By: Parag Ladha, Director of Product Marketing for Azure IoT.
If you want to gain an advantage in today’s fast-paced manufacturing world, your organization must be agile, resilient and sustainable. In this changing landscape, many manufacturers are investing in innovative solutions to make their products and operations smarter by leveraging advanced technologies such as the Internet of Things (IoT), AI, and digital twins for manufacturing.
Against this background, Microsoft decided to highlight the manufacturing industry for our August 2022 IoT Signals report. IoT Signals is a series of impactful thought leadership content, curated by Microsoft, to inform the community about the latest Technological developments and trends in the IoT industry. The first report, published in 2019, provided a broad view of IoT in a variety of industries, from manufacturing and energy to healthcare and retail, based on comprehensive survey-based research.
For this edition of the report IoT Signals: Manufacturing Spotlight, Microsoft, Intel and IoT Analytics surveyed 500 decision makers working on digital transformation initiatives in discrete, hybrid or process manufacturing in North America, Europe and Asia Pacific. We conducted more detailed interviews with some participants to gain a deeper understanding of their transformation strategies, execution plans, and challenges.
Six key findings about digital transformation and IoT in manufacturing
This new IoT in Manufacturing report reveals insights from real-world manufacturers who have begun their digital transformation journey. It also uncovers new learnings about the state of industrial IoT devices and technology in manufacturing, specifically in the areas of manufacturing operations and smart products.
During our research, we uncovered six key IoT manufacturing and digital transformation trends:
- Most manufacturers have started to advance their efforts to build smart factories. Three in four respondents (72 percent) said they have started to implement their smart factory strategy.
- Operational improvement remains a primary goal for manufacturers. Four in five respondents said they consider overall equipment effectiveness (OEE) to be the most important key performance indicator for measuring the success of their smart factory strategy.
- Organizations have started to shift investments towards process control based on industrial automation. To date, most manufacturers have focused on quality control and condition-based maintenance for smart factory projects. However, the need for greater agility has led these organizations to shift their investments over the next three years to industrial automation-based process control – the use of automated control systems, such as IoT and AI, to automate processes. manufacturing.
- Manufacturers face new challenges when scaling smart factory initiatives. Half of those surveyed said they face challenges developing new software applications, with the majority (eight in 10) saying they deal with skills gaps, particularly in data science, AI and cybersecurity.
- IT-OT convergence occurs in the manufacturing industry. With 76 percent of manufacturing assets now connected, many manufacturers have begun moving workloads and applications from on-premises infrastructure to public and private cloud platforms.
- Manufacturers plan to increase investments in smart connected IoT products. Manufacturing organizations not only streamline their own operations with smart connected IoT products, they also create new revenue streams by selling these products to customers. Manufacturers already selling connected IoT products expect to increase investments from 33% today to 47% by 2025, with a strong focus on value-added services such as predictive maintenance and remote support.
Read IoT Signals: Manufacturing Spotlight to learn more about what’s driving these six key trends and a holistic understanding of the six key components of digital transformation in manufacturing.
Accelerate digital transformation and embrace IoT with Microsoft Cloud for Manufacturing
The six key findings of this IoT in Manufacturing report share a common theme: Manufacturers around the world have begun to advance their digital transformation efforts. These organizations take advantage innovative solutions to reinvent manufacturing and build a more resilient and sustainable future.
By adopting transformative technologies like industrial IoT devices, AI, and digital twins, your manufacturing organization can:
- Transform your workforce. Eight out of 10 manufacturers report having at least one major skills gap, particularly when it comes to advanced data analytics and IT cybersecurity. In this environment, manufacturers are looking for tools to help them bridge the gap and increase employee productivity. Manufacturers today can transform your workforce by empowering your frontline workers with modern digital tools and devices that enable real-time collaboration, enhance training and improve worker health and safety.
- Build leaner factories. The ability to agilely adapt to rapid change is a defining factor between manufacturers that just survive and those that thrive. That’s why manufacturers around the world take advantage of advanced technologies to build more agile and intelligent factories.
- Create more resilient supply chains. According to the report, 74 percent of manufacturers ranked supply chain resiliency as a top priority. This is not surprising considering that, now more than ever, manufacturers are under pressure to prevent and minimize supply chain disruptions. Microsoft Cloud for Manufacturing already helps manufacturers improve end-to-end supply chain visibility and increase your resilience.
- Engage customers in new ways. If they want to gain an edge in the manufacturing industry, customer involvement is critical. As manufacturers look for innovative ways to engage customers, many sell smart connected IoT products. Our research shows that 33 percent of manufacturers’ product revenue comes from smart products today.
- Drive innovation and offer new services. Manufacturers invest in advanced technologies to create a more resilient future. According to our research, 28% of manufacturers have implemented digital twins and 4% have fully implemented them in their factories. Another 45 percent of manufacturers are in the development and proof-of-concept (POC) stage for digital twins, and 39 percent are in the same stage for augmented reality (AR). ).
- Reduce your environmental impact. A majority of manufacturing board members (59 percent) believe that reducing their carbon footprint is an important area of focus. Manufacturers are uniquely positioned to drive sustainability while saving costs and improving security through cloud-based automation, machine learning, and AI.
- Improve security. Security is a top priority for manufacturing organizations, with 62 percent of manufacturers having strict data privacy policies. Over the next three years, manufacturers plan to reduce the average time to detect cybersecurity incidents by 30 percent.
Building a Resilient Future with Manufacturing IoT
Manufacturing organizations have begun leveraging the lessons learned during COVID-19 to build resilience and build a better future. Digital transformation remains top of mind for these manufacturers as they work to increase agility, improve customer engagement and drive growth. To learn about digital transformation journeys from real-world manufacturers, read the report IoT Signals: Manufacturing Spotlight.