As the holiday rush comes to a close, so does 2013. From the cloud to the shop floor and beyond, it was a year of software innovation and expanding options for manufacturers. What's around
Businesses turn IT focus toward customers, the cloud
Bob Parker, group vice president at Framingham, Mass.-based IDC Manufacturing Insights, predicts that the major focus for manufacturers in 2014 will be building better, demand-oriented, data-driven value chains. "Lean manufacturing will live on," he said. "Everything will be calibrated to customer demand, with evidence-based management and data analytics being huge investment areas for manufacturing companies."
Advanced robotics, both on the factory floor and in the warehouse, will make 2014's value chain "digitally executed," according to Parker, as sensors and wireless communications become even more common parts of the manufacturing process.
According to Dylan Persaud, managing director at Toronto-based Eval-Source, cloud computing is poised to become more popular in 2014, and manufacturers that are considering a move to the cloud will need to educate themselves on the ever-expanding list of vendors and hosted options to ensure that they choose providers with long-term staying power.
Manufacturing IT trends of 2013
Learn what the big questions were in 2013
"Some of the smaller, local cloud providers might not be around in a year or two," he said. "It's not only about competition, but about big players like Cisco [Systems Inc.] now getting into the market. Even the telecom companies are starting to support IT like those services, as well as some of the larger resellers." Smaller cloud service providers -- local cable and Internet companies, for example -- are in danger of disappearing, Persaud explained. To a degree, so are the smaller cloud software vendors entering an already saturated SMB cloud market where it's difficult to stand out. Larger cloud vendors with more visibility, however, aren't going anywhere, he said.
Parker expects hybrid cloud to be the preferred cloud model of 2014, with big guns like SAP AG moving to support a combination of on-demand and on-premises deployment for ERP. Functionality that needs to be upgraded quickly and must be flexible and accessible -- particularly on mobile devices -- will most typically move to the cloud, he said.
The biggest technology shift that Parker sees in the works is the convergence of the "three T's" -- information technology (IT), operational technology (OT) and consumer technology (CT). "These are all coming together to change the technology investment models," he said. "We're seeing IT supporting the CFO [chief financial officer], the back office, order management, finance, accounting, HR and other administrative tasks. The OT is becoming the basis for customer experience, product management and supply chain and factory technology."
The supply chain of 2014
On the supply chain side, Persaud predicts that supply chain collaboration will be the area to watch in 2014. "Partners will be looking from end to end, not only to supply what the customers need, but to build that product," he said. "They're going to be involved with every stage of the supply chain, from raw materials providers to the assembly people that actually put them together. [This is important], because if, say, a part isn't available, everyone will know and be able to reconfigure their ETA."
Mobile will factor into this supply chain collaboration focus, Persaud explained, as more workers on the plant floor will have access to smartphones and tablets and be better connected to accurate, real-time information on materials and parts moving throughout the supply chain.
A challenge for manufacturers in 2014 may be deciding how -- and if -- an IT-heavy supply chain would work in their current business structures. "What organizations need to understand is that the Flintstones didn't become the Jetsons overnight," said Simon Jacobson, a research vice president at Stamford, Conn.-based Gartner Inc. "While the business may want to become more digitized, especially dealing with customers and especially as supply chains become more complex, creating a functional system of record still needs to be addressed."
Paperless manufacturing has been a buzzword for the past decade, he pointed out, but many companies are still regularly using Excel sheets. "It's not about finding the next big things, which are already here in cloud, social and mobile, but there is a lot of modernization that needs to happen before we can get to the factory of the future."
Next dimensions of 3-D printing
3-D printing, a favorite topic of next-gen water cooler talk in 2013, will continue to dominate headlines in 2014, experts say. "When it comes to complex projects and prototypes, or a product that needs to be constantly changed or tweaked, that's where 3-D printing comes in," said Persaud. "We're seeing a lot of prototyping shops popping up, and 3-D printing allows for that service," where customers come in with design requests and blueprints, and come out with finished products, he explained. "It cuts your costs if you're an inventor, for instance; you can save on costs like molding and production."
Parker compares 3-D printing today to the "home-brewed" Apple computers of the early ‘80s, which were very different from the IBM mainframes of their day. "You've got vendors like Cubify and Makerbot, and you've got the homemade 3-D printers," he said. "Over time, those differences kind of filled in [for computers], and I see 3-D printing the same way. It's coming up from the basement to the shop floor."
With so much promising technology to invest in, cash-strapped manufacturers may feel that their competitors are innovating faster than they are with modest IT budgets. However, while spending activity may be slightly higher in 2014, most consumers are still being conservative with their technology purchases, according to Jacobson.
"[IT spending] is like a game of dodgeball, he said. "There's one person who runs up to the line and fakes throwing the ball, and everyone flinches. It's the same with IT budgets for manufacturing applications -- everyone says we're allocating and ready to spend, but for most, the ROI and business case [for spending] is still hazy."
Follow SearchManufacturingERP on Twitter @ManufacturingTT.
This was first published in December 2013