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Simon Jacobson, Gartner

Jim Wetzel, SMLC

Digital Business Is Redefining the Scope of Manufacturing Operations

2014 Gartner, Inc. and/or its affiliates. All rights reserved. 3

We Are Not Making the Most of Our Manufacturing Data

56%

>70%

~60%

Data sources: Gartner SC User Wants and Needs Study, Gartner/MESA Business Value of Manufacturing Systems Study, Primary Research conducted with Gartner clients

CONFIDENTIAL AND PROPRIETARY

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Most Manufacturers Are Not Ready

Optimizing for Today

Established Cultures

Lack of "Best Practices"

"Spreadsheets of Things"

Distrust in IT

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Key Issues

1. What is digital business?

2. What are three ways digital business will impact manufacturing operations?

3. How is the Smart Manufacturing Leadership Coalition providing a platform?

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Key Issues

1. What is digital business?

2. What are three ways digital business will impact manufacturing operations?

3. How is the Smart Manufacturing Leadership Coalition providing a platform?

CONFIDENTIAL AND PROPRIETARY

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

What Is Digital Business?

Digital business is the creation of

new business designs reached by blurring the

digital and physical worlds.

CONFIDENTIAL AND PROPRIETARY

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

The Internet of Everything Will Be a Part of Becoming a Digital Business

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Key Issues

1. What is digital business?

2. What are three ways digital business will impact manufacturing operations?

3. How is the Smart Manufacturing Leadership Coalition providing a platform?

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Three Ways Digital Business Impacts Manufacturing Operations

1. The Current Definitions of Digital Manufacturing Are No Longer Valid.

2. Shrinking Manufacturing Footprints Will Drive the Factory of the Future

3. Technology Innovation Is Faster Than Ever

CONFIDENTIAL AND PROPRIETARY

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

1. The Current Definitions of Digital Manufacturing Are No Longer Valid.

Redefine what value add means.

New Measures.

New Skills.

CONFIDENTIAL AND PROPRIETARY

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

2. Shrinking Manufacturing Footprints Are Driving

The Factory of the Future

Traditional factory layouts are changing and forcing new

tradeoffs between labor, automation, greenfield, and

brownfield.

CONFIDENTIAL AND PROPRIETARY

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

3. Technology Innovation Is Faster Than Ever

Its not the things, its the information and what YOU do with it

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Innovation Trigger

Peak of

Inflated Expectations

Trough of Disillusionment

Slope of Enlightenment Plateau of

Productivity

time

expectations

Plateau will be reached in:

less than 2 years 2 to 5 years 5 to 10 years more than 10 years

obsolete

before plateau

As of July 2014

Smart Robots in Manufacturing

Talent Science

Manufacturing Segmentation

Synchronized BOMs

Supply Chain Execution Convergence

IT/OT Convergence and Alignment Internet of Things for Manufacturing Operations

Operational Risk Management Cloud Computing in Manufacturing Operations

Supply Planning

Overall Equipment Effectiveness (OEE)

3D Printing in Manufacturing Operations

Sustainable Production Operations Intelligence

Asset Performance Management Mobile Technology

Digital Manufacturing

Track and Trace

Manufacturing Network Design

Lean Manufacturing

Supplier Quality

Outsourced or Third-Party Manufacturing

From, "Hype Cycle for Leaders of Manufacturing Strategies, 2014," 28 July 2014 (G00263158)

3. Technology Innovation Is Faster Than Ever

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Key Issues

1. What is digital business?

2. What are three ways digital business will impact manufacturing operations?

3. How is the Smart Manufacturing Leadership Coalition providing a platform?

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

https://smartmanufacturingcoalition.org http://smartmanufacturing.com

A non-profit organization comprised of: Manufacturing Companies Technology Providers Manufacturing Consortia Universities Government Agencies and Laboratories

Alcoa|Corning|GeneralDynamics|GeneralMills|GeneralMotors|Pfizer|Emerson|Honeywell|Nimbis|Rockwell|

Schneider|Savigent|UCLA|UTAustin|Purdue|Penn|CMU|Tulane|NCSU|CalTech|RPI|AIChE|ASQ|AMT|NCM

S|MESA|MTConnect|SustainingSolutions|NSF|NIST|CMSI|ASERTTI|NASEO|EPRI

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

https://smartmanufacturingcoalition.org http://smartmanufacturing.com

The infusion of intelligence that

transforms the way Industries

conceptualize, design, and operate

the manufacturing enterprise.

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

20

Unleash applications to drive industrial competitiveness by enabling an open real-time

manufacturing platform

Smart Manufacturing Vision:

21

What is Smart Manufacturing ?

The ability to take action, in real time, to

OPTIMIZE your assets in the context of your business strategies

and imperatives

22

Smart Manufacturing Drives Value

Provide differential manufacturing performance

Accelerate reusable applications (Apps)

Transform deployment, support and security models

Enable industrial manufacturing application marketplace

Open to all (available, accessible and affordable)

Agile to change with business needs and opportunities

Open Cross Application Real-time Manufacturing Platform

23

Applications

Context

Data

Mapping

Calibration &

Maintenance Production

Models Sensor

Data

Time Series

Event Data

Suppliers

Heating & Forging

Power Mgmt &

Energy Grid

Smart Manufacturing Platform

Line Operations

Customers

Distribution Sustainability

& Safety

Traditional Manufacturing Automation

Environment and Software Tools

Smart Manufacturing

Platform Open Infrastructure

SM Software Marketplace APPs & Toolkits

Compose Workflows Cloud Deployment Private/Public IaaS

SM Value

Proposition

Private

Smart Manufacturing

Platform Appliance

Design Operations Supply Chain

DOE Project Test Bed

Praxair dynamic energy management & cross unit performance

25

Hows your STITCHING?

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

The Digital Train Has Left the Station Are You on It?

2014 Gartner, Inc. and/or its affiliates. All rights reserved.

Recommendations

Ask "What problem are we trying to solve?" "What opportunity are we creating?"

Understand how localized manufacturing capabilities will affect digital business designs. Use this to identify the optimal production layouts.

Create and Build competencies to manage the convergence and alignment of IT and OT

Focus less on things and more on data and informationand how they will be used in a unified fashion.

Experiment and incubate with the Factory of the Future or no economy of scale will be achieved.

30

Gartner Supply Chain Executive Conference 2014

September 10 and 11, London, UK

Experience live analyst expertise plus much more at a Gartner event.

Visit gartner.com/events

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