Proving the Business Case for the Internet of Things

Top ten 2015 supply chain and manufacturing predictions from Software AG

Steve Rogerson
February 5, 2015
German company Software AG has released its top ten predictions for the next year in the manufacturing and supply chain industry, calling 2015 the tipping point for supply chain sentience. Next year, it believes, innovative manufacturers will leap ahead by deploying more and better sensors, add more comprehensive automation and increasingly choose local fabrication.
"In 2015, we will see manufacturers and their partners accelerate the implementation of initiatives that will deliver on the promise of the internet of things,” said Sean Riley, the company’s global manufacturing and supply chain director. “For some companies, this will be a challenge, but for many others it will be a year of great opportunity leading to significant competitive advantage."
The top ten predictions are:

  1. The internet of things (IoT) will enable extreme industrial innovation: Embedded sensors continuously streaming data combined with continuous analysis will provide undiscovered levels of supply chain visibility, production support and customer experience optimisation, as innovative manufacturers embrace the possibilities enabled by IoT.
  2. Increased adoption of automation will help manufacturers create new revenue streams and lower costs: Increased servicing will be required of specialised, automated equipment. Manufacturers of specialised equipment will be uniquely positioned to create new revenue streams by providing maintenance services on a predictive basis with the use of sensors.
  3. Real-time demand fulfilment will require tight integration of supply chain, production, logistics and marketing: The ability to sense demand in real time and respond by changing prices or promotions through the use of segmented logistics, inventory and performance capacities will allow for the optimisation of integrated responses.
  4. Re-shoring will continue but supply chains will remain global, large and complex: Re-shoring will remain a focus as manufacturers search for efficiencies and innovation, but supply chains will still be complicated, requiring increased visibility provided by the industrial IoT.
  5. Emerging markets will innovate and improve to compete with the re-shoring trend: While labour and production in emerging markets manufacturing has traditionally been appealing, improvements in innovation and product quality will keep production facilities running and entice new facilities to open, which will compete with re-shoring.
  6. The project economy will thrive because of more exacting customer requirements: Faster times to market with more specific products and shorter lifecycles will result in short-term shifting and outsourcing of logistics facilities, production and suppliers. Manufacturers will have to on-board suppliers and partners quickly to support rapid product development and match the capabilities and products desired by customers.
  7. 3D printing will become central to manufacturing strategy: Additive manufacturing will provide additional flexibility for service parts or unique products with short life cycles. These capabilities will flourish and will be adopted as a central part of a manufacturing strategy.
  8. Supply chain and operational resiliency will drive certainty in the face of risk: Manufacturers will continue to focus on maintaining cost and service certainty, even in the face of adverse events and risks. Scenario and response planning will require processes spanning multiple departments with the ability to understand forecasted outcomes, and manage real-time deviations from planned outcomes.
  9. Top supply chain and operations talent will continue to be highly sought after and in short supply: Manufacturers that embrace the digital enterprise concept will differentiate themselves and attract the best, most sought after talent.
  10. Government funding will spur collaboration and standards creation, even among competitors: With the rise of the IoT and the ability to make massive amounts of data actionable through streaming analytics and dynamic, structured collaboration, governments will continue to increase funding for groups to create a new manufacturing revolution.
"The ability to drive further cost savings and reduce time to market depends on the manufacturer’s ability to trust in continuous, automated monitoring of all systems," said Riley. "The organisations that successfully adopt and scale will bring new technologies mainstream faster than people realise."