Manufacturers’ success depends on evolving their networks

At a time when organizations around the world are focusing on the network as the backbone of their digital transformation efforts, the manufacturing industry stands out for channeling more investment into this area than any other sector.

According to survey data gathered for NTT’s 2022–23 Global Network Report, 75% of manufacturers are increasing their spending on the network as part of their broader IT spending, compared with 67% of all respondents across industries. Only the real-estate and construction industry and the technology sector come close to this level of fast-rising spending.

This is perhaps not surprising for an industry like manufacturing that relies heavily on technology to support vital goals such as business growth, innovation, boosting productivity and improving customer experience.

However, while two-thirds of manufacturers agree very strongly that the network plays a crucial role in enabling these business outcomes, 68% say the maturity of their network is negatively affecting their business delivery.

Top performers are doing it already

The Global Network Report identifies some respondents as top performers, based on their revenue growth and other factors – and there are some compelling findings about the behavior of these top performers, including those in manufacturing, compared with other respondents in the survey:

• Technology strategy: While top-performing manufacturers have commonly aligned their technology strategy with their business goals, only 52% of other respondents from the manufacturing industry reported doing the same.
• Network strategy: Similarly, 90% of top performers in manufacturing have aligned their network strategy with their business goals, but only half of the other manufacturers have done the same.
• New technologies: Most top performers (more than 75%) have also implemented technologies like private 5G, edge computing and virtual private local area networks (LANs), compared with only about 45%–60% in the overall manufacturing category.  
• Digital transformation: The top-performing manufacturers are speeding up their investment in digital transformation, but this was noted for only 59% of the rest of this industry.
• Network management: All top performers in manufacturing reported they are outsourcing or planning to outsource most of their network management to a managed service provider (MSP) in the next two years. Among other manufacturers, this figure was lower, at 78%.

It’s clear that success in manufacturing is coming to rely much more on technological progress than before – supported by a modern, agile network that can evolve with changing business demands.

But first, manufacturers have plenty of misalignment to straighten out. Apart from overall technology and network strategies, more than half of manufacturers said their security strategy was not aligned with their business strategy – at a time when network security should be a prime concern for any organization.

Also, nearly 60% reported misalignment between their managed-services strategy and their overall strategic business needs.

4 areas of network evolution

To address these shortcomings in the manufacturing industry, we focus on four main areas to help our clients evolve and future-proof their networks:

1. The importance of the network

If 9 in 10 manufacturers agree that the network is vital in enabling outcomes related to employee experience, customer experience and cost management, why are just 42% fully satisfied with their network capability?

Costs, operational complexity and a lack of expertise are contributing to these frustrations, even as 95% agree that their dependency on the network will grow in the next two years – including an accelerating move to the cloud.

Much remains to be done to help these organizations modernize their networks and achieve higher levels of network availability, scalability and performance.

2. Transforming the network

The network of the future needs to cater for changing workplace models, such as hybrid working, that require more connectivity, as well as a steep increase in connected devices because of the growing application of IoT in manufacturing.

Installing more sensors in a factory may lead to better control and data-based decision-making, resulting in cost savings and higher productivity, but only if the network provides the connectivity required for such solutions.

To transform the network, an organization needs the right budget and know-how – which isn’t always available. In this industry, 43% of organizations already outsource more than half of their network infrastructure, and 4 in 5 plan to outsource network technologies like security, the LAN and software-defined wide area networks in the next two years.

3. Managing and buying networks

The complexity and cost of managing a modern network may flummox the in-house IT resources – and budgets – of many manufacturers. That’s why, according to the Global Network Report, 96% of organizations in this industry are increasingly looking to partner with an MSP like NTT – and 86% prefer a single provider instead of having to manage multiple vendors.

Rising cybersecurity threats are a big motivator in this context, and flexibility is another factor, which is why the network-as-a-service model is listed as a preference by 92% of manufacturers. This model allows organizations to rely on the expertise of an MSP in a cost-effective and scalable way, and gives them access to the latest network innovations.

• ALSO READ → What is network as a service?

4. Network delivery

Much has been said about the big cloud migration, and this trend is present in manufacturing too. Again, cybersecurity concerns are top of mind, with 94% of manufacturers investing in these capabilities.

Then there’s innovation to consider: a modern network approach embraces AIOps, automation and advanced analytics, and making the most of these fast-developing technologies can be a challenge without expert assistance. As one would expect, automation is a topic close to the heart of any manufacturer, including automation in the network: 83% say a lack of automation and agility is keeping them from fully exploiting new network technology.

• ALSO READ → IoT helps manufacturers find things, and that’s just the start

The value of a partnership

As part of their efforts to realize the potential of Industry 4.0 in 2023 and beyond, manufacturers need to focus on technology adoption and workforce empowerment at scale, according to the World Economic Forum.

But they cannot focus on the technology only, as is evident from our survey: business and IT goals also need to come together in support of a healthier return on investment, and this creates complexity both in the C-suite and on the factory floor.

This is where working with an MSP like NTT is valuable: we help manufacturers adapt to the demands of their business and the broader industry while our networking capabilities complement their existing infrastructure and technologies to hone their competitive edge.

Visit our Global Data and Benchmarking Portal to access the full set of Global Network Report survey data, filter and export data, and build bespoke presentations.