The future-ready manufacturer New research shows how technology investments can yield priority outcomes across the value chain The future-ready manufacturer 2 Contents Introduction 3 Secure the digital factory and enterprise 4 Accelerate factory worker productivity 9 Improve supply chain resilience 15 Deliver frictionless customer experiences 20 Research background and acknowledgements 24 Conclusion 28 The future-ready manufacturer 3 Across the world, manufacturing is undergoing a profound transformation. A broad set of macro challenges, ranging from disrupted supply chains, environmental challenges and labor shortages to rising costs, and geopolitical risks, are forcing manufacturers to rethink nearly every aspect of how they operate and go to market. To bolster competitiveness and address challenges across the value chain, many manufacturers have made digital investments to improve procurement and supply chain operations, accelerate digital factory transformation (including OT security), and empower connected workers, and to optimize customer support operations. While these investments set the foundation for growth, our research shows that manufacturers face challenges maximizing ROI. are making significant progress in improving OT asset security only 33% have made significant progress reducing supply chain risk through improved supplier communication and collaboration. <1/3 29% have made significant progress in digitally enabling factory floor workers to drive productivity only 37% cite the need for improved channel partnerships to improve customer service ~ half 48% Likewise, only 39% of manufacturers rate themselves mature in their ability to harness technology through an integrated approach to digital transformation. One in four characterize their digital maturity as low (with a siloed use of digital technology or only starting some aspects of a digital strategy). Manufacturers who are unable to improve their ability to leverage their technology investments will likely continue to suffer the impacts of macro uncertainty and risk being outpaced by the competition. The good news? Manufacturers have a major opportunity to accelerate performance by driving enhancements across the value chain. This isn’t just about deploying new tech. Crucially, manufacturers need to connect data and insights across multiple systems and teams, while they automate tasks across people, processes, and technologies. Those who embrace technology are far better positioned to thrive in macro uncertainty. Simply put, they are future-ready. Introduction To drive real transformation, you must be able to connect data across technology and process silos, analyze that data to develop insights, and then drive action from those insights. Most manufacturers invest heavily in collecting and analyzing but miss the action step.” Allen Hackman, ServiceNow AVP, head of manufacturing industry ServiceNow and Dynata recently surveyed 1,901 manufacturing leaders worldwide. We found that for most manufacturers, technology investments are not fully translating into priority business outcomes. Secure the digital factory and enterprise The future-ready manufacturer 5 Cybercriminals are targeting manufacturers where it hurts: in OT. While IT leaders have increasingly focused on cybersecurity threats in recent years, OT has often lagged behind. This has created opportunities for hackers, who funnel into main IT systems through OT holes. The potential consequences are calamitous. Breaches can halt operations and cost millions per hour. This is not news to manufacturers. Eighty percent of respondents in our survey place a high priority on improving OT security, and they have clear related business outcomes they want to achieve: preempt attacks more effectively, prevent factory downtime, and keep their employees safe. But more needs to be done to manage risks, as only one-third (33%) of respondents have made significant progress securing their OT systems. OT and IT are converging. Security must converge too. Question OT2. What is the current level of focus or investment your organization is making to improve OT security? Question OT3. How much progress has your company made in improving the security of your OT assets? manufacturers that say they have a high focus or investment on improving OT security manufacturers that have made significant progress in securing their OT systems Australia & New Zealand 87% 38% France 78% 32% Germany 85% 35% India 88% 60% Japan 54% 8% Korea 63% 17% UK 84% 34% US 86% 33% The future-ready manufacturer 6 Many manufacturers lack a holistic OT and IT security strategy and lack visibility into potential threats. When different stakeholders manage IT and OT security separately there is no single strategy for managing the attack surface as a whole. This creates visibility gaps that increase vulnerability. Just over one-third (35%) of survey respondents say they’ve made significant progress in achieving a single, comprehensive view of all OT vulnerabilities. Only 36% say they have made significant progress in proactive vulnerability response. When manufacturers lack visibility, they can’t address vulnerabilities. When a breach does occur, they cannot quantify the impact. They may not even understand how the breach happened or how to resolve it. Know your vulnerabilities 67% BC 57% BC 54% 46% 34% 28% 36% 31% 17% 16% 17% 12% Real-time and precise inventory/ visibility of OT assets Proactive vulnerability response (response playbook) Prioritize threats based on business impact A single, comprehensive view of all OT vulnerabilities Significant Some None (620) (1165) (97)(Sample size) Progress Made in Improving security of OT Assets Those who have made significant progress in improving the security of OT assets overall have commonly made significant progress in all four OT security areas. Significant Progress Made by OT Security Area Question OT6. In which of the following areas of OT security has your organization made progress? The future-ready manufacturer 7 1% 4% 24% 63% 64% 72% 31% 9% Significant Some No Progress Extensively Somewhat Don't Progress Made in Improving security of OT Assets Extent of Managing OT and IT Assets Together Manufacturers who have made significant progress in improving the security of OT assets are much more likely to manage OT and IT assets together Question OT4. To what extent do you manage OT and IT assets together? OT and IT. Better together. Leaders who experience a higher level of OT visibility have something in common: they are more likely to embrace the convergence of OT and IT. Seventy-two percent of respondents who have significantly boosted their OT security manage OT and IT assets together and show increased capabilities across OT security. To withstand disruption, manufacturers must fundamentally rethink their approach to OT security, introducing both the technologies and operational mindsets needed for OT to be part of an overall enterprise risk approach with IT. The first step for manufacturers is to understand what OT and IT assets they have. But visibility goes beyond asset lists, helping you determine what OT and IT devices are in play and how they interact. Once you know what’s there, you can begin untangling the web of visible and often invisible dependencies that create vulnerabilities. (620) (1165) (97)(Sample size) The future-ready manufacturer 8 To mitigate threats in real time, manufacturers must integrate data from multiple sources on a single platform: Gain visibility into your OT and IT environment: Automate finding and mapping of all IT and OT assets in real time and eliminate blind spots across your OT and IT landscape Assess the vulnerability of your environment: Identify, assess and strategically prioritize vulnerabilities based on business impact Proactively manage and respond to OT risks: Connect automated digital workflows to your OT management for proactive maintenance and threat response Leadership matters Manufacturing is changing fast, and the old, siloed ways of managing OT environments won’t keep up. In an era of hyperconnected manufacturing, companies need a scalable and automated approach to OT and IT management. Better OT/IT convergence starts in the C-suite and can help drive outcomes that position manufacturers to prevent unplanned downtime, proactively protect against cyberthreats, and drive down costs. Cybersecurity must be prioritized in the digital transformation process in order to safeguard against online attacks and guarantee the integrity of data and systems. Chief revenue officer, consumer products manufacturer, Australia/NZ 3 ways to secure the enterprise Accelerate factory worker productivity The future-ready manufacturer 10 Empower the workforce with democratized knowledge, and automated, digital task management for problem solving, training and upskilling. Forward-thinking manufacturers are turning to shop floor digitization to enhance operational efficiency and future-proof their operations. But to reduce cost on the factory floor, manufacturers need to think beyond equipment automation and focus on how teams get work done. Even on the most high-tech factory floors, workers often rely on manual, paper-based, non- standardized processes. These processes often slow down work, decrease productivity, increase human error and unplanned downtime, and create poor experiences for employees. All this hurts the bottom line. When production stops, the cost to medium and large manufacturers can reach $1,000,000 an hour. Unleash productivity While manufacturing leaders recognize the importance of digitally enabling factory floor workers, they also know there is progress to make. Eighty-two percent of respondents place a high priority on factory floor digitization, yet only 37% indicate they have made significant progress in doing so. This lack of digitization can hamper manufacturers’ ability to meet their top business outcomes too. Respondents ranked increased employee productivity, cost reduction, and risk management as their top three priorities.