In an increasingly complex manufacturing ecosystem, researchers count information-rich, streamlined process optimization and speed among the drivers behind cost reduction in the new connected value chain.
Yet, for many organizations, a digital transformation strategy is still generally missing – the goals remain relatively traditional and digital initiatives are ad hoc.
What lies ahead for them is an uphill battle to shore up efforts that will compete against organizations that are well positioned to see integrated, scaled up digital efforts.
If the picture painted by the Internet of Things (IoT) has any clout, the manufacturing industry as a whole is in active pursuit of transformation. According to the International Data Corporation Worldwide Semiannual Internet of Things Spending Guide, global IoT spending will experience a compound annual growth rate (CAGR) of 15.6 per cent over the 2015-2020 forecast period, reaching $1.29 trillion in 2020.
Worldwide spending on the IoT is forecast to reach $737 billion in 2016 as organizations invest in the hardware, software, services and connectivity that enable the IoT, according to market intelligence from IDC.
The industries forecast to make the largest IoT investments in 2016 were Manufacturing ($178 billion), Transportation ($78 billion) and Utilities ($69 billion).
IDC further reports that given Manufacturing’s position as the leading IoT industry, it’s no surprise that manufacturing operations is the IoT use case that would see the largest investment ($102.5 billion) in 2016.
These numbers tug toward an irreversible development: embracing digital is a must. By and large, organizations that recognize the effects of digital disruption are poised to leverage the opportunities it presents. Those that are married to large legacy business models will inevitably need to become better equipped to leverage the transformation effectively.
For more information, visit www.idc.com.
This article was published in the November 2017 issue of Machinery and Equipment MRO.