The manufacturing organization and manufacturing facilities in general are often disconnected from many other parts of the business. Sales, finance, marketing, R&D, and IT organizations are often operating at completely different locations than the manufacturing unit of the company.
For this reason and many other cultural differences, corporate IT professionals, and CIO's in particular, have had less influence and control over IT in the plant than in many other parts of the business.
Over time this has created many challenges for these organizations and many are reaching a breaking point.
Often, the legacy software investments at the plant level are heterogeneous from plant to plant creating a maintenance nightmare.
Increasingly, companies are also trying to interoperate between manufacturing software and other enterprise applications, which can be very challenging without centralized management of manufacturing IT.
Many companies are starting to question the security and viability of plant networks, which are often also separate from the corporate network and traditionally have been slow to adopt standardized technologies like Ethernet.
For all of these reasons and more, our recent research has shown that best-in-class companies — defined as the top 20% of aggregate responses based on operational equipment effectiveness, network uptime, network TCO, and operating margin vs. plan — are shifting their strategy and beginning to align plant and corporate IT.
However, before we dive into how companies are addressing these challenges, we should look at some quantitative data on what internal and external market pressures in particular are driving companies' manufacturing operations when it comes to IT and networking.
From this data, which is from our April 2011 research report on Industrial Networking, we can see that the top external pressure is consistent with almost every other manufacturing study Aberdeen has conducted this past year: the need to reduce operating costs.
Many organizations are still feeling the pinch from the global recession and the fear of inflation in labor and raw material pricing has many firms looking for cost cutting anywhere they can in an already Lean environment.
Internally, there are also pressures impacting the industrial network and we can see that those rising to the top are closely related to the top external pressure of reducing costs.
To aid in this effort, organizations are looking for improved visibility into manufacturing operations as well as a reduction of disparate networks on the shop floor.
Where Does the CIO Come In?
Manufacturing leadership is looking to take cost out of manufacturing. They are also looking to reduce the risk of adverse events from occurring in operations.
At the same time, manufacturing leadership lacks visibility into operational data and is having issues maintaining the current plant IT infrastructure.
To address these pain points, CIO's can and do take very different approaches. However, some of the main ways CIO's from best-in-class companies are differing from other companies is in the following ways:
- They are over 75% more likely than other companies to create cross-function teams between operations leadership and IT for the deployment and design of manufacturing systems and networking infrastructure
- They are over twice as likely as other companies to standardize and harmonize the manufacturing software landscape across multiple facilities
- They are over twice as likely as other companies to interoperate between manufacturing systems and other enterprise applications like enterprise resource planning, supply chain management, and product lifecycle management.
Companies that have aligned their IT strategy with thier manufacturing operations have a clear vision for the future and it does not involve an adversarial relationship between the CIO and operations leadership.
Top-performing companies will learn how to have these different groups partner effectively to create a competitive advantage through a lower cost-basis and more flexible manufacturing environment..
Matthew Littlefield is a Senior Research Analyst, Manufacturing at Aberdeen Group