The importance of connectivity for smart manufacturing:

Is your network best suited to overcome the connectivity challenges associated with smart manufacturing?

Three reasons why connectivity cannot be an afterthought

Manufacturing companies are operating in an era of accelerated disruption and uncertainty.

10 min read

It's not easy to be successful in the manufacturing world. We're in an era of accelerated disruption and a "new normal" characterised by continuous volatility and heightened uncertainty. In such times, with surging customer demand, faltering supply, an intensifying war for talent, and rising inflation, manufacturers need to deal with the immediate challenges but also not lose sight of the long term. Operations across a range of industries continue to be challenged by a myriad of issues, including supply chain disruptions, rising energy costs, talent constraints, and the pressure to improve their sustainability metrics.

Faced with today's business complexity, and the need to balance factory capability with volatile demand across elongated and dynamic supply chains, manufacturers need to harmonise, supervise, and coordinate execution activities across the company's and their suppliers' manufacturing operations — with greater real-time visibility. IDC defines smart manufacturing as the continuous process by which enterprises leverage cyber-physical convergence and digital skills to develop the production capabilities needed to compete in the modern economy.

The next five years will be transformational for operations as they find new and more effective ways to manage, analyse, and collaborate around operational data. The impacts go beyond the data itself to impact how decisions are made and who makes them.


IDC data shows that just over 30% of global manufacturers in Europe think they are mature in their factory initiatives.

There is still a long journey ahead, but there are many opportunities for those manufacturing companies that are willing to invest.

As companies progress on their smart manufacturing journey, we see three main reasons why connectivity can't be an afterthought and must be strategically planned and positioned alongside key factory investments.

IDC InfoBrief

Transform your factory with connectivity

Smart manufacturing is all about digitally connecting the manufacturing processes to drive operational excellence and innovation. Download today to discover a deep-dive into the strategic importance, and benefits, of leveraging intelligent connectivity to achieve information integration.

Reason #1

Equipment instrumentation and connectivity are growing, creating huge amounts of data

IDC estimates that over the next 12 months there will be a 23% increase in operational data (TB/day) produced by an average factory, reaching 320PB/year by the end of 2023. This vast volume of data is gathered, moved, processed, and acted on in a distributed environment to, from, and between clouds. To maximise the opportunities from this, the focus must be on a company’s digital infrastructure. This is because high bandwidth connectivity is essential to move large volumes of data around key points of the environment, quickly and reliably. Industrial companies need to address their network strategy to bridge user, compute, and store, handling massive data and distributed IT workloads.

Reason #2

5G will bring new connectivity features to support the smart manufacturing journey

5G technologies can seamlessly enable denser connectivity, higher data capacity and lower latency. In addition to site connectivity, 5G can provide local-area and wide-area connectivity for personnel, AGV, and IoT devices, with ultra-low latency and massive connection density where required and with guaranteed network performance enabled by network slicing. This enables several applications:

Product tracking can achieve a larger scale because of the greater number of connected endpoints a cell site can support.

5G can connect a feedback loop that continuously gathers large quantities of data about process activity and analyses them to identify areas that can be improved.

The ultra-low-latency use case of 5G makes it a highly responsive network — responsive enough that taking an action at one end of a connection can produce an action at the other end that is effectively instantaneous.

5G can help organizations by carrying high-definition multimedia information to AR-equipped "augmented" workers.

Reason #3

Connectivity is the centrepiece of the technology (r)evolution

A clear pattern is emerging when evaluating companies' investment strategies. The planned investments for operation technologies focus on building a cloud-based operational data layer enabling analytics and resting on solid connectivity and security components. This is a significant evolution over the previous generation of investments, where companies were mostly focusing on IoT, control systems, and connected machines. So, after a wave of investments dedicated to data creation, companies have moved toward information integration. Therefore, connectivity's strategic relevance is directly correlated with smart manufacturing maturity.

IDC InfoBrief

Transform your factory with connectivity

Smart manufacturing is all about digitally connecting the manufacturing processes to drive operational excellence and innovation. Download today to discover a deep-dive into the strategic importance, and benefits, of leveraging intelligent connectivity to achieve information integration.

Connectivity is a mission-critical element for Smart Manufacturing

IDC research highlights that for companies that view smart manufacturing as the strategic initiative and the gateway for process and business model innovation within the organization, connectivity is the underbelly of information flows and a mission-critical element in factory success. On the other end, when connectivity is based on machine requirements and no organic strategy is in place or connectivity is simply an afterthought, often no strategic vision exists for smart manufacturing. The short-term focus is on preserving existing methods and practices.

To progress through the stages, companies should focus not on the technology per se, but on how technology enables information management.

It is important to note that equipment and technology do not make as much difference as the ability to use information effectively to support business processes. To this end, organisations should keep the right focus on what matters while building the infrastructure for smart manufacturing. The strategic importance and benefits of connectivity to achieve information integration are maximised when connectivity takes centre stage.

Reaping the benefits: Connectivity in action to deliver value-added use cases in Smart Manufacturing

In our previous section, we talked about how connectivity can revolutionise the way data and information flows across the shop floor by not being an afterthought but a key element of smart manufacturing strategy.

As connectivity is a key element in bringing together all the technology opportunities that digital transformation provides on the shop floor, we have identified several key use cases to outline how connectivity can help deliver business value in the factory. It's worth noting that each use case demands a different location of workloads, including M2M, edge, and cloud. These locations need to be managed in synergy to create the best value for the business, and to achieve this an effective interplay between WAN and LAN connectivity is central.

It is not just about optimising existing processes but transforming the way factories are run — creating new compelling use cases that have to do with asset management, analytics, and ultimately running the processes more efficiently. Companies that have made the journey are already reaping the rewards.

For example, wireless data transmission — potentially enabled by 5G — is a key component to support the operations of automated guided vehicles (AGVs). In production, these assets automate the movement and transportation of materials, components, and finished goods in a factory or warehouse. This enables greater efficiency and productivity, as well as improved accuracy and safety. AGVs can be programmed to follow predetermined routes and can be integrated with other automation systems, such as conveyor belts and storage systems, to support the overall production process. They can also be used to transport goods to and from different areas of the production facility, helping to streamline the flow of materials and products.

In quality management processes, real-time monitoring and AI-enabled vision systems can support the autonomous identification of quality issues and provide the relevant data for the consistent realisation of quality levels as close as possible to a "golden batch" (this typically refers to a batch that meets all of the required specifications and has passed all quality inspections without defects or issues). A golden batch is often considered to be a benchmark for quality and can also be used as a reference for future production runs.

A lot of opportunities also reside around the real-time monitoring of production equipment telemetry and diagnostics to improve the reliability and efficiency of machines, reducing downtime and improving the overall productivity of the production process. Real-time data is used to identify when equipment is likely to fail and when preventative maintenance should be performed. This enables maintenance teams to respond quickly and prevent equipment failure or even schedule prediction-driven maintenance activities in advance, reducing the likelihood of unplanned downtime and identifying opportunities to improve the efficiency of production equipment, reducing energy consumption and boosting overall plant productivity.

In terms of overall plant productivity, real-time production monitoring is the main tool to understand the status of shop floor operations, helping managers and executives with the overall efficiency, effectiveness, and reliability of their operations to identify any bottlenecks or inefficiencies that may be impacting productivity. To this end, advanced connectivity is key to capturing data and zero-latency transmission, seamlessly ingesting it, and shifting it securely to business applications and data lakes to run advanced analytics and AI analysis.

Another important use case is around media delivery, capture, and management for AR/VR tools in the factory.

These technologies can be used to create immersive training experiences that enable employees to learn and practice new skills in a safe and controlled environment. This can help to improve the efficiency and effectiveness of training, reducing the time and cost required to train new employees.

On top of that, AR/VR tools can be used to create shared virtual environments where teams can collaborate and communicate in real time, regardless of their physical location. This can improve communication and coordination, leading to more efficient and effective collaboration in the factory. But for this to happen, high bandwidth connectivity is essential to ensure the best experience for the users and the success of these deployments.

We have monitored a number of deployments across these scenarios, and the main areas of improvement we have witnessed have been around a reduction in scrap, defects, and laboratory failures in quality management. In production, throughput and productivity are boosted thanks to unscheduled asset downtime or outages, energy cost per unit, and safety incident reduction, paired with an increase in the speed of changeovers and improved overall inventory visibility.

With industrial connectivity, the benefits are there, competitors are investing, and technology is mature. As manufacturers become increasingly sophisticated in their use of technology, what is "nice to have" increasingly becomes "must have," and ambitious companies should review their connectivity foundation to make sure it's ready to support increasing amounts of digitally enabled assets and processes.

IDC InfoBrief

Transform your factory with connectivity

Smart manufacturing is all about digitally connecting the manufacturing processes to drive operational excellence and innovation. Download today to discover a deep-dive into the strategic importance, and benefits, of leveraging intelligent connectivity to achieve information integration.

Challenge the challenges: Debunking three myths about connectivity on the shop floor

In our previous sections, we talked about connectivity being a central element and mission-critical for manufacturers on their journey toward smart manufacturing. Industrial equipment is at the centre of a convergence of technologies enabling the next wave of productivity gains. This is particularly relevant now, as more equipment is "smart," enabling improved connectivity and edge computing. The opportunity for improved equipment uptime has now become a reality. Factory networks will need to be able to cope with the data flows coming from the various pieces of equipment.

We also talked about building compelling use cases to not just optimise existing processes but transform the way factories are run and how each use case demands a different location of workloads, including M2M, edge, and cloud. These locations must be managed in synergy to create the best value for the business. WAN and LAN connectivity is central to this, as it can revolutionize the way data and information flows across the shop floor.

The proliferation of natively connected machines and the Internet of Things (IoT) is creating an unprecedented data explosion in the operations technology (OT) space. As connectivity is now pervasive, companies cannot treat their plants and assets as separate from their IT systems.

Below we will discuss three common myths and misconceptions about connectivity on the shop floor:

Myth #1

"Shop floors work better in isolation from other systems and shouldn't be connected to avoid disrupting core processes."

There are several reasons why factories can no longer be treated as isolated entities from the rest of the organisation and why they must be integrated into a network of global intelligent operations that are visible in real time. Workers need to rely on operational evidence and advanced collaboration tools, while monetising industrial data is all about meaningful shop floor-to-boardroom data streams.

So, data should flow from the single asset level to the enterprise level for decision makers and for information should also flow across companies. For this to happen, high bandwidth, secure, low-latency connectivity is central by enabling big and small data flows, from owned cloud to/from distributed clouds and multiclouds. Without it, digital technologies deployed on the shop floor — regardless of how advanced they are — will simply not deliver the desired outcomes. So, reliable, secure, and high-performance infrastructure (both on-prem and in the cloud) is paramount to guarantee a successful transition to smart manufacturing.

Myth #2

"Upgrading software tools will be enough to move toward smart manufacturing."

Many companies make the mistake of assessing the state of their factories based merely on the size of the technology stack they have deployed. But IDC research has shown that for many companies investing in wider asset instrumentation and connectivity should not be the final goal, but the foundation to deliver transformational, value-added initiatives. The key to success in this journey is the ability to move away from an approach that sees smart manufacturing initiatives as one-off stunts to one that incorporates them at the centre of the business strategy. This is essential to master business transformation and balance cost, quality, speed, agility, and innovation. Manufacturers must also address the corresponding risks related to digital transformation, in particular the vulnerability to cyberattacks related to increased connectivity.

These changing business requirements are already pushing a change toward "de-commoditising" operations, so companies must make sure people's intelligence is an integral part of the process. Companies are investing in upskilling initiatives to ensure that workers' skills and capabilities keep pace with the demands of digitalisation. This should be supported by a wider cultural shift in the organization that recognizes digital transformation as the main catalyst for innovation and long-term resilience.

Myth #3

"Connecting machines and tools is expensive and complicated."

IDC research has shown that solving IT/OT integration problems often exceeds companies' internal capabilities and requires a holistic approach to industry transformation. For example, the vast majority of manufacturers' OT personnel are not ready to handle digital initiatives. This of course includes connectivity as well, with many industrial organisations struggling to manage their industrial connectivity without external support. There are still many barriers to overcome, and this requires active support from external companies. According to IDC research, 32% of worldwide manufacturers plan to use managed services for industrial networking within the next three years.

The role of external advisors is to solve multiple technical issues including concerns about the security of integrating IT and OT systems, lack of expertise or staffing capacity on how to accomplish integration, technology issues, and lack of compatibility with legacy applications. External partners can act as a catalyst to drive decision making and enable project execution. They can help jumpstart technology initiatives on the shop floor and overcome barriers related to organisational complexity, lack of budget, lack of familiarity with IT and OT integration across the organization, and lack of a solid business case for the initiative.

IDC InfoBrief

Transform your factory with connectivity

Smart manufacturing is all about digitally connecting the manufacturing processes to drive operational excellence and innovation. Download today to discover a deep-dive into the strategic importance, and benefits, of leveraging intelligent connectivity to achieve information integration.