Executive Overview
The investment behavior of companies in different industries varies strongly. In this periodic report, ARC Advisory Group takes a closer look into a number of different industries to identify drivers and their impact, not only on capital investment but also on revenues.
The presentations, panel discussions, and workshops, at the ARC Advisory Group's recent 19th Annual Industry Forum in Orlando, Florida, stimulated many lively and thought-provoking discussions around technology and innovation. While innovation has always been an important factor for success, today's ever-increasing competition further emphasizes its role in achieving competitive advantage.
A well-attended sessions at the recent ARC Industry Forum in Orlando, Florida focused on leveraging smart field systems to create value in process industries. Several presentations provided end user perspectives on employing smart sensors to improve process automation, asset management, safety, and/or physical security for industrial facilities and critical infrastructure.
Multiple converging trends make operator effectiveness even more important today than ever before. These include:
Attracting and developing new talent will continue to be an important issue in the evolving world of manufacturing. How can manufacturing entice the new generation of workers and how can businesses nourish and keep that talent over a long career? These are some of the questions proposed and discussed at ARC Advisory Group's 2015 Industry Forum in Orlando.
A half-day workshop at the recent 2015 ARC Industry Forum in Orlando, Florida on the Industrial Internet of Things (IIoT) included discussions on three related initiatives: Industrie 4.0, the Industrial Internet Consortium, and the Smart Manufacturing Leadership Coalition. In the latter discussion, Denise Swink, CEO of the Smart Manufacturing Leadership Coalition (SMLC), and other stakeholders provided updates on different SMLC initiatives.
Industrial Ethernet switches have blossomed in recent years from network accessory devices to core network infrastructure components. Customers increasingly rely on industrial Ethernet as their network platform of choice, recognizing that it can deliver concrete business benefits in areas, such as reduced machine downtime. Industrial Ethernet continues to cement its position as the platform of choice in automation architectures. This includes supporting emerging industry initiatives, such as the Industrial Internet of Things (IIoT), Industrie 4.0, and IT/OT convergence.
The worldwide enterprise software market declined by 0.6 percent year-over-year in the fourth quarter of 2014. The euro depreciated relative to the dollar by over 8.2 percent from 4Q2013 to 4Q2014. This exchange rate fluctuation had a substantial negative impact on the US dollar value of euro-denominated sales and the overall reported growth rate of the market.
Managing people, work process, and technology is the collective responsibility of a technical organization focused on manufacturing. Much like other business segments, as time marches on, the manner in which people organize and interact with technology must inevitably change. In particular, ARC Advisory Group has observed that the convergence and overlap of information technology (IT) and operational technology (OT) in recent years has created organizational confusion around ownership and responsibility.
The machine tool is the workhorse of the metal cutting manufacturing processes, but the consensus is that machine tools are widely underutilized in both highly automated and job shop facilities. According to ARC Advisory Group research and conversations with industry experts, 25 to 40 percent of available machine tool time is actually used for material removal. Many manufacturers operate blindly, rarely able to pinpoint the root cause of low utilization rates. However, progressive manufacturers seek to identify the cause of poor machine and operator performance.