Blog · 13 May 2021

IT / OT integration - the foundation for turning the factory black box into a crystal box?

Turning the factory into a crystal box has become a new paradigm.

Stefanie Naujoks
Research Director, IDC Manufacturing Insights Europe

The pandemic has shown that not only are interrupted global supply chains causing severe problems for our economy and for many manufacturers, but that factory operations themselves can become a bottleneck in fulfilment.

So, the factory itself has suddenly become an area of attention. Many manufacturing organisations have realised that to ensure resilience and flexibility of operations, not only do supply chains need to be resilient, but also factories need to become more transparent. Turning the factory from being a black box into a crystal box has become a new paradigm.

How can the transparency of factory operations be increased?

Closer integration of the Operational Technology (OT) domain with the Information Technology (IT) domain, from our perspective, is a first step. This can be the foundation of increasing transparency of factory operations and turning them into a crystal box. Why?

First, to achieve transparency, operational equipment needs to be instrumented, meaning it has programmable logic controllers, distributed control systems, sensors, meters, etc. Then, retrieving data from this operational equipment and turning it into insights requires the IT know-how and capabilities, as well as a combination of data from other sources, such as enterprise applications like enterprise resource planning, manufacturing execution systems  or product life-cycle management applications. Only a combination of OT and IT domains will help to turn data that is retrieved from the operational equipment into insights, thereby increasing transparency.

Why are manufacturing organisations investing in IT / OT integration?

Transparency is a prerequisite of any process optimisations. IT / OT integration helps to increase transparency, but manufacturers are not investing in it to increase transparency - rather they’re investing in IT / OT integration to increase efficiency of operations to enable data-driven optimisation of shop-floor operations.

Results from a recent IDC survey show that for 39% of manufacturing organisations worldwide, improving operational performance and increasing throughput is the number one motivation to invest in IT / OT integration. This is followed by improving agility and flexibility in adjusting production according to demand (26%) or achieving improved reliability and availability of assets (21%).

Moreover, the results from a recent IDC survey show that IT / OT integration is in fact delivering measurable results. For example, the average increase in throughput or productivity because of IT / OT integration is 8% and the average decrease in unscheduled asset downtime is 13%.

So, yes, IT / OT integration enables data-driven optimisations of factory operations. And, to achieve this, the prerequisite is transparency. Without that the factory would remain a black box, with no insight into how to optimise operations, avoid bottlenecks, and ensure resilience and flexibility.

For more information, see the IDC InfoBrief Unboxing the Black Box - Turning Factory Operations Into a Crystal Box.