Data Mastery in Manufacturing

Source: Manufacturing Leadership Council (MLC) Survey Report: “MLC-Data-Mastery-Survey-10-3-24.pdf" (June 2024)

Main Themes:

• Data as the Core of Manufacturing 4.0: The report emphasizes data's crucial role in optimizing manufacturing operations and driving innovation.

• The Journey to Data Mastery: Achieving true Data Mastery is a complex process requiring effective data governance, organizational alignment, and a data-driven culture.

• Business Impact of Data: Manufacturers are utilizing data to drive improvements in operational efficiency, cost reduction, and decision-making, but struggle to demonstrate its full financial value.

• Future Trends: The report anticipates a significant shift towards predictive analytics, increased automation, real-time data collection, and standardized data formats by 2030.

Key Findings and Ideas:

1. Data Governance and Organization:

• While manufacturers recognize the importance of data security and privacy (over 90% have formal or partial policies), data quality management lags behind.

• Quote: "While data quality is recognized as essential, most companies do not have a formal policy around data quality and instead manage it through individual silos and systems."

• Challenge: Aligning data strategy with overall business strategy is a major hurdle, with only 15% reporting full alignment.

• Leadership Gap: While C-suite leaders are often responsible for data governance, only 22% of companies link data activities to leadership incentives or KPIs.

2. Manufacturing Data:

• Data Sources: Traditional systems (PLCs, ERP) remain dominant, with newer technologies like vision systems and AI lagging in adoption.

• Data Volume: 44% of manufacturers have seen data volumes at least double in the past two years, with 50% expecting volumes to at least triple by 2030.

• Data Utilization: A shift from understanding and optimization towards prediction and automation is anticipated by 2030.

• Quote: "By 2030, the number of respondents expecting to be able to engage in predictive analytics will double."

• Data Analysis: Spreadsheets remain the primary analysis tool (68%), but AI adoption is increasing (57%).

3. Business Impact:

• Value Measurement: Less than 50% of manufacturers use validated financial metrics to demonstrate data value, often relying on operational performance as a proxy.

• Quote: "Instead, companies are using second order metrics (specifically operational performance) as proxies for the data’s value."

• Positive Impacts: Increased data has led to improvements in cost reduction, efficiency, productivity, speed, and quality.

• Limited Impact: Data has yet to significantly impact competitiveness, innovation, and workforce development.

• Decision-Making: 95% report data has led to faster and/or higher quality decisions, with 65% frequently or constantly making data-driven decisions today.

4. Future Trends:

• Data Integration: Coordinating data from different systems is the biggest challenge (53%) in achieving data-driven decision-making.

• Standardization: While only 46% currently have standardized data formats, 87% anticipate this by 2030.

• Data-Driven Competitiveness: A vast majority (86%) believe data will be essential for competitiveness by 2030.

• Quote: "Seizing the data opportunity requires strategic thought, persistence and adaptability."

Final Thoughts:

The report highlights both the progress and challenges in achieving Data Mastery. While manufacturers are increasingly leveraging data, there are significant organizational and strategic hurdles to overcome. The MLC emphasizes the need for persistent effort, adaptable strategies, and a focus on overcoming data silos to fully realize data's potential in driving manufacturing innovation and competitiveness.