Where ERP Is Making The Greatest Contributions To Growth · 2018-08-08 · ERP platform to improve data quality. Comparing those manufacturers who have adopted Mobile ERP platforms

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Where ERP Is Making The Greatest Contributions

To GrowthIQMS Manufacturer’s Survey Results

Q2, 2018

http://www.iqms.com


Executive Summary...............................................................................................................................3Methodology....................................................................................................................................3Where ERP is Contributing to Growth............................................................................................4Managing For Growth Using Analytics & Business Intelligence (BI)............................6Data Accuracy Is Driving Mobile Analytics, BI, And ERP Access.....................................8How Manufacturers Are Improving Product Quality.............................................................11

Table of Contents

Where ERP is Making the Greatest Contributions to GrowthIQMS Manufacturer’s Survey Results | Q1, 2018


Executive Summary

• 81% of manufacturers say real-time monitoring is improving their business.• 72% of manufacturers say real-time monitoring is essential for streamlining and making

inventory reconciliation more efficient.• 69% are relying on real-time monitoring to increase the accuracy of tracking production

time, downtime, total parts created, rejects and parts to be produced. • 63% are relying on real-time monitoring and consider it essential for tracking machine

utilization, scrap and downtime reporting. • 60% say analytics and Business Intelligence (BI) are essential for managing manufacturing

operations today. • 59% of manufacturers growing 10% a year or faster are adopting and using supplier

inbound quality management applications and tools.• 53% specifically rely on real-time monitoring to increase Overall Equipment Effectiveness

(OEE) accuracy.• Manufacturers that are growing revenues 10% or faster per year are more advanced in

the areas of analytics, BI, and mobile ERP than their counterparts.

Manufacturing is a digitally driven business, where analytics, mobile apps, quality management and real-time monitoring are pivotal technologies that enable faster growth. The latest IQMS survey of 151 North American manufacturers provides insights into how these technologies are enabling more profitable revenue growth, reducing costs, time-to-market and improving quality.

It’s evident from the survey results that high-performance manufacturers combine analytics and Business Intelligence (BI), mobility, quality management applications, and real-time monitoring to gain a clear, 360-degree view of their shop floors. High growth manufacturers with plant locations proliferating on a global scale are setting the ambitious goal of having 360-degree views of their shop floors anywhere in the world at any time. Manufacturers are maturing quickly in their adoption and use of analytics and BI. The majority expect to access dashboards and reports on tablets and smartphones anywhere, anytime. According to our 151 manufacturing respondents, having accessibility to analytics and BI reporting on tablets and mobile devices is essential to running their production operations. High-performance manufacturers in the survey have assimilated analytics, BI, mobility, and advanced Manufacturing Intelligence into daily operations. They’re relying on analytics and BI to predict outcomes and plan production with a much greater level of precision than ever before.

This survey’s goals include determining which factors have contributed to manufacturing growth over the last 12 months, how manufacturers measure product quality, determine the level of importance they place on mobility, assess their level of interest and adoption in analytics, and gain insights into how they are using real-time monitoring.

Methodology

IQMS created the survey and collaborated with TechValidate to have 151 IQMS customers and prospects interviewed in May 2018. Respondents were offered a $20 Amazon Gift Card as an incentive to complete the survey.


Where ERP Is Contributing To Growth

Manufacturers look to five core areas of their ERP systems to help drive faster revenue growth. Managing inventories to reduce costs, production delays and improve on-time deliveries is the highest priority. This is closely followed by having an accounting and financial management system that can support multiple sites, currencies, and has Accounts Payable (AP) and Accounts Receivable (AR) systems that can support the variety of transactions their specific business generates. Purchasing & Procurement, Quality and Supply Chain Management (SCM) also directly contribute to revenue growth.

27% of the manufacturers in our survey are growing at 10% or year. They’re taking a deliberate approach to combining analytics, BI, real-time monitoring and mobility to support a more aggressive growth strategy than their peers. These top 27% are also concentrating on expanding operations by either acquiring manufacturers in adjacent market areas or building new plants and production centers. As a result of these aggressive growth strategies, many are concentrating on scaling manufacturing inventory management across all plants and production centers while either extending or acquiring new accounting and financial management applications that can help them scale their expansion plans. Manufacturers attaining 10% or higher growth a year have a big impact on the top five most valuable ERP modules driving revenue growth today.


Manufacturers growing at 10% or faster a year are also exceptionally good at launching new products and services and credit their sales and marketing teams for fueling growth. Both areas improved 12% over the last year. The 27% of manufacturers who are attaining 10% or more growth per year have also seen product quality and short-run production flexibility improve. This high-performance group of manufacturers relies on these two areas to increase resales to existing customers.

Bottom Line: Manufacturers attaining 10% or higher growth per year are taking a deliberate approach of orchestrating core ERP modules to enable faster growth. They’re also relying on analytics, BI and real-time monitoring to provide higher production quality, more short-run production flexibility and earning more customer referrals than last year.


Managing For Growth Using Analytics & Business Intelligence (BI)

Manufacturers are looking to analytics and BI applications to gain the insights they need to improve the performance of every aspect of their operations. 73% consider analytics and BI applications essential for increasing production capacity with better resource planning. High-performance manufacturers are combining real-time monitoring with analysis and BI to anticipate problem areas better and address them faster (68%). Maintaining and improving product quality by continually comparing finished goods to quality standards (63%) and improving demand forecasting from channels (63%) are where manufacturers are making the greatest impact with analytics and BI.

The survey also found that manufacturers who are leading their industries in analytics and BI adoption are moving beyond using these applications for reporting and historical analysis. Early adopter manufacturers are discovering new ways to use predictive analytics based on broader data aggregation their industry counterparts. Leading-edge manufacturers are piloting and launching Hadoop applications to streamline every phase of production including quality assurance and maintenance, repair and overhaul. The greater the maturity of any manufacturer working with large-scale data sets and capable of predicting machinery performance, the more competitive they are with their time to market and cost advantages.


The highest performing manufacturers prove to be very adept at selectively choosing and combining technologies to attain specific business objectives. All manufacturing industries represented in the survey are known for their rapid product lifecycles, relentless focus on quality and cost reduction. One of the key findings of the survey is how easily manufacturers are either acquiring or building production centers to add new product lines and expand into new markets.

What high-performance manufacturers have in common across all industries is how important they see mobile access to analytics and BI apps from the plant floor. 72% believe having mobile access to an ERP system, specifically analytics and BI data, is extremely valuable. Responding to the customer, sales and distribution partner queries on orders, managing custom orders through the production process, coordinating with suppliers, and averting potential production delays including line stoppages are a few of the many information needs manufacturers are relying on mobile access of analytics, and BI information from their ERP systems while on the plant floor.

Bottom Line: Analytics and BI are enabling a new era of manufacturing today. Moving beyond reporting what happened in the past, analytics today are enabling manufacturers to plan and predict the probability of future events and make the most of new opportunities.

How Valuable Are Analytics and Business Intelligence (BI) for Managing

Manufacturing Operations Today?

How Important is Having Access to Your ERP Data, Including Analytics & BI,

Across the Plant Floor?

23.8%

36.4%

27.8%

6.6%5.3%

Extremely valuable

Very valuable

Moderately valuable

Slightly valuable

Not at all valuable

0 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Not at all important

Slightly important

Moderately important

Very important

Extremely important

n = 151IQMS Manufacturing Survey, Q1, 208

23.8%

25.8%

24.5%

16.6%

9.3%


Data Accuracy Is Driving Mobile Analytics, BI, And ERP Access

The majority of manufacturers, 80%, say they have adopted mobile access as part of their ERP platform to improve data quality. Comparing those manufacturers who have adopted Mobile ERP platforms with the compliance and quality management methods they used today yielded interesting results. These include the following:

• 67% of manufacturers rely on Mobile ERP platforms that also support analytics and BI apps to stay in compliance with federal and regulatory requirements.

• Manufacturers in the most regulated industries rely on their Mobile ERP platforms, analytics, and BI apps to provide predictive alerts of when specific machines will potentially fall out of compliance using a combination of OEE and advanced algorithms that predict MTBF and potential slowdowns before they happen.

• A core component of data quality is the accuracy of supplier data, with 56% of manufacturers relying on Mobile ERP platforms to aggregate, analyze and provide real-time updates on supplier quality management performance. Mobile ERP platforms combine analytics, BI and quality management apps to provide real-time updates on inbound inspection, quality levels by product lot and all relevant quality metrics by the supplier.

• Aerospace and Defense manufacturers are relying on the combination of Mobile ERP platforms combined with analytics, BI, compliance, and quality management apps to track Cost of Quality, know the cost tradeoffs on projects immediately and stay in compliance to government sourcing and production requirements.

Manufacturers see Mobile ERP access as an enabling technology that provides them greater data accuracy, improved operational efficiencies and reduced production delays. The survey revealed that the highest performing manufacturers concentrate on reducing the time it takes to get back to customers, sales teams, partners, and resellers by having every member of the production team able to access real-time production data from their mobile devices and tablets. Looking for a speed advantage versus competitors, many manufacturers are making an abbreviated series of status updates available directly to the field using mobile ERP platforms and apps. Mobile ERP access is also being extensively used for cross-functional communication and collaboration between engineering, marketing, and production to make sure only the most profitable, scalable product configurations are designed, built and sold. Mobile ERP benefits are ranked in order of the percentage of manufacturers who consider access extremely/very important.


Manufacturers have high expectations for mobile ERP access, with more than 50% of them saying that access across the shop floor is extremely/very important. In manufacturers already using mobile ERP applications and platforms, the focus is on how to capture data with greater accuracy then use the insights gained to improve operational efficiencies and reduce production delays.

Manufacturers attaining the fastest revenue growth are relying on mobile ERP apps and platforms as a foundation to increase supplier quality management and compliance faster through the use of alerts. Alerts are also pervasively used across shop floors of manufacturers, informing production engineering, manufacturing schedulers, and production supervisors on the latest updates on machinery, orders and potential delays slowing down production. One of the respondents from an A&D manufacturer said that mobile ERP access is enabling them to meet demanding engineer-to-order product requirements and build products on schedule due to better coordinated and real-time data sharing across the supply chain and with subcontractors.


Bottom Line: Keeping customers, sales teams, distributors and service partners informed with the highest quality data possible are factors fueling the adoption of mobile ERP access. The highest performing manufacturers in the survey are combining mobile ERP access with analytics, BI and quality to get a 360-degree view of each plant floor so they can quickly move on new growth opportunities and alleviate slowdowns.


How Manufacturers Are Improving Product Quality

All manufacturers who participated in the survey are currently using several quality management techniques, with tracking scrap by type and cause the most popular. 64% of manufacturers are relying primarily on an analysis of scrap by type or cause as their primary quality management metric. 59% are analyzing Return Material Authorizations (RMAs) on a consistent basis, and 53% are relying on Non-Compliance/Corrective Action (NC/CA) to reach and stay at the quality levels they need.

Supplier Quality Management continues to gain momentum across the entire manufacturing industry, and many of the manufacturers interviewed are suppliers themselves. 42% of all manufacturers in the survey are monitoring inbound quality levels today. When the manufacturers growing at 10% or higher per year are analyzed, their adoption of supplier inbound quality management increases to 59%.

The 27% of manufacturers growing at 10% or more per year and more likely to be tracking yield rates by machine (38%), have an Engineering Change Order process in place and use it (37%), rely on Overall Equipment Effectiveness (OEE) (35%).

The following graphic compares all methods currently used by manufacturers to measure and manage product quality:


Manufacturers are growing revenues 10% or faster per year are more advanced in the areas of analytics, BI, and mobile ERP than their counterparts. Their adoption of OEE and advanced metrics for stabilizing and scaling plant floor operations surpasses the baseline of all manufacturers in the survey. High growth manufacturers can more quickly aggregate, analyze and take action on machine-level data from any plant floor at any time.

All manufacturers are starting to see the value of OEE as a metric for managing machine-level performance and health. High growth manufacturers can scale this metric across all plant floors and gain new insights into how they can improve overall production performance.

54% of all manufacturers say OEE is extremely and very important to their future production performance and 46% say the same about tracking OEE in real-time. Manufacturer’s ability to make the most use of OEE and then progress to real-time monitoring signals they are maturing in their use of analytics and Bi to gain greater competitive insight on how they can improve production performance. The fastest growing manufacturers are doing this by reflex today; analytics and BI use are a part of their DNA, and their operations reflect it.

81% of Manufacturers Say Real-Time Monitoring Is Improving Their Business

The majority of manufacturers today have adopted the basics of real-time monitoring, with many of them using light sticks, Programmable Logic Controllers (PLCs), material handling technologies including barcodes to monitor production. 80% of the manufacturers interviewed said that real-time monitoring is improving their business, with the companies growing 10% a year or more being early adopters of advanced real-time monitoring technologies including Radio Frequency Identification (RFID) tags and Internet of Things (IoT) sensors.

52% of all manufacturers are relying on real-time monitoring to improve scheduling accuracy. All manufacturers participating in the survey are gaining multiple benefits from real-time monitoring including attaining better levels of inventory control (48%), enabling improved production plan performance (40%) and gaining greater flexibility in managing production lines.

All manufacturers in the survey are focused on improving inventory management. 72% of all of them say that streamlining and making inventory reconciliation more efficient is the most important future benefit of real-time monitoring. 69% say real-time monitoring will enable greater accuracy tracking of their most important supply chain, production, service and aftermarket support metrics and key performance indicators (KPIs). 63% of all manufacturers are anticipating they will be able to better track machine utilization, scrap, and downtime reporting as a result of real-time reporting.


Real-time monitoring is delivering the greatest contribution to revenue growth today in the areas of improving scheduling accuracy (52%), enabling better levels of inventory control (48%), enables plants to improve production plan performance (40%), and improve order-to-fulfillment cycle times (37%) and improving track and traceability accuracy by having real-time data on production runs for each order (34%).


The fastest growing manufacturers interviewed are relying on real-time data from across their shop floors to gain greater insights than traditional real-time monitoring technologies provide. These areas include the following, which are among the most significant catalysts driving IoT adoption across manufacturing today:

• Setting the ambitious goal of optimizing machine, production line and plant performance to achieve lights-out manufacturing facilities. Using real-time data captured from IoT sensors across supply chains, inbound inspection, shop floor machinery and assets, logistics and fulfillment systems, manufacturers achieving 10% or higher growth are achieving the goal of optimizing every aspect of production performance. These are the lights out production plants that the manufacturing industry is increasingly writing about today. Industry 4.0, a key manufacturing initiative sponsored by the German government, also shares this goal of attaining the highest level of the machine, production line, and plant performance.

• Entirely new insights and action plans based on a richer level of time series analysis

based on machine data. High growth manufacturers have developed the skills to capitalize on offline and online condition analysis. They are using richer data sets generated from IoT sensors and advanced analytics, big data and machine learning applications that can produce a time-based analysis of machine cycles, cycle time performance.

• Using machine learning to analyze real-time data shows potential to find patterns in machinery and production data to alleviate delays and improve production efficiency. Pattern recognition based on machine-level data that can predict product quality problems, machine stability, reliability, and verify OEE levels. Manufacturers pursuing lights-out manufacturing operations are piloting machine learning today to accomplish this.

• Exponential increases in the accuracy, predictability and cost-saving advantages of using real-time data to reduce downtime. Predictive maintenance metrics to the machine level including condition monitoring, frequency analysis, kurtosis and greater accuracy to drive maintenance, repair, and overhaul (MRO).

Bottom Line: Real-time monitoring is now a core aspect of any growing manufacturing operation. 81% of all manufacturers surveyed say real-time monitoring is improving their business today. Manufacturers growing at 10% or more per year are the leading adopters of RFID and IoT technologies to gain further insights into how they can improve every aspect of manufacturing operations, with many setting the goal of lights-out manufacturing operations for their most common, easily automated products.

Documents

Where ERP Is Making The Greatest Contributions To Growth · 2018-08-08 · ERP platform to improve data quality. Comparing those manufacturers who have adopted Mobile ERP platforms