IT/OT Convergence: Manufacturing Sector

Goals

To understand the rate of increase in connectivity in manufacturing, rate of increase of connected devices, key changes in considerations or job requirements for IT professionals.

Early Findings

Connectivity in Manufacturing

  • Some trends that PwC sees in industrial manufacturing are mentioned in this article.
  • In the article, PwC mentions that "a significant portion of new sales growth for industrial equipment manufacturers in the immediate future will come from connected equipment with sensors, actuators, and analytical insights that can exchange critical data with other machines and computer networks in real time via the cloud."
  • According to PwC, in 2018 only 33% of companies could be considered digitally advanced. However, 72% of the 1,155 manufacturing companies they surveyed said that they are significantly increasing their level of digitalization so they can be considered technologically advanced by 2020. They are investing US$907 billion per year (5% of their revenues) towards becoming more connected and building smarter factories.
  • Further, exploring a separate report on this survey, PwC mentions that 10% of manufacturing companies can be considered digital champions. A Digital Champion is defined as a company "with an established digital product and service offering and multichannel interaction in their Customer Solutions ecosystem. They have also integrated and aligned their Operations, Technology, and People ecosystems with their Customer Solutions ecosystem."
  • The report, among others, looks at how far along manufacturing companies are in digitizing their operations. It defines Industry 3.0, where most of the companies are now, as a state where the company automates single machines and processes. While Industry 4.0 "encompasses end-to-end digitization and data integration of the value chain: offering digital products and services, operating connected physical and virtual assets, transforming and integrating all operations and internal activities, building partnerships, and optimizing customer-facing activities."
  • Digital Champions have implemented 66% of the most critical technologies that propel digitization. Approximately 87% of Digital Champions have integrated end-to-end supply chain planning, 78% have implemented industrial Internet of Things, 75% have implemented manufacturing execution systems, 72% have implemented collaborative and smart robots, and 70% have implemented predictive maintenance solutions.
  • Across industries, 20% of automotive companies are Digital Champions and 14% of electronic companies can be considered the same while few companies in the process industries, consumer goods, and industrial manufacturing sectors can be considered the same.
  • Asia leads the way in digitization as 19% of surveyed manufacturers achieved Digital Champion status. Next, were the Americas with 11% and Europe, the Middle East, and Africa (EMEA) with 5%.

Summary of Findings

  • During our initial hour of research, two connected reports on manufacturing and the digitization of manufacturing companies were found.
  • It was unclear what the rate of connectivity meant exactly in a manufacturing context. Therefore, within the IT/OT convergence context, it was interpreted as meaning the rate at which companies are integrating information technology (IT) into their operation technology (OT).
  • From these reports, we learned that digitization is high on the agenda of most manufacturing companies and expected to increase by approximately 39% (=72%-33%) by 2020.
  • These reports also showed that it is currently the automotive industry that has most integrated IT into OT and Asia that is leading the way in this development.

Proposed next steps:

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