Redefine Enterprise Architecture for Smart Manufacturing
Build the right strategy to adopt smart technologies in manufacturing.
- Integrating legacy systems with new, smart technologies.
- Managing the sheer volume of data and effectively analyzing it for actionable insights is a complex task.
- Ensuring the security of data and network infrastructure in an interconnected smart factory environment is a major concern.
- Managing change while adopting new technologies and redefining enterprise architecture is incredibly difficult.
- Navigating evolving regulations related to privacy, data protection, and safety standards is a daunting task.
Our Advice
Critical Insight
A strategic review and scalable redesign of your current Enterprise Architecture will facilitate a smoother adoption of advanced manufacturing technologies like IoT, AI, and robotics, enhance competitive advantage, reduce operational risks, and drive long-term sustainability in manufacturing operations.
Impact and Result
Info-Tech recognizes the value of redefining enterprise architecture for smart manufacturing.
Redefining enterprise architecture will enhance operational efficiency, agility, and scalability, enabling more responsive and innovative production systems and a smarter factory. Info-Tech will provide:
- A comprehensive understanding of the benefits of redefining enterprise architecture for smart manufacturing.
- A tool to help you assess the maturity of your current enterprise architecture strategy and identify areas for improvement.
Redefine Enterprise Architecture for Smart Manufacturing
Building the right strategy to adopt smart technologies in manufacturing.
Analyst Perspective
Building the right strategy to adopt smart technologies in manufacturing.
Manufacturers are progressively embracing smart technologies, driven by the desire to increase efficiency, reduce operational costs, and enhance production capabilities. This transformative wave integrates IIoT, AI, and other advanced technologies, and heralds a major shift in how factories will operate in the future.
The benefits of smart manufacturing are substantial. Facilities equipped with connected sensors and AI can dramatically improve efficiency and productivity, enabling predictive maintenance can help anticipate equipment failures before they occur, quality control enhanced through advanced automation and machine learning technologies ensures high-quality outputs and greater compliance with industry standards, and real-time data from IIoT devices facilitates a deeper understanding of production processes.
However, this rapid integration presents unique challenges, particularly for CIOs participating in this transition. They must navigate through the challenges of historical data integration, real-time processing, predictive analytics, and fostering a culture that embraces these changes. Traditional enterprise architectures are often ill-equipped to handle the needs of a smart manufacturing environment. CIOs will need to strategically overhaul their IT infrastructure to not only support but also drive the business transformations required for successful integration of smart technologies. This begins by revisiting the enterprise architecture strategies and philosophies that are being used today.
Shreyas ShuklaPrincipal Research Director,
Industry Practice
Info-Tech Research Group
Executive Summary
Your ChallengeIntegrate legacy systems with new, smart technologies. Managing the sheer volume of data and effectively analyzing it for actionable insights is a complex task. Ensuring the security of data and network infrastructure in an interconnected smart factory environment is a major concern. Managing change while adopting new technologies and redefining enterprise architecture is incredibly difficult. Navigating evolving regulations related to privacy, data protection, and safety standards is a daunting task. | Common ObstaclesMerging new technologies with legacy systems presents technical difficulties and may complicate future scalability. Securing funding and finding the right expertise for implementing advanced technologies are significant hurdles. Employee resistance to change and enterprise-wide alignment issues can slow down or derail technology adoption efforts. Compliance with evolving regulatory standards can restrict technology choices and complicate implementation strategies. Increasing interconnectivity raises cybersecurity risks, and system upgrades can disrupt ongoing operations. | Info-Tech’s ApproachInfo-Tech recognizes the value of redefining enterprise architecture for smart manufacturing. Redefining enterprise architecture will enhance operational efficiency, agility, and scalability, enabling more responsive and innovative production systems and a smarter factory. Info-Tech will provide:
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A strategic review and scalable redesign of your current enterprise architecture will facilitate a smoother adoption of advanced manufacturing technologies like IoT, AI, and robotics, enhance competitive advantage, reduce operational risks, and drive long-term sustainability in manufacturing operations.
Manufacturers are being impacted by trends related to consumer behavior and operations
Manufacturers are operating in an increasingly unpredictable and dynamic environment. While supply chain resilience was tested during the pandemic, manufacturers now need agility for competitive differentiation while also requiring the capability for mass customization in a sustainable, responsible manner.
Key Trends
CustomizationCustomers want quick delivery of customized products.
Agility
Regionalization
Heightened global risks are forcing manufacturers to source and produce closer to consumers.
Resilience
Digitalization
Digital transformation skills are now crucial for competitive differentiation.
Digital Empowerment
Responsibility
Customer demand for eco-friendly brands and the benefits of responsible operations are shaping new sustainability goals.
Sustainability
Source: Microsoft, 2022
Mass customization is one of the hottest trends driving changes in manufacturing strategy.
Oreo has created a “custom cookie experience” that allows consumers to customize the flavor and toppings on their Oreo cookies.
The NFL allows 3D-printed football helmets through a partnership with Carbon and Riddell, a 3D-printing firm, and a sports equipment manufacturer.
Nike allows customers to personalize their shoes with different colors, patterns, and laces.
Normal makes customized 3D-printed earphones. Customers download the company’s app to take a picture of their ears, which are then uploaded through the app.
MINI owners can customize certain components on their vehicle. Customized designs for components such as door handles, decals, etc. are then 3D-printed and installed.
Source: Gray, 2019
Smart technologies are helping manufacturers address these trends
Smart technologies like IoT, AI, ML, and automation are a competitive differentiator. By deploying smart technologies to create the factories of the future, manufacturers have gained significant benefits from the top-floor to the shop floor, including greater OEE, more effective inventory management, optimized production, and empowered employees.
Manufacturers are seeing clear financial benefits in the form of improved profits and optimized costs by using smart technologies …
Up to … 50% … reduction in machine downtime.
Up to … 30% … increase in labor productivity.
Up to … 30% … increase in throughput.
Up to … 20% … reduction in inventory holding costs.
Up to … 20% … Improvement in cost-of-quality.
Sources: Microsoft, 2022; AMG World, 2023
Smart technologies are a competitive differentiator for manufacturers.
71% of manufacturers say they achieved anticipated results from smart manufacturing initiatives in 2023.ISG News, 2023
The use of smart technologies has helped 63% of manufacturers increase profitability and 61% say it’s a competitive differentiator.
INDUSTRY 4.0: A Guide for Digital Transformation in Manufacturing, SAP via IndustryWeek, 2024, and MPI, 2023
Smart factory is a top priority for most manufacturing organizations
The gap is widening between manufacturers investing in smart technologies and those that aren’t. In the near term, manufacturers are clear about their priorities. Building smart factories on the backbone of technology investments, digital transformation and sustainable practices will be crucial to meet top- and bottom-line objectives.
Manufacturers need smart factories to succeed in a complex, unstable and ever competitive environment.
86%of manufacturing executives believe that smart factory solutions will be the primary drivers of competitiveness in the next five years.
Deloitte Consulting, 2024
62%
of manufacturers are planning investments in robotics, automation, and IoT technologies to speed up manufacturing, reduce costs, and alleviate labor shortages.
Oracle, 2024
$7 BILLION
is the expected market value of generative AI in the manufacturing sector by 2032.
INCIT, 2024
Direct cost savings dominate the top objectives of investing in smart factories.
64% Direct cost savings
57%Cost savings through waste reduction and sustainability
39% Improvements in customer experience
29% Increased revenue
Source: The Manufacturer, 2022
North American manufacturers lead smart factory initiatives globally.
… 80% of North American manufacturers, 70% of European manufacturers, and 66% of Asian manufacturers already have or are implementing a smart factory.
Source: Microsoft, 2022
Manufacturers are making investments in smart technologies
Manufacturers are harnessing new and emerging technologies to build resiliency, improve quality, maximize workforce potential, and drive sustainable growth. Manufacturers continue to believe that investing in smart technologies will drive the biggest business outcomes.
AI ranks as the top capability that manufacturers are continuing to invest in.
95%of manufacturers are using or evaluating smart manufacturing technology.
83%
of manufacturers are using or evaluating smart manufacturing technology.
Source: Rockwell Automation, 2024
“ … technology alone is not the answer. To remain competitive, manufacturers need to focus their staff on embracing new technology as a core part of their evolving organizational culture, creating a technology/worker partnership that drives their business forward.”
– Cyril Perducat, Senior Vice President and Chief Technology Officer, Rockwell Automation
Manufacturers continue to struggle with smart factory initiatives
Several obstacles continue to hamper manufacturers’ smart factory initiatives; for example, inflation has been the primary obstacle to growth for two years in a row. Rising energy costs, cybersecurity, and workforce issues are other factors are that are dampening excitement about investments in smart technologies.
High inflation and lack of digital talent is hampering smart factory progress.
70% of manufacturers say they are making slow to minimal progress on their smart manufacturing roadmap.Source: ISG News, 2023
Only about 7% of manufacturers say they have digitized their factory operations extensively.
Source: Manufacturing Leadership Council, 2024
CIOs need to take specific steps to address IT challenges and support smart factory deployments
CIOs must ensure IT transformations are aligned with business needs to effectively drive smart technology adoption. IT's crucial role in facilitating the rapid adoption of smart technologies is often undermined by a lack of a long-term digital strategy and premature technology implementation.
Source: IndustryWeek, 2019
Implementation of smart technologies is stuck in pilot purgatory while business users continue to recognize their importance.
… more than 70% of companies investing in Industry 4.0 technologies, fail to move beyond the pilot phase of development …Source: World Economic Forum in collaboration with McKinsey & Co., 2019
… 69% of manufacturers said digital solutions are, and 94% said they will be an important part of their automation efforts …
Source: McKinsey & Co., 2023
Redefine Enterprise Architecture for Smart Manufacturing
Enterprise architecture software provides the tools and guidance needed to accelerate transition to smart factories using a connected enterprise architecture approach. This will help CIOs align organizational teams around a common understanding of how business functions are supported by your technology portfolio.
- Powers consumable insights, AI, and scenario analytics to support better decisions
- Workflows are significantly faster from top-floor to shop floor over monolithic systems
- One-stop-shop for E2E IT network visibility, application uptime and security vulnerability
- Air-gap between corporate systems and shop floor IT/OT
- Synchronized data backups to prevent overrides, corruption, loss, and inappropriate access
- Secure data capture via edge connectivity to reduce cost and improve data availability at the right time, to the right people
- Automated data preparation, delivery, storage, and access; retire multiple applications and sources of truth
- Monitor machine-level transactions, IoT devices, predict maintenance needs, and identify quality issues
- Stringent IT and cybersecurity required to ensure proprietary information is not compromised
Establish Interdisciplinary Architecture Teams:
CIOs should form specialized teams that combine expertise from IT, operations, and business strategy.
Prioritize Data Architecture for Operational Excellence:
Establish a robust data architecture that facilitates real-time data collection, processing, and analytics.
Implement Modular Solutions:
Focus on building a modular and adaptive IT infrastructure that can easily integrate emerging technologies.
Facilitate IT/OT Convergence With API Connectivity:
CIOs should prioritize API-led connectivity to facilitate seamless integration between OT and IT systems.
Enforce Stringent Security and Compliance Protocols:
As the digital footprint expands, ensuring the security of connected systems becomes paramount.
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