50 Years of Growth, Innovation and Leadership

Driving Smart Business Collaboration in Manufacturing:
A Next-generation Be...
Frost & Sullivan

Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc.

Frost & Sullivan

In the process of this research, Frost & Sullivan identified key companies accelerating the
journey towa...
Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc.

Frost & Sullivan

Chart 1.1: Manufacturing Value Added to GDP, 2008-2013
Apple will invest $100 million to bring Mac
Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc.

Chart 1.2: ...
Frost & Sullivan

Chart 1.3: U.S. Trade Balance for High-Tech and All Manufactured
Products, 1990-2015

Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc.

Chart 1.4: ...
Frost & Sullivan

Chart 1.5:Vision of the Future of Manufacturing and Production (Visi-MAP 2.0):
Convergence of Four Marke...
Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc.

Smart: Smar...
Frost & Sullivan

Technology and Graying Workforce:
The perennial issue of an aging workforce and the potential entry of d...
Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc.

Frost & Sullivan

on the long, single-model production runs supported by inflexible manufacturing processes
and facilities...
Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc.

topology of...
Frost & Sullivan

cloud, Cisco’s strategy uniquely positions it to deliver a lifecycle approach for its customers.
The uni...
Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc.

Energy Mana...
Silicon Valley
331 E. Evelyn Ave. Suite 100
Mountain View, CA 94041
Tel 650.475.4500
Fax 650.475.1570

San Antonio
7550 We...
Upcoming SlideShare
Loading in...5

Cisco Systems 2013 Best Practices Position Paper


Published on

Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems.

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Cisco Systems 2013 Best Practices Position Paper

  1. 1. 50 Years of Growth, Innovation and Leadership Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc. A Frost & Sullivan White Paper www.frost.com
  2. 2. Frost & Sullivan Objective.................................................................................................................................. 3 Scope and Definitions............................................................................................................. 3 Introduction............................................................................................................................. 5 The 4 Mega Forces Driving Convergence and U.S. Manufacturing Renaissance.............. 9 Impact of Convergence.......................................................................................................... 11 The 8 Manufacturing Convergence Trends........................................................................... 13 Collaborative Manufacturing................................................................................................. 13 Smart Business Collaboration............................................................................................... 14 Cisco’s Enabling Technology and Solutions........................................................................... 14 Case Studies............................................................................................................................ 17 Conclusion............................................................................................................................... 17 CONTENTS
  3. 3. Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc. OBJECTIVE The convergence of global Mega Forces provides a framework to evaluate emerging manufacturing Mega Trends. Based on Frost & Sullivan’s Vision of the Future of Manufacturing and Production 2.0 (Visi-MAP 2.0) research, recognizing these Mega Trends allows manufacturers to innovate, design, and drive next-generation manufacturing best practices. Leveraging this cutting-edge research, The Top 50 Game-Changers in Manufacturing & Production 2013 analysis identifies companies that are driving next-generation manufacturing best practices. The factors that were objective inputs to the evaluation process include: • High impact on U.S. manufacturing competitiveness • Current and future market growth potential • Growth vision • Ability to deliver toward critical future state requirements This white paper is part of the Top 50 Game-Changers in manufacturing and production research and focuses on the Top 30 Game-Changers in Manufacturing Software. Frost & Sullivan’s vision is to help contribute catalytically to the visionary innovation process rather than presenting just a ringside view of industry developments. As part of this process, we have identified the companies we see as catalyzing the future state requirements of manufacturing and production—now! SCOPE AND DEFINITIONS The Visi-MAP 2.0 research platform—which provides a unique vantage point to observe best practices across the manufacturing ecosystem—has brought forward Frost & Sullivan’s Top 50 game-changers. This initiative is built on 600 interviews and discussions with thought leaders from around the globe. The participants were highly diverse and included: • Executives from major global end-user verticals (automotive, aerospace and defense, chemicals, consumer packaged goods (CPG), food and beverages, mining, oil and gas, petrochemicals, pharmaceuticals, power, pulp and paper, and water/wastewater) • Executives across a variety of management levels with a bias toward C- and VP-levels • Executives from across the manufacturing value chain, including manufacturers, distributors, system integrators, supply chain partners, and solution providers These discussions coalesced around the broad themes of future vision (technology, industry future, challenge themes and approaches), factory of the future, and convergence issues that would be most influential in changing the manufacturing and process landscape. This intelligence has been distilled into a framework of manufacturing Mega Trends that will help process and discrete manufacturers understand the current and future challenges. Frost.com 3
  4. 4. Frost & Sullivan In the process of this research, Frost & Sullivan identified key companies accelerating the journey toward the vision of the future. To bring objectivity and rigor to the synthesis of the Top 50 Game-Changers, we deployed a Decision Support Matrix (DSM) model. The DSM compares companies’ performance relative to each other by integrating quantitative and qualitative metrics, including impact on productivity and effects on competitiveness. The DSM allowed our research team to objectively analyze each company’s performance on key criterion relative to its top competitors. The analysis does not imply any endorsement or strategic advisory, and Frost & Sullivan is absolved of any legal claims whatsoever. In this white paper, Frost & Sullivan has scrutinized more than 100 companies, products, technologies, solutions and services in the manufacturing software category with a focus on which of them would have the greatest impact on U.S. manufacturing competitiveness, productivity, and future growth. The objective is to demystify the best practices of companies in the field and use Frost & Sullivan’s reach to promote their adoption. This white paper introduces the reader to the following concepts: • Manufacturing Mega Forces – Mega Forces are overarching trends prevalent across all industries and geographies that are driving convergence. • Manufacturing Mega Trends – Distilled from the Mega Forces, these are sub-trends that will affect the manufacturing and process landscape in specific ways (addressed in the research). • Holy Grail – A highly sought-after end goal. To attain the Holy Grail, there are several critical future state requirements that need to be fulfilled. At present, the market is yet to achieve this desired vision of the Holy Grail. • Critical Future State Requirement – The path to achieve the Holy Grail is through stepping stones of critical future state requirements. Companies that have products, technologies, solutions or services that help drive and deliver future state requirements are featured as “Game-Changers.” 4 Frost.com
  5. 5. Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc. INTRODUCTION U.S. Manufacturing’s Fractured Fairy Tale: The seismic shifts in the global manufacturing industry over the past decade have created a new order, driving manufacturing offshoring, re-defining supply chains and decimating manufacturing jobs. Developing countries in Asia leapt to prominence, flooding the market with inexpensive imports and creating jobs. Until the early 2000s, the United States was an undisputed economic superpower, largely due to its manufacturing prowess. By any metric, manufacturing is the bulwark of the country’s economy, representing 68 percent of all R&D, 12 percent of the gross domestic product (GDP), generating more than $1.7 trillion in economic activity every year, and accounting for more than 80 percent of all exports. Manufacturing also powers the U.S. service economy by developing and implementing technologies that keep it competitive in the global market. The sector generated millions of jobs in a range of direct support services and millions more in indirect services in other local industries. However, the global economy’s tumultuous ride from 2001 to 2008 challenged the United States’ manufacturing sector like never before. While still a formidable global player, the U.S. is no longer the leader it once was. According to the United Nations Statistics Division (UNSD), four of the country’s top competitors had a higher manufacturing value added per capita in 2012 (see Chart 1.1). The dilution of the United States’ dominance in global manufacturing can be attributed to multiple reasons. Employment rates in the sector took a tumble and although the output rose marginally, the lack of available trained resources affected per-capita output. The four fundamental shifts that are driving renewed interest in U.S. manufacturing renaissance are: 1. Rising wages in developing economies 2. Shale gas and oil availability and its impact on energy-intensive industries 3. Technology innovation and focus 4. Productivity and automation gains negating arbitrage advantages Frost.com 5
  6. 6. Frost & Sullivan Chart 1.1: Manufacturing Value Added to GDP, 2008-2013 Apple will invest $100 million to bring Mac production back to the US next year, says Tim Cook Obama Name-Checks 3-D Printing, Calls For 15 “Innovation Hubs” Russia, 2.5% 0.28 2.55 AFTER OPENING A HUB DEVOTED TO 3-D PRINTING LAST YEAR, THE PRESIDENT ASKED CONGRESS TO CHANNEL MORE FUNDING TOWARD TECH Europe, 0.8% 0.24 2.45 2.00 U.S., 4.3% 2.64 1.62 1.47 India, 8.1% China 12.4% 0.26 0.17 0.27 Malaysia, 10.8% 0.23 Brazil, 3.2% 0.03 0.02 Chile, 7.3% 0.08 0.05 0.23 Indonesia, 7.9% 0.14 Malaysia-Moving Foward Up the Global Value Chain Sound economic policies and a focus on high-value activities puts Malaysia in an advantageous position for future growth. 2013 2008 Note:Values for 2013 are estimated Source: GET-IT, Bloomberg, Business Today, Frost & Sullivan analysis The primary reason behind the potential resurgence of manufacturing in the U.S. is the cost of energy, especially gas production. As shown in Chart 1.2, the U.S. became a net energy exporter around 2010 and will continue to be one due to the shale oil and gas revolution. The U.S. downstream oil and gas market has seen an investment of nearly $15 billion to increase ethylene production capacity by 33 percent. Traditionally, regions such as the Middle East and China held the top honors. Availability of natural gas as feedtock is strongly positioning the U.S. to become the world’s largest petrochemical hub by 2020.The country’s production of natural gas and crude oil is at a 20-year high, and this has sent out a flare for companies looking to relocate back to the U.S., especially energy-intensive industries such as metal, metal refining, chemicals and petrochemicals. The shale oil and gas revolution is expected to drive other industries such as chemicals to their own “renaissance,” supported by comparatively cheap feedstock and low-cost energy. Unlike Europe and Japan, where natural gas prices have been on a sharp ascendency since 2008, prices are at a 12-year low in the United States. Further, shale gas production is projected to increase from 8.13 trillion cubic feet in 2012 to 16.70 trillion cubic feet in 2040, accounting for a little more than half of the total gas production. This net cost advantage and abundance of energy sources are increasingly diverting manufacturing traffic from Asia and Europe back to the United States, promising resurgence in manufacturing that could propel the U.S. back to the manufacturing spotlight. 6 Frost.com
  7. 7. Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc. Chart 1.2: U.S. Hydrocarbon Asset Trends, 2000-2012 10 30 Crude Oil Production (Billion Barrels/Day) 9 Natural Gas Production (Trillion Cubic Feet) 25 Natural Gas Prices ($/mmbtu) 8 7 20 6 5 15 4 10 3 2 5 1 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 0 1980 0 Sources: EIA, U.S. Refining estimates On another front, the emergence of a new consumer class in emerging markets—and a new breed of emerging innovators—has weakened the United States’ hold on the high-technology global export market. Contrary to general belief, labor costs are not the main reason for this decline. In fact, the United States is losing out in high-technology manufacturing to both low-wage nations such as China and India, as well as high-wage nations such as Germany and Japan. Global product launches and empowered consuming class have driven a new surge for hi-tech, and manufacturing is no longer simply restricted to goods production. Consumers are demanding a big bang for their buck, catapulting value additions, innovations and services to the top of the manufacturing industry’s priority lists. Chart 1.3 presents the trade balance in high-technology goods trajectory for the United States from 1990 to 2015. It stands to reason that stagnation would ring the death knell in a market as dynamic and diverse as manufacturing. This receding form of the United States in global markets, as seen in the chart for both high-technology and manufactured products, underlines the alarming loss of invaluable manufacturing expertise, and eventually, quality of life. To arrest the slide, manufacturers across the board are looking to drive productivity and gains through innovations in materials, processes, faster time to market, and the factories of the future. Frost.com 7
  8. 8. Frost & Sullivan Chart 1.3: U.S. Trade Balance for High-Tech and All Manufactured Products, 1990-2015 100 0 -100 $Billions -200 -300 -400 -500 -600 -700 -800 1990 1995 2000 2005 2010 2015 Year Advanced Technology Products All Manufactured Products Source: UNCTAD While the story on trade balance is somewhat depressing, there is a new chapter in progress— the industry is staging a recovery of sorts. The increase of 0.24 percent over 2010-2011 is almost imperceptible, but it is the longest period of sustained growth since 2001. R&D and production might of the emerging nations is forcing manufacturers in the United States and other developed economies to increasingly collaborate and innovate on a global basis. As the business landscape has become inclusive like never before, manufacturers are abandoning old strategies for more nuanced ones to deal with interwoven challenges relating to regulatory procedures, environmental issues, and currency fluctuations. One of the key issues that will receive an inordinate focus is productivity. While the challenge of decline in skilled workforce is perennial, end users are focusing on improving labor productivity through implementation of automation, technology-focused solutions, training, simulation, information technology integration, digital manufacturing, smart integrated operations and various other best practices. As shown in Chart 1.4, labor productivity is clearly increasing with a reduction in labor costs. This situation is very favorable to the U.S. manufacturing industry as it competes with other major low-cost production regions of the world. Labor Population vs. Labor Productivity As labor costs increase in emerging markets, the adoption of next-generation technologies is having a positive effect on labor productivity in the U.S. market. Shown below in Chart 1.4 is the trend of unit labor cost declining with progressive increase in labor productivity. Part of the progressive increase could be attributed to advanced manufacturing and automation across vertical industries. As industries re-shore back to the U.S., there will be a big push for automation-related technologies and modernization of existing facilities. 8 Frost.com
  9. 9. Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc. Chart 1.4: Trends in Labor Productivity (U.S.), 2000-2012 180 350 160 300 140 250 120 100 200 80 150 60 100 40 Labor Force Population 12 11 20 10 20 09 20 08 20 07 Labor Productivity 20 06 20 05 20 04 20 03 20 02 20 01 20 00 20 99 20 98 19 97 19 96 19 95 19 94 19 19 19 19 19 19 93 0 92 0 91 50 90 20 Unit Labor Cost Source: Bureau of Economic Analysis But, as with most changing landscapes, there is not an end but a continued evolution as industries and companies adapt, innovate, and thrive in new paradigms. Exploring the journey to these new paradigms has led Frost & Sullivan to identify four Mega Forces that are converging to create manufacturing Mega Trends that will provide opportunities to take U.S. manufacturing competitiveness to the next level. In this process, some companies have risen to the top based not only on vision, but the excellent execution of that vision. In the sections below, we elaborate on the Mega Forces framework and the game-changing companies that are catalyzing the future state. THE FOUR MEGA FORCES DRIVING CONVERGENCE AND THE RESURGENCE OF U.S. MANUFACTURING Frost & Sullivan has developed a Vision of the Future of Manufacturing (Visi-MAP 2.0) based on in-depth analysis of the global industrial automation marketplace and numerous customer interviews. The Visi-MAP 2.0 distills a multitude of forces into four market Mega Forces: Globalization, Technology, Aging Workforce and Smart (see Chart 1.5). Interactions between these major market forces have led to the occurrence of eight key “Manufacturing Convergence Trends” that are promoting the development of 13 key end-state attainment goals, which we call “Holy Grails,” that are leading to a revival of U.S. manufacturing. Frost.com 9
  10. 10. Frost & Sullivan Chart 1.5:Vision of the Future of Manufacturing and Production (Visi-MAP 2.0): Convergence of Four Market Forces 15.3%: Uptick in manufacturing as a % of GDP in U.S. GLOBALIZATION $110bn: Investments focused on driving sustainability over the past 10 years SMART TECHNOLOGY 32.0%: Largest share of global R&D expenditures from the U.S. GRAYING WORKFORCE 1.5x: Increase in labor productivity over the past 10 years Source: Frost & Sullivan,Visi-Map 2.0 Report The four Mega Forces are described as follows: Globalization: Globalization across manufacturing verticals has thrown up a variety of challenges, including low-cost competitors and evolving customer demands from emerging, developing and developed economies for high-quality, feature-rich products in a wide variety of models. This is forcing U.S. manufacturers to look beyond their traditional comfort zones and take calculated risks. A best-use case for a global manufacturing network is Boeing’s 747, which uses 80 different suppliers across the world to co-create the final product in Everett, Washington. Technology: The need to be globally competitive is driving U.S. manufacturers to implement new and disruptive technologies and business solutions. The U.S. continues to be the largest R&D spender. There has been a large push in the U.S. market to drive open innovation platforms. As immigration policies undergo potential changes, the U.S. could become the cornerstone of next-generation innovation focused on industrial markets. Aging Workforce: The retirement of aging workforces and the potential loss of both their collective knowledge and mentoring capabilities is a leading cause of concern. The industry’s minor recovery could reverse the job outflow from the country, even though the chances of that happening may appear bleak at the outset. Manufacturing employment declined from 17.26 million jobs in 2000 to 11.6 million jobs in 2011, and 42,000 factories shut down during this period. Over the past 20 years, the percentage of skilled workforce dipped from 16 percent in 1992 to 11.4 percent in 2012, even though the labor pool increased from 13.97 billion to 160.66 billion in the same period. Left to “normal” trends, this increase in manufacturing activity and jobs might continue to limp along for the foreseeable future. However, it could also be argued that even in emerging economies, the talented networking pool has been a challenge despite favorable demographics. Corporations in BRICS (Brazil, Russia, India, and China) countries are increasingly looking at partnerships with universities to train talent for both manufacturing and management positions. 10 Frost.com
  11. 11. Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc. Smart: Smart is defined as any improvements that drive waste out of existing business processes. The infusion of “smart” into existing processes and systems results in improvement of productivity, savings and profitability. It will ultimately help develop on-demand manufacturing systems and processes that respond, in real time, to rapidly evolving changes in market demand. Frost & Sullivan has used Visi-MAP 2.0 to analyze the interactions between these four Mega Forces and identifies eight key Manufacturing Convergence Trends, as shown in Chart 1.6. Chart 1.6: Key Manufacturing Convergence Trends RISK MANAGEMENT Safety, cyber security, enterprise compliance management COLLABORATIVE MANUFACTURING Digital manufacturing, adaptive manufacturing, supply chain collaboration GLOBALIZATION SERVICE DELIVERY INNOVATION Remote asset management, lifecycle service E-CONVERGENCE Virtualization, cloud computing, business and manufacturing intelligence SMART TECHNOLOGY FRUGAL ENGINEERING AND MANUFACTURING De-contenting, personalized mass customization EXPERT SYSTEMS Role-tailored software, intuitive interfaces, alarm management, process optimization GRAYING WORKFORCE KNOWLEDGE MANAGEMENT SYSTEMS Collaboration wikis, intuitive self-learning organization CONTROL ON THE GO Workforce mobility, smart devices and remote monitoring Source: Frost & Sullivan,Visi-MAP 2.0 Report IMPACT OF CONVERGENCE Globalization and Technology: Borderless integration of trade, resources and information across regions has enabled companies to be exceedingly competitive in business. The rise in business complexity due to crossintegration of global operations and value networks is directly proportional to the propensity of risk and security. Some of the solutions that can be implemented to manage these critical issues arise from manufacturing convergence trend #1—Manufacturing Operations Risk Management. Smart and Technology: The combination of new technologies and smart investments being applied to manufacturing operations is creating a radical shift away from current manufacturing and production methods. Several key technology disruptors that have shifted and shaped the manufacturing landscape in the past five years have been centered on machine language and Internet infrastructure. The need to comprehensively harness technology to manage the complex world of data and applications has led to the emergence of manufacturing convergence trend #2—E-convergence. Frost.com 11
  12. 12. Frost & Sullivan Technology and Graying Workforce: The perennial issue of an aging workforce and the potential entry of digital natives across U.S. manufacturers has opened an interesting paradigm. Operations costs, including direct and indirect labor costs, productivity losses, down time or re-training the workforce must be managed effectively if U.S. manufacturers are to be competitive in the global marketplace. The classic situation of device complexity/workforce gap requires the intervention of solutions that are a subset of manufacturing convergence trend #3—Expert Systems. Smart,Technology and Graying Workforce: Beyond bridging the ever-expanding device complexity/workforce gap, an added dimension of posterity is the influence of new location-based and mobile computing models that allow operational personnel to have 24x7 anytime, anywhere access and control over enterprise information. There has been significant benefits in leveraging operator mobility, which directly relates to manufacturing convergence trend #4—Control on the Go. Smart and Graying Workforce: Border-lining on the pre-discussed issues, a key challenge to stem knowledge attrition was the need for solutions to better manage the application experience of the retiring workforce. The future would require systems that are intrinsically intuitive and that have been built on the knowledge of these retiring workforces. The convergence of these two forces has resulted in manufacturing convergence trend #5—Knowledge Management System. Smart and Globalization: Wafer-thin margins in the manufacturing industry continue, despite the use of advanced technologies and automation. However, a starkly different business model emerged when end users started demanding plain vanilla-styled products and services with no excess features attached. Most of the emerging markets preferred these types of solutions over commercialof-the-shelf offerings. The ability to deliver “must-have” solutions led to the emergence of manufacturing convergence trend #6—Frugal Engineering. Smart, Globalization and Technology: This Mega Force triad shows the consequences of convergence between a flat world with superefficient business processes and use of next-generation technologies. Accelerated business at optimal costs and user-centered processes are some of the core needs of the future. These require a vastly seamless collaborative business model that exceeds end-user expectations through innovative service models. This Mega Force triad has enabled two manufacturing convergence trends: 1. Manufacturing convergence trend #7—Service Delivery Innovation 2. Manufacturing convergence trend #8—Collaborative Manufacturing 12 Frost.com
  13. 13. Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc. THE EIGHT MANUFACTURING CONVERGENCE TRENDS The eight Manufacturing Convergence Trends mentioned above can be distilled further to identify 13 key enabling technologies, or “Holy Grails,” and 30 “Critical Future State Requirements.” Using Frost & Sullivan’s proven best-practice analysis process, this white paper will discuss game-changing companies operating within each of those critical future state requirements. The complete framework with critical future state requirements and Holy Grails is represented in the chart below. The Mega Forces converge to enable the manufacturing convergence trend, which vectors out into several critical future state requirements. These future state requirements are the stepping stones to meet the desired end-state of the Holy Grails listed in the periphery. Chart 1.7: Critical Future State Requirements and Holy Grails of the Future SMART MANUFACTURING Smart Integrated Operations for Oil and Gas Intelligent Embedded Platform Management DIGITAL OPERATIONS Flexible Business Process for Manufacturing Risk Management Smart Integrated Operations for Power and Mining Integrated Supply-Chain Risk Management End-to-End Supply-Chain Optimization Smart Business Collaboration Total Integrated MES ON-DEMAND AND REAL-TIME REMOTE MONITORING INTEGRATED MANUFACTURING SERVICE ECOSYSTEM SOURCING LIFECYCLE MANAGEMENT ADAPTIVE AND CONTINUOUS OPTIMIZATION DID Platform for O&G COLLABORATIVE MANUFACTURING MANUFACTURING OPERATIONS RISK MANAGEMENT GLOBALIZATION Remote Asset Management SERVICE DELIVERY INNOVATION E-CONVERGENCE End-to-End Product Engineering and Lifecycle Services Smart Supplier Sourcing Total Plant Ecosystem Energy Optimization SMART RISK MANAGEMENT Total Integrated QMS Predictive and Preventive Risk Intelligence Virtual Systems and Process Integration FRUGAL ENGINEERING AND MANUFACTURING SMART Automation Systems Security Cloud Services for Manufacturing Enterprise Applications Virtualization TECHNOLOGY Integrated Analytics Platform KNOWLEDGE MANAGEMENT SYSTEMS GRAYING WORKFORCE EXPERT SYSTEMS SMART SECURITY MANAGEMENT Predictive Threat Intelligence Management VIRTUAL MANUFACTURING PLATFORM SMART ANALYTICS In-Memory Analytics Enterprise Business Discovery Platform Integrated Plant Operation Lifecycle Management CONTROL ON THE GO Unified and Total BI INTUITIVE SYSTEMS Engineering Simulations Operator-Driven Collaboration and Optimization Semantic-Based Intelligence Smart, Predictive and Preventive Asset Management ENTERPRISE PROCESS OPTIMIZATION AND COLLABORATION Enterprise Mobility for Manufacturing SUSTAINABLE AND INTEGRATED ASSET LIFECYCLE MANAGEMENT END-TO-END MOBILITY Source: Frost & Sullivan,Visi-MAP 2.0 Report For the purposes of this whitepaper, we will be looking at the convergence trend of Collaborative Manufacturing and the Critical Future State of Smart Business Collaboration. Subsequently, we will provide a best-practice analysis of Cisco’s solutions and services for the Manufacturing industry. Manufacturing Convergence Trend 8: Collaborative Manufacturing The manufacturing world is becoming increasingly connected, converged and collaborative in nature. The ‘new normal’ of manufacturing requires sustainable collaborative integration between heterogeneous assets in order to deliver increased return on shareholder equity, maximize productivity and throughput, at reduced performance variability. In the global market, U.S. manufacturers have a reputation for being innovative, but rarely have their products been viewed as cost-effective. Due to past successes, U.S. manufacturers have developed a reliance Frost.com 13
  14. 14. Frost & Sullivan on the long, single-model production runs supported by inflexible manufacturing processes and facilities. However, in recent times, they are under considerable pressure to provide high-quality, affordable products of many variations across market segments. To stay relevant in the 21st century, they need flexible, agile, and scalable systems. They have to cultivate a “collaborative manufacturing” environment where production lines, processes, and facilities come together harmoniously to quickly and cost-effectively create new product designs. Some of the critical business imperatives of collaborative manufacturing are as shown below: • Drive real-time and issue-based collaboration • Create agile value-networks that smartly connects disparate segments on-demand • Manage self-healing processes to reduce cost of goods sold (COGS), cost of poor quality (COPQ) and loss of potential business opportunities • Maximize asset uptime and utilization – Obtain more output by giving less input • Assist in flexible modular manufacturing to transition from ‘value-for-money’ to ‘valuefor-many’ • Deliver on-demand training and effectively manage entry of digital natives • Develop customer-centric solutions and create predictive networks for services. SMART BUSINESS COLLABORATION As operations become increasingly global, resources critical to key strategic decision-making processes have become spatially distributed. Therefore, end users are adopting collaboration solutions to reduce waste, minimize risk while driving collaborative business decisions. The backbone of the future enterprise is a fast, secure, scalable and reliable network, which enables smart, end-to-end data transfer, collaboration and last-mile connectivity. Enabling this collaboration, Cisco’s solution allows manufacturers to gain a competitive edge by solving the above imperatives: by tying its solutions and services together, Cisco is able to address the challenges of collaborative manufacturing by helping transfer data from pointof-generation to point-of-decision in real-time. Cisco’s ability to create a totally connected enterprise allows it to effectively manage the challenge of change. The core solution-sets that enable Cisco to overcome the challenges of collaborative manufacturing and smart business collaborations market are: CISCO’S ONE NETWORK ARCHITECTURE The era of proprietary networks has clearly given way to the age of Internet of Everything/ Internet of Things architecture, which flips the balance by fostering collaboration through convergence. The current convergence in the manufacturing world is between people, process and technology. The Internet of Things (IoT) / Internet of Everything (IoE) is creating a network 14 Frost.com
  15. 15. Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc. topology of unified connectivity and thereby driving torrents of actionable insights from mountains of data. The impact of connectivity and converged networks is totally transforming the manufacturing landscape by empowering manufacturing personnel with real-time process knowledge so that they can create changes to process parameters in real-time. This is the future, wherein reduced workforce could produce more with less. The baseline requirement for collaboration in manufacturing industry is a safe, reliable and a secure network architecture that drives business and customer-centricity. Cisco’s Open Network Environment (ONE) framework truly is a game changer that addresses tomorrow’s challenges today. The capability of the network to smartly connect any asset based on its open nature, while squeezing more from existing infrastructure, is a perfect solution made to meet end-user expectations. Clearly, the Cisco ONE architecture was built on the Borderless Networks architecture but blends with standard industrial-grade open IP Ethernet to make organizations super-efficient and ultra-responsive to market needs. As manufacturing braces itself for continuous disruptions, an architecture which supports present-day needs and scales efficiently as environments change is clearly a vision that Cisco has delivered upon. “This is about a business change, to make our manufacturing facilities more flexible, more agile and more lean.” Hardware Agnostic Solutions and BYOD Support: Cisco provides millisecond and even sub-millisecond response times for its networks and provides real-time video streaming- not just for workforce collaboration but for asset monitoring, too. It can customize solutions to clients’ needs based on their investments and bandwidth capabilities. Cisco also provides a TelePresence suite that enables high-quality, high-definition, realistic, and lifelike video in any organization. These solutions are built to offer the best collaboration abilities, thus making talent available on demand, irrespective of location, and ultimately saving on telephone bills and travel costs. Training and team development also can be done at significantly lower costs by using video presentations. Cisco supports multiple deployment models, including the cloud, on-premise, and various hybrids, and the company works across enterprise protocols, including Public Switched Telephone Network (PSTN). Moreover, Cisco leads the way in developing platform agnostic solutions to heavily support the bring-your-own-device (BYOD) trend which is drive by the exponential increase in smartphone and tablet users. Cisco is the only solution provider to offer an exhaustive range of services for both shopfloor and enterprise networking along with connectivity and collaboration between the two. By offering a single-point solution, comprising both hardware and software elements, Cisco is able to offer the most expeditious response times to support queries for in-house resolutions. Cisco’s focus on customer value is thus becoming a benchmark in the converged and smart enterprise collaboration and networking infrastructure space. Cloud for Manufacturing Operations As anytime-anywhere connectivity becomes a new paradigm for manufacturing, cloud becomes the secret glue in bringing technologies and services to be deployed at affordable rates. While the cloud model solves many business imperatives for manufacturers (like on-demand needs, role-based management, etc.) there is a need for a network of technologies to truly realize this vision for manufacturing. While there are many enterprise-class solution providers for Frost.com 15
  16. 16. Frost & Sullivan cloud, Cisco’s strategy uniquely positions it to deliver a lifecycle approach for its customers. The unified data center delivers private and secure infrastructure for manufacturing operations which dovetails into the network connecting external entities. Assisting these two is the collaboration solution suite which ranges from TelePresence, Jabber and a range of mobilitycentric applications all of which enable a true virtually collaborative enterprise. The breadth and depth of Cisco’s experience helps it to clearly deliver strong service support through the entire implementation cycle and enables customers to realize incremental value as the organization scales. Manufacturing Business Video Solutions Urbanization and globalization are two mega trends that are driving the mobility aspect of workforces. The ability to stay connected drives the demand for remote collaboration solutions. As solution providers push the envelope to drive next-generation technologies, Cisco’s current technology cluster in this space enables it be an industry pioneer and leader in development of these technologies. The visionary innovation bought to the table by Cisco through solution sets like video surveillance enables disparate segments of the manufacturing value-chain to collaborate more effectively and efficiently. The technology sets allow the organization to always see a single version of the truth, while minimizing the need for duplication of efforts. Smart Business Collaboration Ecosystem The new normal within manufacturing is ‘collaborate to compete’. Cisco was clearly one of the pioneers to have embarked on this journey to create an ecosystem of partners that are truly aligned to deliver the future requirements of manufacturing. As industry evolves, the sheer scalability of Cisco’s ONE architecture positions it strongly to partner with emerging technology solution providers while driving immense value-proposition for the clients. Hence, partnering with Cisco assures customers of being constantly ahead of competition. Two key partnerships that help Cisco in the manufacturing industry are as follows: • The combination of Rockwell Automation’s leading automation offering and Cisco’s networking infrastructure has resulted in a deep integration that offers exponentially higher benefits to their customers. The Stratix Layer2 and Layer3 switches, developed especially for rugged manufacturing environments, create reliable networking for both IT and control personnel. Along with Cisco’s switch architecture and powerful configuration tools, granular insight and control over plant operations not previously conceivable is made possible securely. The collaboration also helps the companies deliver services including network assessment, management, auditing, and architecture services. • The alliance between Emerson Process Management and Cisco allows wireless technology deployment across manufacturing industries. The architectural capability to scale effectively without compromising on compliance enables the organization to precisely position a unique differentiation in the market. 16 Frost.com
  17. 17. Driving Smart Business Collaboration in Manufacturing: A Next-generation Best-practice by Cisco Systems, Inc. Energy Management Energy is an asset. Sustainable management of energy requires a balance between consumption, carbon footprint and manufacturing excellence. The opportunity at stake is large, as industrials and manufacturing sectors consume at least 50.0% of the world’s energy supply. Cisco’s EnergyWise architecture enables energy management across the entire environment that is connected over its architecture. The IP-enabled energy management allows manufacturers to judiciously conserve and manage energy on-demand and be smart about consumption. The interfaces used to securely connect islands of assets include Simple Network Management Protocol (SNMP). The capability to drive performance and maintenance improvements based on energy consumption patterns is another core benefit of using the EnergyWise architecture. Best-practice case study from Cisco Preferably General Motors. (Need approval from Cisco) “Cisco empowers collaboration, so you really can be there without leaving here. They are saving money and enabling us to collaborate and innovate faster, smarter, and more sustainably than ever before.” CONCLUSION Cisco, through its integrated, vertically relevant solutions for business and operations networks, along with its expertise in the manufacturing industry, can deliver to its customers the most wholesome and seamlessly connected solutions that drive efficiency, intelligence, and optimization across business verticals. The highly reliable, secure, scalable, open and next-generation architecture addresses present and emerging challenges of customers. The ONE Enterprise architecture further bolsters the game changer status of Cisco. The company can also leverage an excellent partner ecosystem, including partnerships with key automation and intelligence solution providers, to ramp up on capabilities, thus offering customers consistently high value products, solutions and services. These factors clearly differentiate Cisco in the Smart Business Collaboration Solutions Space for the Manufacturing Industry; thus, Frost & Sullivan recognizes Cisco with the 2013 Customer Value Enhancement Award. Frost.com 17
  18. 18. Silicon Valley 331 E. Evelyn Ave. Suite 100 Mountain View, CA 94041 Tel 650.475.4500 Fax 650.475.1570 San Antonio 7550 West Interstate 10, Suite 400, San Antonio, Texas 78229-5616 Tel 210.348.1000 Fax 210.348.1003 London 4 Grosvenor Gardens London SW1W 0DH Tel +44 (0)20 7343 8383 Fax +44 (0)20 7730 3343 877.GoFrost • myfrost@frost.com http://www.frost.com ABOUT FROST & SULLIVAN Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today’s market participants. For more than 50 years, we have been developing growth strategies for the Global 1000, emerging businesses, the public sector and the investment community. Is your organization prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies? Contact Us: Start the Discussion For information regarding permission, write: Frost & Sullivan 331 E. Evelyn Ave. Suite 100 Mountain View, CA 94041 Auckland Bahrain Bangkok Beijing Bengaluru Bogotá Buenos Aires Cape Town Chennai Colombo Delhi / NCR Detroit Dubai Frankfurt Iskander Malaysia/Johor Bahru Istanbul Jakarta Kolkata Kuala Lumpur London Manhattan Mexico City Miami Milan Mumbai Moscow Oxford Paris Pune Rockville Centre San Antonio São Paulo Seoul Shanghai Shenzhen Silicon Valley Singapore Sophia Antipolis Sydney Taipei Tel Aviv Tokyo Toronto Warsaw Washington, DC