IDC Insights: From Efficiency to Market-Drive

June 2, 2020

Kevin Prouty, Group Vice President, IDC Energy & Manufacturing Insights

Through most of the latter half of the 20th century, the operations of companies across most industries have been driven by increasing efficiency and reducing waste. Whether through Lean, Six-Sigma, or any other type of continuous improvement philosophy, factories, banks, hospitals, stores, etc. have benefited from this organized and aggressive push for operational excellence.
But as Digital Transformation (DX) has become the norm for the drive to change how companies adopt technology and react to market disruption, operational organizations have continued to be locked in on driving efficiencies while not fully embracing DX. That is all changing. Companies like Ford, GE Healthcare, Georgia Pacific, etc. are already using digital capabilities in a drive to build resilient operations that can shift quickly to meet market demands, global events, supplier disruptions, etc.
In short, the Future of Operations is the transformation in operations from an efficiency focus to being resiliency-driven to support the increasing market demand for customization and experiences. That doesn’t mean that efficiency and operational excellence are going away, but the key is becoming resilient on top of being efficient.
The five key tenants of the Future of Operation are:

Evolve beyond continuous improvement, lean, and six-sigma to resiliency and market focus
Embrace complexity in products, services, and markets while minimizing complications
 Resilience in adapting to changing markets and demands without losing the core operational purpose
Use digital capabilities to build a resilient organization and operation
Develops a converged IT and Operations Technology (OT) function in Digital Engineering

The future of operations depends on companies being able to transform their operations from siloed groupings with limited digital interconnections and disjointed data governance to digitally enabled and resilient decision-making machines.
Future of Operations and Resilient Decision-Making
The Future of Operations becomes reality when companies build on their current infrastructure and digital capabilities to develop resilient decision-making. Resilient decision-making is defined as having the ability to use all available data and information to rapidly and effectively make decisions that keep your operations aligned with customer expectations and demands.
One of the critical aspects of the evolution of resilient decision-making is assuring all the critical data and information is ingested, contextualized, organized, and visualized for key decision-makers. The core goal is the unification of the operational data stream with the data from the rest of the enterprise. Traditionally, operational data has been siloed by both technology and...