The mechanical nature of man-ufacturing is an illusion. Today’s products are largely dependent on data availability, with the manufacturing line at the hub of an expanding digital network connecting suppliers, distribu-tors, partners, and customers. Customization, just-in-time inventory, intellectual property, and competition are all inter-woven into the modern manu-facturing enterprise. Successful R&D, engineering, sales and marketing, customer relation-ships, and workforce manage-ment increasingly are managed through various interlocking digital systems. Downtime in any one area can have a domino effect on the whole enterprise, causing substantial financial losses. Managing data availabil-ity is a crucial cog in maximizing efficiency and profitability for to-day’s manufacturers as they pre-pare for new advances ranging from IoT to augmented reality to expanded use of robotics.

Digital Transformation in Manufacturing and the 5 Keys to Data Availability

Manufacturing white paper

Manufacturing remains the largest, and in many ways, most vibrant, segment of the economy. World trade in manufactured goods more than doubled between 2000 and 2014—from $4.8 trillion to $12.2 trillion. In the U.S., manufacturers today produce double the output of 1984, although they do so while employing one-third fewer employees. The industry is increasingly driven by digital data and digitized processes, making data availability crucial to keeping manufacturing operations on target.

Data is a key enabler in what has become the always-on state of manufacturing today. As in other industries, digital transformation is taking hold, and businesses must rely on data integrated across disparate management solutions ranging from ERP to workforce management. IT departments must be able to guarantee data availability and instant recovery from outages by deploying systems that provide constant availability, rock-solid backup and replication, and centralized management of virtualized data environments.

Evolution or ExtinctionManufacturers that don’t adapt to changing markets and innovation become less and less competitive and ultimately fail. The industry is entering what McKinsey & Co. labels a dynamic new phase where traditional views are outdated and manufacturers are driven by technology and the pursuit of emerging markets. Software, machine learning, and the Internet of Things (IoT) are recasting the definition of a manufactured “product” from simply physical objects into smart, connected devices that “are reshaping industry boundaries and creating entirely new industries,” Michael E. Porter and James E. Heppelmann write in the Harvard Business Review.

In this new, highly competitive environment, supply chains and distribution channels are inextricably linked through the manufacturing plant, and any hiccup anywhere in the line—from source materials to end customer—adversely impacts operations. “The changing nature of products is also disrupting value chains, forcing companies to rethink and retool nearly everything they do internally,” according to Porter and Heppelmann.

Scania Great Britain, for example, made vast investments in its dealer network to expand service outlets, augment staff, and extend operating hours, with the goal of increasing customer access to local sales and repair services for its trucks, buses, and engines.

Mission-critical virtual machines (VMs) in the Scania Great Britain main office run the intranet, network drives, Microsoft SQL Server, customer relationship management (CRM) system, business intelligence (BI) system, and document archiving solution that help dealers invoice their customers. The company and its dealers require 24/7 availability of virtualized data and applications, but it had to overcome slow backup, time-intensive recovery, and costly disaster recovery (DR) testing. To meet its goals, the manufacturer needed a new backup and replication solution.

Ensuring Always-On OperationsData knows no physical boundaries. This enables businesses to establish and support global footprints. Manufacturing operations are embracing new capabilities vital to competitiveness such as IoT, advanced analytics, networking to the end customer, and post-production enhancements through the delivery of software that provides updates and bug fixes.

These new capabilities also empower manufacturers to reel in constant streams of data from products in use in the field, which can lead to product improvement and better predictive maintenance, and in turn, greater customer loyalty. But they also come with new requirements for continuous operations that depend on real-time access to data.

Unbridled data growth requires new management capabilities to ensure availability, as illustrated by the experience of Volvo dealers in Belgium. Those businesses rely on a dealer management system that tracks each car sale and customer from prospect to buyer to aftercare. The system also connects dealers to Volvo Car BeLux for inventory planning, ordering, and management. Each dealership

Michael E. Porter, James E. Heppelmann Harvard Business Review

World trade inManufactured goods

2000 2014

$4.8T

$12.2T

“The changing nature of products is also disrupting value chains, forcing companies to rethink and retool nearly everything they do internally.”

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has an on-site IT infrastructure and in the past backed up their physical servers on-site to tape.

However, as data grew, backup to tape was no longer feasible. Purchasing additional tape drives was costly and Volvo dealers worried about expensive hardware refreshes, the risk of human error, and a lengthy process for data recovery that could take up to a day.

Working with a leading IT integrator, dealer data and applications were virtualized and each dealer’s on-premises VMs were backed up on-site to a network-attached storage (NAS) device, with backup copies sent to a secure, private cloud. Using a sophisticated backup and replication solution, dealer VMs can be recovered within minutes, and in the event of a catastrophic situation, full restoration can be completed within four hours.

Hand-in-hand with data availability is the issue of securing sensitive data and trade secrets crucial to maintaining competiveness and industry standing. Deloitte and the Manufacturers Alliance for Productivity and Innovation (MAPI) surveyed manufacturers and found that 39% of respondents experienced a breach within the past year.

“Over one-third (35 percent) of executives believe [intellectual property] theft was the primary motive for the cyberattacks experienced by their company in the past 12 months—second only to financial,” according to Deloitte and MAPI. “Many companies interviewed had not yet fully implemented data protection and data loss prevention programs to mitigate this risk.”

Avoiding Downtime No matter what the cause, unavailability of data can have a devastating impact on manufacturing operations that incur unplanned downtime as a result.

According to the ARC Advisory Group, “Reliability experts estimate that unplanned downtime costs 10 times as much as planned downtime for maintenance in the process industries. Unplanned downtime also causes ripple effects throughout the organization, such as an estimated 5 to 10 percent increase in inventories and labor costs and delayed delivery of finished goods, all resulting in reduced profitability.”

One report drawing on insight from 1,140 senior IT decision makers finds that an average of 15 unplanned downtime events each year costs businesses an average $16 million annually. Downtime could mean the loss of even one

highly innovative process or idea that could cost the business millions or even billions of dollars.

Manufacturers must maintain continual oversight of their operations to remain proactive and avoid downtime at all costs. That requires a constant view into all aspects of their operations and the ability to respond to and even anticipate problems.

Hologic Inc. is a full-service developer, manufacturer, and supplier of diagnostic products, medical imaging systems, and surgical products for women’s healthcare. Field service engineers provide customers with ongoing technical assistance for installed products and if something goes awry, engineers upload work logs to Hologic for diagnosis before resolving the issue. If they can’t access the data, engineers can’t fix Hologic’s Selenia Dimensions systems quickly enough and the company can’t meet service-level agreements (SLAs) with customers, leaving them with a backlog of patients waiting for mammograms.

Keeping Up with ComplianceManufacturing has been the frequent target of new regulatory requirements. Since 1981, the federal government has issued an average of just under 1.5 manufacturing-related regulations per week. Much of that regulatory burden is dependent on data retention and availability, which can add to storage requirements and costs.

Auto manufacturers, for example, must comply with myriad regulations from multiple agencies covering everything from safety to fuel standards, and much of that regulation is dependent on data. In 2016, 18 auto companies signed on with the U.S. Department of Transportation and National Highway Traffic Safety Administration on a statement of principles for the collection and sharing of data that will expand data collection efforts for the purposes of enhancing safety, improving recall participation, detecting risks earlier, and enhancing automobile cybersecurity.

Misreporting of regulator-required data can lead to severe consequences. Mitsubishi Motors saw its market value halved early in 2016 within a week of admitting to providing Japanese regulators with fuel standards data for 25 years that had been based on U.S. requirements rather than Japan’s. The cost of Volkswagen’s diesel fuel emissions rating scandal was approaching $20 billion in 2016.

Tracking and regulatory compliance must be part of an overall data management strategy

“35 percent of executives believe [intellectual property] theft was the primary motive for the cyberattacks experienced by their company in the past 12 months—second only to financial.”

of manufacturers surveyed

experienced a breach within the past year

39%

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Cyber Risk in Advanced Manufacturing survey Deloitte and the Manufacturers Alliance for Productivity and Innovation

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designed to ensure that products are not sidelined due to lack of data. In pharmaceuticals, more than 40 countries have enacted or plan to enact pharmaceutical serialization and traceability requirements that could “promote the effective and efficient implementation of traceability, help to secure the supply chain, and protect patients from the harmful effects of falsified and counterfeit pharmaceuticals.”

Traceability requirements impact a broad range of manufacturing sectors, from toys to produce. “A company that can reliably trace a specific product in its supply chain can pull the product without having to remove more products than necessary,” notes Food Logistics magazine. “Because the [GS1] standard provides identification for each individual case and/or pallet, it is not necessary to remove cases of product unaffected in the event of a recall.”

Manufacturing enterprises must maintain complete visibility and be able to easily set up automated reporting to help validate regulation compliance, including within backup and virtual infrastructures. That requires an efficient storage management solution that avoids costly data duplication but provides for long-term data retention in the event of a safety recall or misreporting issue that can date back years or even decades. Data reduction features such as built-in compression and deduplication help save money without sacrificing performance.

Building Digital Management for ManufacturingManufacturers must do more than just invest in new tools, says IDC, they must “undergo an information transformation.” The consulting firm PwC predicts, “Given today’s leading-edge capabilities, it’s reasonable to envision—and prepare for—a data-driven factory of the future where all internal and external activities are connected through the same information platform.”

Businesses face many potential disruptions, including environmental incidents, hacking events, and everyday malfunctions. As more and more manufacturing processes become digitized, manufacturers will be increasingly reliant on IT systems to consistently manage and back up data to maximize uptime and ensure speedy recovery in the event of a disruption.

Availability for SuccessAs with other industries, all facets of manufac-turing are becoming increasingly digitized. New technologies and capabilities that rely on data availability will revolutionize the industry, and those who best accommodate these changes are likely to be the most successful.

To build the digital management solution that best equips your enterprise for continuity and growth, follow these guidelines:

1. Accelerate the shift from a reliance on historical metrics to real-time key performance indicators (KPIs) that measure how current manufacturing processes deliver on business objectives. Data on on-time delivery, yield quality, maintenance reduction, efficiency, compliance, and of course, profitability, must be immediately available to provide the digitized manufacturing operation with up-to-date information crucial to decision making.

2. Enable IT to meet service-level objectives, including the recovery of any IT service and related applications and data within seconds and minutes, including for VMware vSphere and Microsoft Hyper-V environments.

3. Minimize the number of components and tasks IT needs to monitor by bringing them into a single, manageable, automated console.

4. Deploy the automated backup, recovery, and replication capabilities that are essential to provide manufacturing enterprises with:

• High-speed recovery• Data loss avoidance• Automated recovery verification• Integrated disaster recovery• Ability to replicate either on-site

for high availability or off-site for disaster recovery

5. Ensure remote office/branch office environments are equipped with speedy backup and recovery times while reducing WAN bandwidth consumption by keeping more backup and restore activities local at remote sites.

Learn more

Veeam Availability for the Always-On Enterprise™

www.veeam.com

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