1. The Digitization of the Manufacturing Industry Kimberly Knickle Vice President, IDC
May 10, 2017

2. Agenda Driving Change and Digital Transformation in Manufacturing
Technology as a Platform for Innovation and Growth
Smart Manufacturing, Connected Supply Chain, Connected Products
Funding the Transformation

3. “
The most damaging phrase in the language is: ‘It's always been done that way.’”
– Grace Hopper

4. Drivers for Digitization
The Digital Transformation (DX) Delta – Industry Leaders Widen Performance Gap
Data as Digital Capital – Pressure to Maximize Value from Data
Talent Crunch – Global Demand for Digital Workers
Revolutionizing Industrial Processes – Focusing on Application of Tech, not Scale
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5. What is Digital Transformation?
Leadership Transformation
Relationship Transformation
Information
Transformation
Operating Model
WorkSource Transformation

6. Digitally Transformed Manufacturers
Leadership Transformation
Relationship Transformation
Information
Transformation
Operating Model
Transformation
WorkSource Transformation
33%
20%
60%
75%
60%
of top executives will have technology leadership experience.
more aftermarket revenue via quality measures, enhancing customer experience
derive new revenue streams from information-based products and services.
update operations with IoT and analytics to mitigate risk and speed time to market
of plant floor workers depend on automated assistance technologies – robotics, 3D print, AR/VR

7. Digital Business Transformation: By 2018, Only 30% of Manufacturers Investing in Digital Transformation Will Be Able to Maximize the Outcome; the Rest Are Held Back by Outdated Business Models and Technology
Digital Resister
Digital Explorer
Digital Player
Digital Transformer
Digital Disruptor
Business is a laggard, providing weak customer experiences and using digital technology only to counter threats.
Digitally enabled customer experience and products are inconsistent and poorly integrated.
Business provides consistent but not truly innovative products, services, and experiences.
Business remakes existing markets and creates new ones to its own advantage and is a fast-moving target for competition.
Business is a leader in its markets, providing world-class digital products, services, and experiences.

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Integrated Operations: By the end of 2020, 50% of manufacturers will derive business value from the integration of supply chain, plant operations, and product and service lifecycle management.
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9. The Future of Manufacturing
Industry Clouds and the Platform Economy
Data as Digital Capital
OmniSource Engineering
Strategic Asset Management
Enterprise Digital Twins
Responsive Experience
Connected Service Execution
Integrated Enterprise Quality
Source: IDC
Resilient Lean
Embedded Intelligence

10. Platform for Innovation and Growth
Source: IDC, 2015
Develop and execute a vision for digital transformation
Create flexible and reliable human resource model
Take an ecosystem-first approach to delivering products and services
Optimize business processes for speed, efficiency, quality, and agility
Manage information effectively

11. Technologies with the Greatest Impact
Q. Which of the following do you believe will have the most impact on your business over the next 5 years?
Source: 2016 Vertical IT & Communications Survey, IDC, May, 2016
Total N=741
Cloud
Business Analytics
Security
Big Data
IoT
Mobile
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12. Current Stage of Deployment

13. Current Stage of Deployment

14. Connected Supply Chain Using IoT to improve supply chain orchestration
Smart Manufacturing Using IoT to improve factory performance in the plant
Production or asset optimization
Preventative and predictive maintenance
Energy management
Safe workforce
Connected Supply Chain Using IoT to improve supply chain orchestration
Assets or inventory management
Logistics – inbound and outbound
Visibility and tracking
Risk and resiliency
Connected Products Using IoT to enhance product performance, service delivery
Remote operations
Preventative maintenance
Product-enabled Service
Content/consumables delivery

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Connected Products:
An Integrated, Engineered System
Autonomous Capabilities
Remote Operations
Apps/Service Delivery
Content Delivery
Infotainment
Mobile Device Integration
Sensors, Software
Network Communication
User Interface
Cloud
Big Data and Analytics
Storage
Security
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16. Factory of the Future Technology and Process Improvements
Operational Equipment
Traditional machine, Automated machine, Robotics, 3D printing
Computing hardware
Analytics Mobile Sensors
Management
Digital Twin
Product
Efficiency
Energy management
Supply Network Optimization
Modularized production
Machine learning
Preventive
maintenance
Real time reporting
Management software
ERP CRM SCM EAM
Virtual Prototype simulation
Mass customization
Logistics / warehouse automation
MFG Automation
Inventory tracking
Digital MFG
Connected products
Additive MFG
Robotics
Operating software
PLM MES
EMI SCADA
Predictive Maintenance
Virtual Commissioning
Asset tracking
Connectivity
3G/4G, IPV6, RFID, WIFI, bar code, sensor, mobile devices, camera, etc

17. Funding the Transformation
Title of Presentation
Client
Funding the Transformation
100B
in savings
better coordination
in recommendation-oriented device interactions 6X
increase
Customer experience is redefined CX
Productivity of knowledge workers 2x

18. For Success Executive Leadership Cultivate Partners Look beyond ROI
Have a roadmap
Re-invest cost savings
Consider process and change

19. The only thing worse than being blind is having sight but no vision.”“
The only thing worse than being blind is having sight but no vision.”
– Helen Keller

20. Thank you! Kimberly Knickle @kimknickle kknickle@idc.com www.idc.com
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