Michael Penchansky, V.P. of Global Business Development & Manufacturing Solutions, CGS, Inc.

Written by

Michael Penchansky
October 05, 2023

What’s Driving IT Investments in Manufacturing?

Whats driving IT investments

If Data is the New Oil, Insights are the New Money

After decades of cost reduction initiatives, apparel and fashion manufacturers recognize the truth behind the old saying, “You can’t cut your way to growth”. But in these times of economic uncertainty, there’s considerable chatter in production and sourcing meetings about holding off on strategic investments until better times come along. But is this reality or simply manufacturing leaders exercising their historically conservative nature?

IDC’s 2023 State of Manufacturing Technology Survey reveals that, despite significant economic concerns, three-quarters (75.2%) of the 500-plus participants will boost software spending this year. Notably, over one-third (37.8%) of the mostly small and midsized (SMB) manufacturers are planning double-digit increases. Perhaps not the answer one would expect from such a pragmatic audience.

Positive Expectations Drive IT Investments

When asked, “How do you expect inflation/interest rates/economic conditions to impact your organization over the next 12 months?” most respondents said they expect demand to increase and factories to expand versus close. Given current economic headwinds and uncertainty, the positivity of these executives and directors indicates that manufacturers are ramping up investments based on their positive outlook.   

The fact is that the appetite for combatting manufacturing challenges by deploying information technology has never been higher. This further supports the belief that positive expectations rather than dire warnings drive tech investments.

Why Digital Transformation Matters to Manufacturers

The survey responses also emphasize that economic uncertainty is top of mind across the manufacturing industry. The top fear is continued uncertainty across suppliers, transportation, and logistics. It’s clear that being prepared to adapt to unpredictable supply chain issues will remain essential to success.

The importance of addressing uncertainty is influencing fundamental Digital Transformation priorities, which include the following highly ranked short- and long-term goals in the survey.

  • Performance: improving throughput, efficiency & productivity
  • Sustainability: fostering sustainable operations and circularity
  • Agility: responding and recovering quickly from disruption
  • Growth: expanding new markets, segments, or geographies
  • Cybersecurity: strengthening detection & resilience

The Risks of Failing to Transform Digitally

While the survey provides a strong business case for Digital Transformation, it also reveals some barriers to success. The most cited challenges include lack of collaboration across the business (silos), limited access to the data needed to make better-informed and timely business decisions, the lack of the right talent and little knowledge of available technology solutions.

But the consequences of failing to transform digitally can be highly problematic, even crushing, for manufacturers. Survey participants ranked the following as the most significant risks companies take by failing to act.

  • Continued disconnection of data sources/silos
  • Limited ability to adopt new business models
  • Inability to effectively react to disruptions
  • Limited insight into customers and consumers
  • Lack of external collaboration (suppliers/customers)

Many executives and directors also cited the chaos from using multiple, disjointed (siloed) tech platforms as a significant problem for manufacturers that fail to go digital.

Data is the New Oil

Considering the challenges and opportunities surrounding Digital Transformation, the importance of faster, better, and more reliable data to manufacturers becomes crystal clear. But it is about much more than generating more data. The end game is to be able to leverage data to drive overall business strategy.

In 2006, British mathematician Clive Humby coined the phrase “Data is the new oil”. He suggested that, like oil, data is “valuable, but if unrefined, it cannot really be used. Just as oil must be changed into gas, plastic, chemicals, or other forms to create a valuable entity that drives profitable activity, data must be broken down and analyzed for it to have value.”

A 2022 Forbes article takes it further by saying, “Data as the New Oil is Not Enough”. “Without the ability to deliver data, in the appropriate context, it is just data”, and manufacturers have traditionally had more data than they know what to do with. So, “If data is the new oil, insights are the new money.”

Tech That Turns Data into Insights

Whether manufacturing is done domestically, nearshored, or far-flung, today’s apparel and fashion business demands easy access to real-time, cloud-based data and keen insights into production and sourcing operations. The goal is to turn data into actionable insights and enable automation across manufacturing processes.

New and innovative technologies combine the accessibility, scalability and computing power of the cloud that can maximize the value of Digital Transformation initiatives. IDC survey respondents (manufacturers) ranked the following five technologies they expect to make the greatest impact over the next five years.

  • Artificial intelligence/machine learning (AI/ML)
  • Data Analytics
  • Internet of Things (IoT)
  • Cloud applications
  • Mobility

While all these technologies ranked closely, IoT, analytics and AI/ML are already enabling manufacturers to collect, manage, analyze, and transform growing amounts of data into valuable insights. Perhaps the best example of how already-proven technologies fuel Digital Transformation initiatives is the latest cloud-based shop floor control (SFC) solution, BlueCherry SFC Essential. This comprehensive manufacturing and sourcing solution combines all the technologies identified above to empower manufacturers to:

  • Increase productivity and agility
  • Reduce throughput time and costs
  • Enable faster, better-informed decision-making
  • Improve product quality and customer collaboration
  • Increase visibility and supply chain transparency

As the world's most widely used fashion-focused shop floor control software, BlueCherry SFC manufacturing and supply chain solutions empower apparel and other manufacturers to improve factory floor efficiency with the latest industry 4.0 production management capabilities. Leveraging the latest cloud, wireless and analytics technologies, this powerful multilingual solution is easy to deploy, maintain and use.

Many of these manufacturers are also building the digital foundation for their Digital Transformation initiatives by leveraging BlueCherry’s entire suite of enterprise solutions and integrated best-of-breed solutions like Juki’s JaNets Pro machine monitoring and Inspectorio’s Tracking platforms. Such levels of native and custom integration become more critical when manufacturers go digital. With legacy systems common among apparel and fashion manufacturers, standardizing on a common platform is increasingly a priority for Digital Transformation initiatives.

If you find yourself still contemplating your own digital transformation initiatives or unsure of how to maximize the value of your investments, We invite you to register for our upcoming webinar: “How Innovative Manufacturers Thrive with Digital Manufacturing” .

You will hear from leading fashion and sewn products leaders who have successfully embraced digital manufacturing. They will share their experiences and insights on various aspects of their digital transformation journeys and how implementing BlueCherry SFC has helped safeguard their businesses and seize growth opportunities.

Michael Penchansky, V.P. of Global Business Development & Manufacturing Solutions, CGS, Inc.

Written by

Michael Penchansky

Shop Floor Control