From a technology perspective, manufacturing traditionally has lagged behind other industries such as healthcare and financial services. Manufacturers’ data centers, on average, are older; many are antiquated. This can prove expensive; the average manufacturing revenue loss due to IT downtime is $196,000 per company per year, estimates Computer Associates Technologies.[1]
But natural disasters such as Hurricane Sandy, which disrupted countless IT operations along the East Coast; security breaches; and the growing importance of cloud-computing capabilities are prompting manufacturers to examine their own core data centers and consider upgrading. Or they’re retaining a host service provider to handle the work.
Manufacturers that examine their IT operations well before a disaster are more prepared should one strike, especially if their mission-critical IT systems drive orders, customer service and platforms. They’re also drawn to revamping their IT operations by the potential cost savings of migrating to the cloud, which is a more highly resilient platform.
Larger manufacturers are turning more toward disk-based, disaster recovery services over tape backup. Tape backup triggered big problems for companies affected by Hurricane Sandy because they couldn’t physically get to the tapes. (Tape backup is still popular among manufacturers in general, however.)
A Trend Toward Managed Backup Services
Further, more manufacturers are opting to contract for managed backup services from service providers. Assuming much more of a balance-sheet perspective, they are opting to pay a monthly fee to a service provider rather than a cash outlay and they get cloud storage and other IT services as well as disaster recovery services.
For instance, Rémy Cointreau, the wine and spirits maker, moved to update its outdated disaster recovery system in 2009 after Chief Information Officer Alexandre Page-Relo decided that “recording everything on tapes didn’t feel like a 21st century-type operation.”
In addition, Page-Relo says, “No matter how dedicated our consumers, if a shortage of Champagne or Cognac develops in stores because we haven’t been able to create the order in the computers, my customers may turn to the competition. You never know what the outcome of that change could be.”
Rémy Cointreau installed a stronger backup system from SunGard Availability Services that employs an innovative storage solution for systems recovery. Today, the New York office of its U.S. operations can replicate its servers and networks immediately should a data-disruption occur.
“I could lose my New York site and still run my business,” says Page-Relo. “You’re buying peace of mind and comfort.”
The difference a hybrid IT environment can make
For manufacturers, a hybrid IT environment can make a difference in reducing reputational risks. A growing number of boards of directors of manufacturing companies are realizing this, and they’re often leading the way towards better IT resiliency.
Manufacturers are probably the most vulnerable from outages and downtime whether natural or manmade. That’s because antiquated technologies make them more vulnerable and susceptible to cyber criminals and natural disasters, especially if their IT facilities are located in solely one location.
Very large manufacturers are seeking to drive costs out of the IT environment with fewer data centers, more robust technologies and standardized programs and applications. They're opting for shared service models where there is a more centralized IT architecture.
Surprisingly, given the security concerns with antiquated IT technology, not that many manufacturers are driven by such concerns to upgrade their systems; they’re more interested in reducing their costs. This likely will change as manufacturers recognize the increasing problem with cyberattacks that are confronting all industries. They are keeping a closer eye on security breaches and that includes senior-level and board-level officials.
AmeriPride Services, among North America’s largest uniform rental and linen supply companies, held the data and information from its 45 branches solely within each branch, not in a central location. An independent business-impact analysis found gaps in its ability to recover from a disaster, so AmeriPride moved to employ a disaster recovery plan within six-to-seven months.
“I had been through a number of natural disasters in my career, so this is something I take very seriously,” says Jeff Baken, AmeriPride’s data center manager. And he decided because of the speed necessary to go with an outside partner.
AmeriPride has done a number of tests of its disaster recovery plan, and has been very pleased with the results. “I’m very confident” we would recover immediately in the event of a disaster,” Baken says.
Emergence of Mobile Technology
The growing importance of mobile technology and web applications also are prompting more manufacturing IT departments to determine their vulnerabilities within a distributed environment. Anything that could take down workflow is being looked at more frequently. They’re looking to leverage software to help detect intruders into their IT as well as their physical environments.
Consequently, hosted service providers are noticing a major increase in the demand for consultancy services to help manufacturers examine the entire gamut of their mobile and other IT environments. SunGard Availability Services, for instance, is working with a growing number of manufacturers with disaster recovery related services, especially those whose disaster recovery centers are collocated in the same region. During Hurricane Sandy, SunGard abruptly had 47 customers seeking help with their technology recovery applications.
Manufacturers are stepping up their work with suppliers to make sure IT environments are secure and protected. They are trying to validate the security resiliency of their suppliers to determine how vulnerable they might be should a supplier suffer a breach or an outage from a natural resource.
This is increasingly necessary because vendors can be forced to shut down because of a disaster. During Hurricane Sandy, for instance, a Southern California manufacturer had to scurry to reroute products from its mid-Atlantic distribution center after a logistics provider in the region was shut down.
Even if an event such as a hurricane has a limited impact on the manufacturer, it needs to gain insight into how the storm might affect its third parties and what their business continuity plans entail.
Manufacturers are getting help from hosted service suppliers on what criteria to use to determine their resiliency. A lot of work is beginning now with suppliers over the issue of outages.
Manufacturers may be slow traditionally in reexamining facilities such as their IT environments. But modern obstacles such as natural disasters, cybercrooks and new realities from technology advances are triggering a drive among them to upgrade their facilities, link with hosted service providers and work with suppliers to gauge their susceptibility to troubles that could cause costly outages.
Manufacturers are coming of age on the IT front.
Charles Iannuzzelli is a Partner of Consulting Services at SunGard Availability Services.
[1] CA Technologies, The Avoidable Cost of Downtime (CA Technologies, 2010)
