The Priority is on Manufacturing Operations
Can it be true? For the first time in the last several years, manufacturing operations is finally getting its due.
In September 2007, ISA held the 2nd Annual Marketing & Sales Summit in Chicago. Assembled were some of the automation industry's finest marketing and sales minds. The group had gathered to get a better handle on where things are going in the marketing & sales profession, from strategic as well as tactical levels.
The first keynote was by Alison Smith, Senior Research Analyst from AMR Research. According to AMR's recent manufacturing spending survey, manufacturing operations is top of mind and now the number one priority in terms of both strategic planning and applications spending. This is the first time we've seen operations rank this high. As recently as 2005, manufacturing operations rated second to ERP.
So what does this mean? Manufacturing budgets are being allocated to a wide range of applications across the plant. But how prepared are you, as a marketing organization, to take advantage of this shift?
Other AMR findings include:
- Investments in manufacturing operations software continue to grow at a healthy pace; a majority of manufacturers plan 10% to 14% increases over 2007 spending levels for the upcoming year, with US per plant spending outpacing Europe by 30%, on average.
- The global manufacturing landscape is shifting and growing in complexity -- almost too fast -- with 50% of manufacturers having an average of 21 sites or more.
- Organizations anticipate that by 2012, Asia and Eastern Europe will be their primary sources of revenue growth; they plan to shift both sourcing and manufacturing capacity accordingly.
- Organizations are focusing more on execution in the plant; there is a recognized need to create operations intelligence and metrics, and manufacturing contribution counts; this needs to be tied back to strategic initiatives.
- Global coordination with local plant execution is the holy grail.
- Corporate buying influences are changing:
- IT and engineering worlds are colliding; now seeing hybrid buying teams that include plant IT and the engineering organization.
- Know how to speak to both.
All this means that the automation industry is in an ideal place to help meet the corporate drive for operational intelligence. It's a data hungry world. We've always had the data and now we need to demonstrate and communicate how it filters up through the organization and support corporate metrics such as perfect order performance.
Look, manufacturers acknowledge there is a gap between the importance of manufacturing actuals for business planning and their ability to deliver those actuals. They also report a gap in their ability to gather real time production data for site level metrics.
So, the time is NOW. Those companies who know how to:
- Gather real time production and controls data, AND
- Present how that production data will support operational intelligence for increased visibility and measurement, AND
- Can communicate this clearly to engineering, IT, and financial personnel ...
... have a tremendous opportunity ahead. If you don't know where those control and plant-level linkages are, then we suggest you spend time discovering where your leverage is. There's a good chance you are already doing some of this data integration, but you've just not communicated it.
Our thanks to Alison Smith at AMR. She presented a fantastic picture of recent changes in the automation industry and showed how to help drive the transition into building sustainable operations intelligence across our manufacturing customer base.
The pendulum is now shifting back to focus deeply in the plant. Is your company ready?
Source: AMR Research 2006-2007 IT Spending Survey
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