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IDC FutureScape: Worldwide Manufacturing 2018 Predictions

Kimberly Knickle, Vice PresidentSimon Ellis, Vice President

November 8, 2017

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LogisticsToday’s Speakers

Kimberly KnickleVice President

Simon EllisVice President

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IDC FutureScape: Worldwide Manufacturing1 Ecosystems and Experiences: By 2020, 60% of G2000 manufacturers will rely on

digital platforms that enhance their investments in ecosystems and experiences and support as much as 30% of overall revenue.

2Embedded Intelligence: By 2021, 20% of G2000 manufacturers will depend on a secure backbone of embedded intelligence, using IoT, blockchain, and cognitive to automate large-scale processes and speed execution times by up to 25%.

3Data Capitalization: By 2020, 75% of all manufacturers will participate in industry clouds, although only one-third of those manufacturers will be monetizing their data contributions.

4IT-OT Organizations: By 2019, the need to integrate operational technology and information technology as a result of IoT will have led to more than 30% of all IT and OT technical staff having direct project experience in both fields.

5Customer-Driven Design: By 2019, 50% of manufacturers will be collaborating with customers and consumers on product designs through crowdsourcing, VR, and product virtualization, with up to 25% improvement in product success rates.

6The Service Gig Economy: In 2020, AR and mobile devices will drive the transition to the gig economy in the service industry, with "experts for hire" replacing 20% of dedicated customer- and field-service workers.

7The Thinking Supply Chain: By the end of 2020, one-third of all manufacturing supply chains will be using analytics-driven cognitive capabilities thus increasing cost efficiency by 10% and service performance by 5%

8 Supply Chain Commerce Networks: By 2020, 80% of supply chain interactions will happen across cloud-based commerce networks, improving participants' resiliency and reducing the impact of supply disruptions by up to one-third.

9 Market-Driven Assets: By 2020, 25% of manufacturers in select subsectors will have balanced production with demand cadence and achieved greater customization through intelligent and flexible assets.

10 Intelligent Assets: By 2019, 15% of manufacturers that manage data-intensive production and supply chain processes will be leveraging cloud-based execution models with edge analytics for real-time visibility and operational flexibility.

Accelerating Digital Transformation (DX) - Technology-Centric Transformation Altering Business and Society

DX Delta - Leaders and Disruptors Widen Performance Gap Platform Disruption — Unleashing Digital Innovation’s Power for Scale Human vs Machine - the Impact of AI and Automation Sense, Compute, Actuate— The New Data-Centric Paradigm Innovation Impasse — Legacy Systems Constraining Transformation Empowering the Material World — Revolutionized Processes Expand

Technology Reach

For additional details on the above Drivers, please refer to IDC FutureScape: Worldwide Manufacturing 2018 Predictions (Doc # US42126117)

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Drivers for Manufacturing

1. Ecosystems and Experiences: By 2020, 60% of G2000 manufacturers will rely on digital platforms that enhance their investments in ecosystems and experiences and support as much as 30% of overall revenue.

2. Embedded Intelligence: By 2021, 20% of G2000 manufacturers will depend on a secure backbone of embedded intelligence, using IoT, blockchain, and cognitive to automate large-scale processes and speed execution times by up to 25%.

3. Data Capitalization: By 2020, 75% of all manufacturers will participate in industry clouds, although only one-third of those manufacturers will be monetizing their data contributions.

4. IT-OT Organizations: By 2019, the need to integrate operational technology and information technology as a result of IoT will have led to more than 30% of all IT and OT technical staff having direct project experience in both fields.

For additional details on the above Predictions, please refer to IDC FutureScape: Worldwide Manufacturing 2018 Predictions (Doc # US42126117)

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IDC FutureScape: Manufacturing Predictions Highlights

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Prediction 1 – By 2020, 60% of G2000 manufacturers will rely on digital platforms that enhance their investments in ecosystems and experiencesand support as much as 30% of overall revenue.

IT Impact

Guidance

IT Governance - Requirements definitions for openness and security, enterprise architecture

Platform Owners – Include capabilities that draw participation and create business value

“Source of truth" for business interactions

Evaluate pre-assembled digital platforms

Explore your options for integration and security

Consider standards and next gen security

Revisit your ecosystem and experiences requirements frequently

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Prediction 2 – By 2021, 20% of G2000 manufacturers will depend on a secure backbone of embedded intelligence, using IoT, blockchain, and cognitive to automate large-scale processes and speed execution times by up to 25%.

IT Impact

Guidance

Responsibility for building the case for large scale IoT roll outs

Bringing together the tools to incorporate artificial intelligence and machine learning

Learning blockchain and educating stakeholders on the best use cases, what's real, what's not

Focus on the business outcomes, rather than the technology or performance measures.

Keep experimenting on how you can best integrate new technologies for embedded intelligence

Embedded Intelligence

IoT

Blockchain

Cognitive

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Prediction 3 – By 2020, 75% of all manufacturers will participate in industry clouds, although only one-third of those manufacturers will be monetizingtheir data contributions.

IT Impact

Guidance

Security architectures and data governance

Increased collaboration with OT to create secure connectivity within operations

Applying big data analytics and cognitive/artificial intelligence tolarge quantities of information

Avoid proprietary industrial platforms

Review your options and prioritize transparency

Create business value from the data, through analytics and/or by combining information sources

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Prediction 4 – By 2019, the need to integrate operational technology and information technology as a result of IoT will have led to more than 30% of all IT and OT technical staff having direct project experience in both fields.

IT Impact

Guidance

Focusing less on gatekeeping and more on collaboration and satisfying business objectives

New talent will be less IT-focused, more business execution-focused.

Supporting ongoing training for this new breed of employees

Develop a plan to allow new technical subject matter experts to balance technical responsibilities with operational requirements

Take advantage of investments in digital training programs

Integrate ongoing training with hands on learning environments such as fab labs and learning factories

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Q&A

Today’s Speakers

Kimberly KnickleVice President

Simon EllisVice President

1 Ecosystems and Experiences: By 2020, 60% of G2000 manufacturers will rely on digital platforms that enhance their investments in ecosystems and experiences and support as much as 30% of overall revenue.

2Embedded Intelligence: By 2021, 20% of G2000 manufacturers will depend on a secure backbone of embedded intelligence, using IoT, blockchain, and cognitive to automate large-scale processes and speed execution times by up to 25%.

3Data Capitalization: By 2020, 75% of all manufacturers will participate in industry clouds, although only one-third of those manufacturers will be monetizing their data contributions.

4IT-OT Organizations: By 2019, the need to integrate operational technology and information technology as a result of IoT will have led to more than 30% of all IT and OT technical staff having direct project experience in both fields.

5Customer-Driven Design: By 2019, 50% of manufacturers will be collaborating with customers and consumers on product designs through crowdsourcing, VR, and product virtualization, with up to 25% improvement in product success rates.

6The Service Gig Economy: In 2020, AR and mobile devices will drive the transition to the gig economy in the service industry, with "experts for hire" replacing 20% of dedicated customer- and field-service workers.

7 The Thinking Supply Chain: By the end of 2020, one-third of all manufacturing supply chains will be using analytics-driven cognitive capabilities thus increasing cost efficiency by 10% and service performance by 5%

8 Supply Chain Commerce Networks: By 2020, 80% of supply chain interactions will happen across cloud-based commerce networks, improving participants' resiliency and reducing the impact of supply disruptions by up to one-third.

9 Market-Driven Assets: By 2020, 25% of manufacturers in select subsectors will have balanced production with demand cadence and achieved greater customization through intelligent and flexible assets.

10 Intelligent Assets: By 2019, 15% of manufacturers that manage data-intensive production and supply chain processes will be leveraging cloud-based execution models with edge analytics for real-time visibility and operational flexibility.

Meet the Analysts

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KIMBERLY KNICKLEVice Presidentkknickle@idc.com@kimknickleUSA

SIMON ELLISVice Presidentsellis@idc.comUSA

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