Data-driven innovation in the Manufacturing Industry
European manufacturing organizations are facing unique changes and are subject to unprecedented challenges in their marketplace: not only is the current economic environment forcing manufacturers to optimize processes and contain costs, but also the extensive availability of data is in fact empowering the market and making buyers increasingly knowledgeable about products, prices, and other key features.
Manufacturers are therefore turning their attention to the potential of data at their disposal and to the ways of analyzing and interpret the information they have in terms of the potential impacts and risks to their business. Recent evidence from the Economist Intelligent Unit (EIU) has revealed that 86% of manufacturers have significantly increased the amount of production and quality-control data stored for analysis over the past two years. Also, nearly two-thirds of manufacturers use sensor-generated data from networked machines and 20% plan to do so in the near future.
IDC and Open Evidence research suggests that manufacturers are turning to data to realize a wide variety of savings and gains across a number of manufacturing’s application areas:
• In quality management processes, manufactures can dramatically reduce quality-related costs and, in particular, those costs associated with scrap and rework: our estimates indicate that if scrap and rework were reduced to zero levels, an overall impact of 160 billion Euro would be achieved among the top 100 Europe’s manufacturers alone.
• By adopting data-driven preventive management processes, manufacturers can significantly reduce total equipment downtime and increase production (50% of downtime reduction and 20% of production increase according to our estimates).
• Operations would also benefit from advanced data gathering and analysis: if only 10% increase in production efficiency were obtained across the top 100 European manufacturers, a consolidated gain of 265 billion Euro would theoretically impact the European industry.
• A constant and advanced application of Sales & Operations Planning IT tools would bring double-digit percentage improvements to a series of fundamental supply-chain metrics such as the response time to unforeseen events affecting orders (300% improvement), order delivery time (120% improvement), time to market (70% improvement), monthly inventory turns (50% improvement) and share of new product launch failures (30% improvement).
Yet, collecting and making sense of data does not automatically yield benefits: not all European manufacturers are actually able to keep up with the large volumes of data they collect and generate and a somewhat small number of manufacturers regularly use predictive analytics to generate useful future insights: an extra effort is therefore needed to make sure that the European manufacturing industry fully takes advantage of the emerging data-driven innovation.
Blogpost by Giorgio Michelleti IDC,
IDC & Open Evidence, Data-driven innovation in the Manufacturing Industry, European Data Market Study, November 2014
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