Survey: 43 Pct. Of Manufacturers Designing Factories Of The Future Today

Formidable challenges — from tough economics to rising market complexity — are driving a profound rethinking in the manufacturing industry. In this context, effective factory management is essential. In fact, more than 43 percent of survey respondents declared they have a formal process in place to design future production plants.

Framingham, Mass. — May 29, 2013 — IDC Manufacturing Insights announced a new report, “Business Strategy: The Journey Toward the People-Intensive Factory of the Future,” which presents the results of a recent worldwide survey conducted to investigate the "factory of the future."  Formidable challenges — from tough economics to rising market complexity — are driving a profound rethinking in the manufacturing industry. In this context, effective factory management is essential. In fact, more than 43 percent of survey respondents declared they have a formal process in place to design future production plants.

Key results from this study include:

  • For more than 56 percent of respondents, the factory of the future will be measured according to its production capability and flexibility, not merely efficiency and production capacity.
  • Over the next five years about 10 percent of Western enterprises will give up to make-to-stock (MTS) heading toward make-to-individual (MTI).
  • In five years, 47 percent of manufacturers will produce modular platforms centrally while using local small factories, suppliers, and distributors to tailor final products for local demand.
  • Manufacturers will have to achieve the global plant floor, harmonizing, supervising, and coordinating execution activities across the company's and suppliers' network of manufacturing operations.
  • Despite growing plant automation, people — and the flexibility and decision-making capabilities they provide — will be at the center of the factory of the future. Finding skilled workers will prove to be a key issue in the industry.
  • 63.6 percent of respondents expect their production processes to be largely or completely digitized in the next five years. More than 26 percent of manufacturers will invest over 25 percent of their total ICT budget for plant-floor IT.

The global manufacturing industry is passing through probably one of the most complex market contexts ever.  A sequence of financial crises and the always-threatening instability of global markets have dominated the business landscape in recent years. In this scenario, manufacturers have seen their profitability challenged and their capacity to expand into new markets endangered. This challenging marketplace, other than being a threat, is also resulting in a positive turnaround for the manufacturing industry.

For the last 15 years, the manufacturing industry was essentially "neglected" with respect to other industries and was not considered a good industry to invest in for the most advanced economies around the world.  However, the situation is rapidly changing. Governments around the world now better understand that an economy purely based on service alone cannot survive in the long run.  Manufacturers themselves are going back to basics and putting a renewed premium on production knowledge driven by the need to protect and enhance their technology. They realize now that the direct involvement in production operations fosters innovation and improves customer service.

 All these factors combined with the growth of transportation costs consequent of oil price developments and the need to produce closer to clients for better flexibility and service are favoring manufacturing insourcing initiatives in several developed economies, including the U.S. and U.K.

“The manufacturing industry is back onstage in developed countries worldwide. Governments, media, manufacturers themselves, and their people are all changing their mindset with a stronger focus on production,” said Pierfrancesco Manenti, Head of IDC Manufacturing Insights, EMEA, and Practice Director, Operations Technology Strategies. “We are about to witness a new generation of manufacturing enterprises where operational processes on the plant floor — at the very heart of the enterprise — are considered the centerpiece of this transformation.”

This trend is confirmed by survey results, where more than 43 percent of global manufacturers declared they have a formal process in place to look at how factories and plants will be organized in the near future. This highlights how manufacturers are starting to design their factory of the future now to get ready for a massive change that will last for the next generation of manufacturing.

In this study, IDC Manufacturing Insights has developed a three-layer maturity model that identifies the journey manufacturers will have to undertake toward the factory of the future.  The new report provides a simple, intuitive, yet powerful framework for manufacturers to assess their position along that maturity model and evaluate the best strategy to support their journey toward the factory of the future. Key topics to be explored include:

  • Major business concerns driving the factory of the future strategy
  • Critical trends in manufacturing operations management and the emergence of the global plant floor approach
  • The role plant-floor employees will have in supporting the factory of the future
  • The role of IT in enabling and supporting the factory of the future

About IDC Manufacturing Insights

IDC Manufacturing Insights assists manufacturing businesses and IT leaders, as well as the suppliers who serve them in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Staffed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing asset intensive, brand oriented, technology oriented, and engineering oriented manufacturing industries. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit www.idc-mi.com, email info@idc-mi.com, or call 508-988-7900. Visit the IDC Manufacturing Insights Community at http://idc-insights-community.com/manufacturing.

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