IDC/Zebra Research





SUPERIOR PLANT FLOOR VISIBILITY KEY FOR EMEA MANUFACTURERS

More than 65 percent of European manufacturers said they plan to invest in plant floor visibility technology in the next three years as part of a push toward operational excellence, according to a recent IDC survey of more than 240 manufacturers.

In a report on the survey, IDC outlines the most critical initiatives for manufacturers during the next three years and the "extraordinary advancements" in technology that will support those efforts – RFID and 2-D barcodes in the short-term, and IoT (Internet of Things) in the near future.



"European manufacturers are getting back to basics. They are realising that their direct involvement in manufacturing operations is essential to fostering innovation and to achieve superior customer fulfilment."

Pierfrancesco Manenti, head of IDC Manufacturing Insights

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Factors Driving Operational Excellence

PLANT INITIATIVES

AVERAGE RATING ON A SCALE FROM 1 TO 5

Gain more plant floor visibility
European manufacturers believe that the most compelling approach to achieving operational excellence is through gaining better plant floor visibility. This means enabling plant floor personnel to have a better understanding of the status and performance of plant floor operations in an optimal timeframe.



Invest in Factory Automation
Manufacturers will continue investing in factory automation to standardize production, increase quality, and reduce operational costs. Automation will also enable enterprises to gather essential data from their plant floors in real-time.



Embrace green manufacturing principles: reduce, reuse and recycle.



Improve Manufacturing Flexibility
Making the plant floor more flexible will require manufacturers to completely rethink their plant floor in a way that it can be quickly reconfigured to fulfill frequently changing customer needs.



Improve maintenance management / assets utilization



Invest in plant floor IT
Manufacturers are realizing that investing in modern IT that can create a real-time decision making environment for plant floor employees will play an essential role in achieving better levels of operational excellence.



Remove unnecessary / non-value added activities



Increase sourcing from low labor-cost countries



Attract younger generation to work on the plant floor



Implement or extend existing lean / six sigma or other continuous improvement initiatives



Improve visibility along the supply chain



Improve quality



Outsource manufacturing operations



Reduce plant floor workers





Challenging Plant Floor Areas

All plant floor areas are still considered challenging

Inbound/Outbound
European manufacturers have a growing awareness of the importance of inbound and outbound processes which have traditionally been considered of marginal importance. Poor management of these processes may lead to excess inventory and poor customer fulfillment.

Manufacturing
The excess of WIP (work-in-process), which is the result of suboptimal and disconnected operational processes, particularly material flow and production, is of notable concern.

Maintenance & Quality
Ancillary processes such as maintenance and quality are considered a challenge in the modern manufacturing enterprise, as they are typically poorly coordinated with manufacturing operations processes.





Maturity Levels of Plant Floor Visibility

IDC Manufacturing Insights created a set of five incremental definitions for plant floor visibility. Each definition describes a different level of maturity of plant floor visibility and supersedes the previous one in terms of business benefits (e.g., expected impact on business performance) and technology drivers (e.g., frequency of data collection, type of data collected). The five levels of plant floor visibility can be defined as follows:

1. Limited

This is the lowest level of plant floor visibility definition where we positioned manufacturers that do not recognize or expect a particular impact of plant floor visibility on business performance. The key operational driver for these companies is merely cost cutting. These companies therefore have a very reactive attitude and would not invest in IT to support plant floor visibility. They would see this as a mere cost and in fact tend to still use manual data collection processes, supported by spreadsheets.

Definition:
Plant floor visibility is not considered relevant or required

Expected Impact on Business Performance:
Low Impact

Operational Driver:
Cost Reduction

Frequency of Data Collection:
Data is manually collected from time to time



Type of Data Collected:
Limited

Enabling Technology:
Paper, spreadsheets

2. Basic

Manufacturers at this level of maturity have basic visibility of plant floor data. This is generally limited to production data from a few areas of the plant floor. These organizations have made or are making focused investments in plant floor technologies such as factory automation, ruggedized handheld devices and barcodes. They are essentially able to gather production data from "fixed assets" (e.g., CNC machines, PLCs, controls) on a time-based fashion (e.g. at end of each day or end of each shift). This data is integrated into limited in scope manufacturing execution systems (MES) or ERP applications.

Definition:
Basic visibility of production data that is gathered in some areas of the plant floor

Expected Impact on Business Performance:
Low Impact

Operational Driver:
Cost Reduction

Frequency of Data Collection:
End of Each Shift or Day



Type of Data Collected:
Data from fixed assets (e.g. CNC Machines, PLCs, controls, etc.)

Enabling Technology:
Factory automation, ruggedized hand held devices, barcodes, MES, ERP

3. Integrated

This level of maturity is an extension of the previous one and includes those organizations that are able to gather production data from across the entire plant floor, including inbound/outbound, warehouses and production processes through widespread automation investments and end-to-end MES applications. These companies see production data collection as a way to save workers from time-consuming data entry activities, reduce overall operational costs, and improve quality, timeliness and reliability of data input.

Definition:
Production data is gathered across all areas of the plant floor, including receiving, warehouse, production and shipping

Expected Impact on Business Performance:
Medium Impact

Operational Driver:
Cost Reduction

Frequency of Data Collection:
Event-driven (e.g. at the end of batches, work orders, production phase, etc.)



Type of Data Collected:
Data from fixed assets (e.g. CNC Machines, PLCs, controls, etc.)

Enabling Technology:
Factory automation, ruggedized hand held devices, barcodes, MES, ERP

4. Extended

Going beyond automatic gathering of plant floor data, organizations with an "extended" level of plant floor visibility are able to measure plant floor performance in real-time by measuring dashboards of critical KPIs. Those companies believe that plant floor visibility has a high impact on business performance and strive to increase productivity rather than just looking for cost cutting opportunities. These organizations have extended their plant floor visibility capabilities through the use of RFID or other location-based technologies that enable real-time gathering of information, particularly from "moving assets" such as bins, pallets, racks, parts, finished goods, tools, etc.

Definition:
Real-time dashboards enable to understand the status of most critical KPI

Expected Impact on Business Performance:
High Impact

Operational Driver:
Increase productivity

Frequency of Data Collection:
Real-time



Type of Data Collected:
Data from moving assets (e.g. bins, pallet, racks, parts, finished goods, AGV, tracks, fork-lifts, tools, etc.)

Enabling Technology:
RFID/Sensors

5. Advanced

The most advanced organizations in this maturity framework are those that believe that plant floor visibility has a very high impact on business performance and is a fundamental enabler for faster decision making on the plant floor. These organizations not only have invested in automation and RFID to enable real-time visibility across the entire plant floor, they have also adopted advanced technologies such as Big Data analytics, social business, cloud, and Internet of assets to create a real-time, collaborative decision-making environment that enables their plant floor employees to make informed decisions faster.

Definition:
Plant floor visibility is fundamental to achieve faster decision-making capability on the plant floor. This enables autonomic or self-healing processes, teams and production systems

Expected Impact on Business Performance:
Very High Impact

Operational Driver:
Increase productivity

Frequency of Data Collection:
Real-time



Type of Data Collected:
People knowledge and collaboration

Enabling Technology:
Big Data Analytics, Social Business, Cloud, Internet of Assets





Evolution of the Maturity Framework



With an average level of plant floor visibility between "basic" and "integrated", the framework highlights how many European manufacturers are still immature in their understanding of plant floor visibility. But for how long?



In three years from now, the level of plant floor maturity will be significantly higher than today among European manufacturers. What are you waiting for?