While manufacturers have access to vast amounts of real-time data, a survey found that only 21% have successfully incorporated it into business processes, compared to 41% of companies overall. The main challenges for manufacturers are collecting real-time data due to outdated equipment and lack of direct access to market data. However, some manufacturers like BASF are using real-time information to optimize operations and adapt production based on external trends monitored in real-time. Widespread adoption of real-time data by manufacturers will require organizational changes and new skills that most have been slow to develop so far.

1. Leading in real time
An investigation of the impact of real-time business on strategy and management.
1 Cisco Technology Radar / More information at https://techradar.cisco.com
Manufacturers are slow to benefit
from real-time business
5. MANUFACTURING
Manufacturers are awash with data. From their
supply chains through to mechanical movements
on the shop floor, outbound logistics, sales, service
and beyond, the amount of real-time information
available to manufacturers is enormous.
Used effectively, this information can be used by
manufacturers to make operations more efficient and
to improve quality control. Looping in real-time data
from the market allows manufacturers to respond
quickly to fluctuating demand; and as products are
increasingly equipped with sensors and connectivity,
manufacturers’ ability to monitor how their products
are used and how well they perform in real time is
growing accordingly.
And yet, while the manufacturing sector mostly
recognises the potential of real-time information, a
survey by The Economist Intelligence Unit, sponsored
by Cisco, reveals that its adoption by the industry has
been slow.
Over one-quarter (26%) of the manufacturing
executives surveyed say their organisation makes
only limited use of real-time information and has no
overarching strategy. Just 21% have successfully
incorporated real-time information into their business
processes, compared with 41% of respondents across
all industries (see chart).
They are also less likely to have adapted their business
to make better use of real-time data. For example,
less than three out of ten (29%) have automated
business processes to respond instantly to real-time
information. Across all industries, this figure is 50%.
So why has adoption of real-time information been so
slow among manufacturers? The survey reveals that
the number one challenge they face in using real-time
information is collecting it.
This is a reflection of two particular difficulties.
The first is the manufacturing plant itself. This is
Real-time information offers manufacturers
the ability to manage production in response
to the business environment, but its adoption
by the industry has been slow so far
Written by The Economist Intelligence Unit

2. 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24%
% of manufacturing respondents
We have successfully incorporated real-time information into
over half of our business practices
We have successfully incorporated real-time information into
up to half of our business practices
We have recently started to implement our real-time business
strategy
We are developing a real-time business strategy
We make limited use of real-time information but we have no
overarching strategy
Not at all but we plan to do so in future
Not at all and we have no plans to do so
13%
8%
19%
16%
26%
18%
0%
How would you describe the extent to which your
organisation incorporates real-time information into its
operations
% of manufacturing respondents
2 Cisco Technology Radar / More information at https://techradar.cisco.com
Visibility across the value chain
relationship with the customer is mediated through
retailers, who may or may not share real-time
insights with their suppliers.
These difficulties are preventing manufacturers from
gaining a deeper, more timely understanding not
only of their own operations, but of the world around
them too.
of information services and supply chain operations.
This “reduces waiting times within production
processes, improves resource availability and
enables better high-level decision-making,” he says.
BASF also tracks industrial statistics and
macroeconomic trends to monitor the business
environment in real time. “We use this information
to increase our forecast accuracy concerning prices
as well as internal and external demand,” says Dr
Blackburn. With greater forecast accuracy and
speed, costs are kept in check and service quality
increases, he adds.
often comprised of decades-old equipment from
multiple suppliers that may not integrate effectively.
Extracting meaningful real-time information from this
infrastructure is no simple task.
Second, many manufacturers are not in a position to
collect real-time data from the market. Often, their
However, some manufacturers are beginning to use
real-time information to monitor the world around
them, and to adapt their production in response to
up-to-the-minute developments.
One example is the German chemicals giant BASF,
the fourth-largest manufacturer in Europe and the
17th-largest in the world. The company uses real-
time data to achieve transparency across its whole
value chain.
This includes collecting real-time data from
suppliers, explains Dr Robert Blackburn, president
Real-time information initiatives in the manufacturing sector are mostly focused
on internal operations. The chief driver among manufacturing companies
is process optimisation, the survey reveals, and the most common area of
application is operations management.

3. Now, the company is working to include weather
information and social media data into its forecasts
to ensure that it has the most up-to-date situational
awareness possible. “During a railway strike,
we expect that social media will deliver faster
information than traditional information channels,” he
says.
Another manufacturer using real-time information to
improve visibility throughout its value chain is Procter
& Gamble (P&G). In order to optimise production and
supply, the American consumer goods giant pays
particular attention to trends in retail demand.
“We are using real-time data to stay close to
consumers and our retail customers across the
globe,” says Guy Peri, chief data officer at P&G.
“This helps us be more responsive to our retail
customers, providing the products they want, when
and where they want them in a way that is more
cost-effective both for P&G and our retail partners.”
For one thing, P&G monitors social networks—as
well as internal operational metrics—to ensure that
quality is under control. “We analyse consumer data
to understand potential product quality issues in the
market and proactively make adjustments throughout
our supply chain,” explains Mr Peri.
The move to using real-time information from
outside the company to direct production requires
considerable organisational change for many
manufacturers, especially as decision-making is
increasingly automated.
“Change management will become an increasingly
important factor,” say BASF’s Dr Blackburn. “BASF
will have a long journey to go when it comes to
customers’ acceptance and reliance on system-
generated planning data rather than manually
planned data.”
It will also require new capabilities that are not
traditionally associated with manufacturing.
“Translating a real-world problem into a
mathematical model, hypothesis-building, interactive
exploration and so on require new skills and
capabilities,” Dr Blackburn adds.
Here again, though, manufacturers are behind
the pack. Only 22% of manufacturing executives
surveyed have hired experts in real-time information,
fewer than in any other sector. In both transport and
healthcare, by comparison, 49% of respondents have
done so.
This is soon to change, however: 60% of
respondents from the manufacturing sector expect
to hire real-time experts in the next three years,
more than in any other industry.
Similarly, 59% of manufactures expect their
company’s strategy to change as a result of real-
time information in the next three years, and 51% will
invest significantly in its acquisition.
The survey shows that while they acknowledge
the potential, manufacturers have been slow
to employ real-time information. Pioneers in
the sector are using real-time data not only to
optimise internal operations, but also to manage
production in response to changing conditions
outside the company. This will require considerable
organisational change—and manufacturers expect to
make the necessary investments to achieve that in
the near future.
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This article, written by The Economist Intelligence Unit
and sponsored by Cisco, examines global organisations’
use of real-time information and its impact on strategy
and management. It is based on a global survey of 268
executives, just under one-third of whom hold positions
in the IT department, while 47% are members of the
C-suite. Respondents were drawn from companies in the
healthcare, transport, retail, healthcare, manufacturing
and energy sectors, 49% of which have annual revenue
over US$500m.