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Most Companies Still New to Smart Manufacturing and Struggling with Adoption, ISG Survey Finds

ISG survey shows widespread interest in the concept, with companies prioritizing near-term cost savings and efficiency over growth

Most companies are still new to smart manufacturing and are making slow progress with adoption, but interest in the concept is high, according to survey results released today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2022 ISG Global Smart Manufacturing Pulse Survey found nearly three-quarters of respondents (73 percent) have less than two years of ongoing smart manufacturing experience. And 70 percent say they are making slow to minimal progress on their smart manufacturing roadmap.

The survey findings were released today at the ISG TechXchange: Smart Manufacturing event in Chicago.

Despite the overall lack of experience with smart manufacturing and slow adoption rate, there is widespread interest in the concept, with 69 percent of respondents saying their organization has a dedicated structure to operate and coordinate smart manufacturing initiatives.

“Smart manufacturing, while still a relatively new concept, is a top enterprise priority,” said Prashant Kelker, partner, ISG Digital Strategy and Solutions, who delivered the survey results in a keynote address today. “Many large companies are targeting new revenue streams from smart manufacturing, which in turn is driving spending on optimizing operations.”

Kelker described smart manufacturing as the practice of leveraging technology and data in a continuous loop to connect product development, design, manufacturing, supply chain and post-sale activity to increase revenue and improve manufacturing outcomes.

More than half the enterprises surveyed state that direct cost savings (64 percent) or indirect cost savings through waste reduction and sustainability measures (57 percent) are the top objectives for their smart manufacturing initiatives, followed by improvements in customer experience (39 percent). Growth objectives such as reduced time to market (34 percent) and increased revenue (29 percent) were lower on the list of enterprise priorities.

“Cost savings and waste reduction achieved by leveraging operational data yield the savings required to invest in long-term objectives,” Kelker said. “Connected products and services that continuously adjust to customer usage will deliver significant growth dividends. Integrating that knowledge into engineering design is critical, and smart manufacturing is the means to that end.”

Survey respondents identified organizational resistance to change as a top challenge for smart manufacturing initiatives (57 percent), followed by integrating IT with operational technology (34 percent) and technical debt and legacy equipment (30 percent).

“The challenge of turning a traditional shop floor into a hybrid connected workplace is daunting but doable,” Kelker said. “What often masquerades as organizational resistance may actually be gaps in talent and barriers created by legacy investments and architecture. Everyone wants to change, no one wants to be changed.”

The ISG survey was conducted in March 2022 and included responses from executives at 75 global manufacturing companies.

In addition to Kelker’s keynote address this morning, other speakers discussing strategies for improving resiliency, adaptability and value in manufacturing at today’s ISG TechXchange: Smart Manufacturing event include industry leaders from Cyient, Patrick Industries, Bayer, Bosch Global Software Technologies, Fairlife, AGCO Corporation, CESMII, Schneider Electric, LTI and Hitachi Vantara.

The event is sponsored by Hitachi Vantara, HCL Technologies, Mindtree, Outsystems, Capgemini, Cyient, LTI and the TBM Council. Additional information is available on the event website.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 800 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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