Protecting manufacturing production in turbulent times

Production is the heartbeat of the manufacturing enterprise. When it slows or stops, manufacturers can fail to meet key customer demands, lose near-horizon revenue, and risk their future order book. Industry research shows this is very real, with production downtime exceeding a total cost of $300,000 per hour, according to Information Technology Intelligence Consulting.

With unpredictable market forces—including rising budget requirements, inflation, cyber risks, increased labor costs, and supply chain disruption—how can manufacturing production operate continuously and consistently? 

The future-ready manufacturer, based on a 2023 global survey of more than 1,900 manufacturing leaders conducted by ServiceNow and Dynata, reveals manufacturers have opportunities to build greater resilience and increase efficiency across the end-to-end value chain.

A confident, data-driven supply chain

A healthy supply chain fuels production. Yet 67% of survey respondents cite a high risk of supply chain disruption over the next 12 to 18 months.

Managing supply chain risk requires an accurate understanding of your supply chain dependencies and your suppliers—and their suppliers. When unforeseen disruptions arise, manufacturers need to analyze large volumes of supplier data. But inaccurate or duplicated supplier records, manual processes, and siloed systems prevent quick and confident action.

Manufacturers making progress in reducing supply chain risks are investing in connecting data and insights from multiple systems, such as enterprise resource planning (ERP) and customer relationship management (CRM), according to the survey.

Using hyperautomation to drive efficiencies can improve manufacturers' ability to assess supplier risk and compliance, accelerate supplier onboarding, and collaborate with suppliers to manage disruption.

Digital skills to drive the factory floor

Factory workers are integral to production. The survey shows that lack of know-how, skills, and talent is one of the biggest challenges on the factory floor.

With rising labor costs and a shortage of workers, there isn’t enough skilled labor to operate production. Older workers are retiring, and new entrants to the workforce expect digital ways of working.

A digital-focused strategy can help manufacturers bridge talent and labor shortage gaps. According to the survey, manufacturers making the most significant strides toward digitally enabling factory workers are:

• Accelerating time to expertise with digital tools that aid problem-solving, training, and upskilling

• Implementing a knowledge repository to share best practices across workers and factories

• Managing tasks digitally to connect step-by-step processes

These leaders are also making greater use of process automation, dedicated knowledge management, and AI and machine learning.

A secure foundation in the factory

Because of the convergence of unsecured operational technology (OT) into IT systems and networks, manufacturers are one of the most targeted industries for ransomware attacks, according to the IBM Security X-Force Threat Intelligence Index 2023. Consequently, 64% of respondents to the ServiceNow/Dynata survey say they face a high to very high level of OT risk in the next two years.

The research shows that less than half (35%) of manufacturers have a real-time, accurate view of their OT vulnerabilities. To improve OT security, manufacturers are:

• Implementing or automating end-to-end OT service management and change management

• Increasing visibility/inventory of all OT and IT assets

• Improving joint governance of OT and IT security

Manufacturers often manage OT and IT separately, but OT and IT teams need to work together. A single system of action can help untangle the contextual dependencies and vulnerabilities between OT and IT, devices, applications infrastructure, and third-party integrations that make an organization vulnerable. Once risks are identified, they can be proactively resolved.

Collaboration across the entire value chain

Only 39% of surveyed manufacturers consider themselves digitally mature, meaning they have an integrated approach to digital transformation that’s connected across the value chain. These manufacturers see themselves breaking down traditional silos across their organization.

They also report more significant progress in improving the security of OT assets, reducing supply chain risk through supplier collaboration, and digitally enabling factory workers.

The sum of the entire value chain of a manufacturer is greater than the individual parts. Yes, manufacturers can manage customer experience. They can control production in the factory. They can also spur product innovation and product engineering to keep manufacturing production efficient.

A single unified digital platform can connect insights and propel action across the value chain, streamlining the entire process.

Find out more about future-ready manufacturing. See how manufacturers can unlock the potential of digital transformation across the value chain in the complete ServiceNow/Dynata research report.

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