things — the growing computerization and connectedness of everything. This is a very real trend also, with billions of devices now connected worldwide.

What all this means is that the digital foundation for true transformation is rapidly coming into place. With design and manufacturing digitized and integrated, and computer technology built into tools, machines, packaging, and every other object on the planet, the disruptive technologies that are predicted are well on their way to reality.

Let’s look at four predictions for the future that are actually being implemented today in manufacturing enterprises.

The Cloud

The cloud is generally defined as using off-premises data storage and computing, which allows business to be more agile and centralized, and better able to support collaboration. But as Gartner recently noted, “the definition of ‘cloud computing’ has proven to be evasive. Several of the companies interviewed … have very sophisticated, centrally-hosted solutions that serve several plants; the difference between this and a cloud solution becomes blurred.”[3] So, despite the low adoption rates of “pure” cloud usage in manufacturing operations, if this definition includes a Center of Excellence (COE), then adoption rates are actually much higher. COEs are now recognized as a best practice, and are in use in a growing number of global manufacturing enterprises.

True, a COE is not outsourced to a cloud vendor; rather it is controlled and operated by the manufacturer itself. Nevertheless, the COE is off-premise, and provides similar advantages as a cloud deployment. It enables the centralization of planning and drives greater collaboration between management and factory execution.

According to IBM, the purpose of a COE includes documenting best practices, building a repository of reusable process assets, and providing governance for the process lifecycle.[4]

“Manufacturing Transformation” offered this definition:[5]

Typically, a COE consists of a multidisciplinary team of experts. The first part of this group is a governance team, consisting of the process owners. They decide what process changes are needed and should be applied. This group frequently travels to the plants while also being aware of the various business needs and constraints. They may or may not be the budget owners. The second group is the IT specialist’s team that — based on the scoping decisions done by the process owners — actually makes the changes, tests them and then distributes to the plants.

As manufacturers adopt an increasingly global perspective, the role of Centers of Excellence will only grow in importance.


You might think that social technology is limited to Facebook posts, and has no serious applications in manufacturing. The reality is quite the opposite. Social applications are gaining traction. In manufacturing, we call these applications “collaborative” tools instead.

Take applications like SharePoint and Lync. These and other commercialized instant messaging systems allow people across functions and locations to communicate and collaborate in real time. Increasingly, applications like these are being embedded in process workflows, with alerts and triggers that allow a problem on a factory floor to be instantly addressed by experts on the other side of the world.

The COE example mentioned above can be viewed as a social application, as well. The Wall Street Journal calls this “Social BPM” (Business Process Management). The idea is that while business processes traditionally are managed from the top down and end users don’t see process changes until they’re a done deal, Social BPM “turns this process around, using social networking tools to allow employees and customers to play a more integral part at the start of and throughout the development process.”[6]

Social is just another word for digital-enabled collaboration, and it’s very much a reality in today’s manufacturing enterprise.


With the rise of smart phones and tablets, the whole world has become mobile in its use of technology, and manufacturers are folding this technology into their operations at an increasing rate. A few years ago, mobile was barely present in manufacturing. Today, some 80% of manufacturers have or are developing mobile applications.[7]

There are several reasons for this. For one, a new generation of workers expects to use mobile wherever they go. For another, with so much of manufacturing operations becoming digital, there is no reason not to extend applications to mobile users. Finally, mobile applications are easy to justify for the productivity gains they produce. Simply put, when workers are not tethered to their desks or workstations, they can make faster decisions.

A good example of this is the French company Alstom Transport, a provider of products and services for railways. To provide greater visibility, synchronization and control across its global manufacturing shop floor processes, they used tablets linked to their MOM platform which feeds live information to workers, including the latest process plans and work instructions, contextualized and presented in an appropriate way for each user. When there’s a problem, workers on the production floor can communicate instantly with supervisors with a few taps on their tablet, and quickly collaborate on a solution. At any time, the production supervisor can aggregate the day’s activities and generate up-to-the-minute status reports. The company says they now have more consistent data and the ability to react quickly. Interestingly, the company hasn’t had to replace a single iPad because the workers are so excited to have them, they are being very careful not to cause any damage.

Big Data

As the digitization of manufacturing grows, so does the amount of useful data being generated. Manufacturing operations produce vast amounts of data and enterprises are now looking to harness that information. One way they’re doing it is through Manufacturing Intelligence (MI) applications.

MI applications have existed for some time, but they have been hampered by the fact that data was being gathered from disparate systems, making it difficult if not impossible to deliver accurate and reliable data to users in a timely way. However, with the adoption of standardized MOM platforms, manufacturers can now gather and harness information in near real-time from across the enterprise. For executives hungry for visibility into their operations, this is a powerful tool and a competitive advantage.

As far as big data is concerned, MI applications are only the tip of the iceberg. We can expect enterprises to start mining this data in myriad ways to discover insights that will help them improve processes, quality, customer relations, and many other aspects of manufacturing.

In Conclusion …

The digital factory is more than a buzzword. It is rapidly becoming a reality in manufacturing. Even companies that are not specifically aiming to accomplish it are moving in that direction, simply because the business drivers are too powerful to ignore. Some enterprises are moving there one step at a time, adopting COEs or mobility applications as the need arises. A few, like Lockheed Martin and Proctor & Gamble, have launched major initiatives to create fully digital operations.[8]

Manufacturing enterprises are adopting and expanding their use of digital technologies, and in the process they are disrupting the marketplace and forcing others to follow suit. The disruptive technologies of the future are here today — and for global manufacturers, it’s a matter of adapt or be left behind.

[1] “The Global State Of Manufacturing Operations Management Software,” LNS Research, 2014

[2] “The Global State Of Manufacturing Operations Management Software,” LNS Research, 2014

[3] “Market Guide for Manufacturing Execution System Software

[8] “The Global State Of Manufacturing Operations Management Software,” LNS Research, 2014

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