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Outdated tech is holding manufacturers back from Industry 5.0

Feb. 1, 2023
Aversion to risk will require rethinking business strategies.

By Tim Jones, managing director of application modernization for Advanced

A recent survey found more than 70% of manufacturers are looking to embrace Industry 4.0 and beyond, due to optimizations, increase in quality and enhancements in flexibility it provides. However, the survey also noted only 29% of respondents are capturing value from such solutions at scale, revealing a backwards approach to adopting the technologies that are needed to truly take on the next Industrial Revolution. 

This is a critical year for the manufacturing industry to tackle transformation, as leveraging emerging technologies on the factory floor will be required to stay competitive in today’s landscape. As manufacturers look to Industry 4.0, the following macro- and microeconomic developments are critical for manufacturing leaders to understand in order to maximize efficiency as they strive toward digitalization excellence. 

Economic headwinds will affect spend, making executive alignment key   

In any economic downturn, organizations across all industries are forced to cut costs, but there are also many interpretations on what this means, and with that there needs to be an executive-wide understanding of what makes the most sense, given the market and what initiatives will provide the most ROI. From a manufacturing standpoint, IT budgets typically are at the top of these lists, and it may be attractive for leadership to downgrade modernization initiatives to "do-it-yourself" projects to save money and efforts.    

As a result, we may witness a resurgence of companies getting themselves into hot water by attempting to bootstrap their own application-modernization initiatives—from the mainframe to the edge and cloud—to cut costs, driven by the incorrect assumption that systems are much simpler than they really are. IT leaders at manufacturing organizations need to establish alignment with overall leadership on their digital-transformation practices and define the purpose of these efforts in the first place. 

Cloud providers’ services will continue to evolve, driving innovation and enabling interoperability 

The cloud has already brought tremendous growth, change and opportunities to the manufacturing industry, and in 2023 it will only continue. By providing manufacturers with access to powerful computational resources and data-storage capabilities, service providers have helped manufacturers optimize production processes, improve efficiency, and reduce overall costs.  

The cloud also enables remote collaboration, communication and access to manufacturing data, which enables manufacturers to work with partners, suppliers and customers more effectively. As a result of the need for accessible data and real-time decision-making, it’s also likely that we’ll see an increase in the productization of multi-cloud offerings from infrastructure and service providers intent on streamlining the use of their cloud databases and associated technologies. This will simplify the use of multi-layer multi-cloud environments and sophisticated deployments—and cut the silos and improve interoperability across various Industrial Internet of Things (IIoT) devices, data and people. This makes it much simpler to use these platforms across every cloud—and it’s something manufacturers should keep in mind.  

Aversion to risk, security and data-policy compliance will require rethinking business strategies 

According to the third-annual Mainframe Modernization Business Barometer Report, 41% of IT leaders ranked risk and security as the key element when prioritizing mainframe modernization strategies—for the first time ever. A major cause for risk-specific unease is the downstream impact of mainframe reliance, including the risk, accessibility and applicability of data, regulatory compliance, and infrastructure management due to a shrinking talent pool. 

This is particularly noteworthy and will continue to be a key driver for IT leaders at manufacturing organizations in 2023. Specifically, outdated infrastructure—like the mainframe—is not easily adapted to new or changing requirements, making it difficult for manufacturers to quickly respond to new market conditions, data requirements and customer needs.  

To meet compliance requirements, organizations must migrate from outdated technologies sitting on the mainframe to modern equivalents that can be sufficiently resourced and better support today’s evolving requirements. 

Accessible data for real-time decision making 

As manufacturers aggressively adopt tech like AI/ML to improve decision-making and optimize operations to drive innovation, having on-demand data through the edge is key. While big data can contain a treasure trove of data insights, it’s often trapped in legacy databases that don’t integrate well with demanding business intelligence and analytics solutions. This limits the opportunity for omniscience and the common accessibility of data, comprehensive visibility, and airtight integrations that enable companies to respond to business needs and changes in real-time.  

Manufacturers hoping to drive the horizontal scalability required for every modern technology must integrate newer software and applications, and ultimately improve productivity and results across the organization. IT executives and leaders in the manufacturing industry must address their outdated infrastructures and introduce more agile methodologies to realize their true potential in the years to come.