In this issue: Predictions for 2013: Sustainability within Manufacturing

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1 Issue 60 December 13, 2012 In this issue: Predictions for 2013: Sustainability within Manufacturing Kimberly Knickle IDC Manufacturing Insights

2 Predictions for 2013: Sustainability within Manufacturing KIMBERLY KNICKLE IDC MANUFACTURING INSIGHTS Overview At IDC Manufacturing Insights, we pinpointed a number of trends that we expect to see in 2013, trends that will impact manufacturing business and information technology decisions and that will have long-range impacts on manufacturing. Sustainability, while not specifically called out in the trends we pinpointed, is still an important piece of where we see manufacturers heading. The Next Wave of Productivity One trend we expect in 2013 is that of the next wave of business productivity. Back before the recession, when we surveyed companies on their business priorities, their top answers always seemed to be around increasing revenue. Everyone thought they were in a market that was growing, and wanted to grab market share. But over time, we ve seen a change. Now, companies know that they also need to be more productive. Across organizations, we have seen that the focus on increasing productivity will include process productivity, ecosystems productivity, individual productivity and management productivity. Sustainability is likely to come into play in all of those areas, as manufacturers attempt to streamline processes and remove inefficiencies. 2

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4 Business investment in enterprise resource planning (ERP) applications drove business process reengineering projects that resulted in increased productivity, and manufacturers gained significant improvements in their operations. This investment was so successful in fact,that most major companies now have significant investments in ERP. But they re finding they need to become still more efficient. For this new wave, we see that they will be making this happen through investments in four new technology areas: the cloud, big data analytics, social business, and mobility. Following are some examples of what these areas might look like in terms of sustainability. The Cloud Some vendors today host their Environment, Health and Safety applications in the cloud, and we think this makes it easier for companies to adopt these newer applications and newer functionality within those applications. For example, if a company was using a tool to calculate its environmental footprint in the cloud, it would be easier to upgrade and add new functionality because the vendor would be managing that aspect of it for them. By using the cloud, manufacturers may find it easier to manage and track their sustainability performance. They may also begin to allow their suppliers to use the same applications to improve their own sustainability. Big Data One of the challenges these companies have is trying to improve the environmental footprints of their products. If a company wants to base a product change on knowing how the product performs in a customer s hands, they can use sensors to collect an enormous amount of new information that can guide how they can tweak a product and enhance performance around things like energy consumption, for example. Think about our vehicles: we have sensors in our cars gathering data about its performance. We could use the information gathered from those sensors, combine it with other information we have, and anlyze that information in aggregate. If we knew what kind of behavior on the road consumed the most gas, and how many of those situations occurred, maybe we could use big data tools to provide us with the analysis that allowed us to go back to the drawing board and redesign that 4

5 car and make a product change to make the energy efficiency of the vehicle better without sacrificing other performance measurements. Big data is one area manufacturers are using to improve the efficiency and sustainability of products. Social Business If we think about the fact that social software uses Facebook, LinkedIn, and Twitter-like functionality to help people share information and collaborate, we can see all kinds of ways that social can be part of the sustainability process. Constant collaboration goes on within a business, and these tools could provide a means of collecting ideas on how to make products and processes more green. A social platform could essentially empower the grassroots efforts and ideas that employees have and help make those ideas visible to a greater range of people, maybe in other roles or departments. Mobility Mobility via devices like smartphones and tablets allows people to take sustainability guidelines with them into their work environment. Imagine if there were tablets or mini-tablets that someone who oversees a production line could use to check the performance of different pieces of equipment. He or she might use the tablet to identify when a piece of equipment was drawing more energy than it should and then could follow through by determining what needed to be done to service the machine and bring it back into a pre-determined performance threshold. Sustainability Is Here to Stay These are just a few examples of how companies are and will be using these new technologies to improve productivity and to meet their sustainability goals. Sustainability has been an ongoing trend for several years, and, while we re not seeing any huge and sudden surge of importance, it s definitely not going away. Our expectation is that using new technology will make it even easier for sustainability to be part of the work process. 5

6 About IDC Manufacturing Insights IDC Manufacturing Insights is based in Framingham, MA and operates throughout the world utilizing IDC's network of global facilities. Its focus is to provide strategic business technology and application advice for the manufacturing industry. IDC is the foremost global market intelligence and advisory firm with more than 1,000 analysts in 110+ countries. IDC forecasts worldwide markets and trends to deliver dependable service and client advice. IDC is a subsidiary of IDG, the world's leading IT media, research, and exposition company. Author Profile: Kimberly Knickle As a practice director, Kimberly Knickle is responsible for research and analysis of business and IT issues related to the asset-oriented value chain (AOVC), which includes manufacturers in chemicals, pulp & paper, metals, and downstream oil & gas. In addition, she manages the Emerging Agenda practice area, which focuses on hot topics that are rapidly becoming critical priorities for manufacturers such as environmental sustainability; big data, cloud. mobility, and social business. Ms. Knickle also supports research in the supply chain and the consumer packaged goods industry. Contact Information IDC Manufacturing Insights Tel: Speen Street Framingham, MA URL: LinkedIn: Analyst LinkedIn: KKnickle@manufacturing-insights.com 6