North American Manufacturers Go Digital to Navigate Changes

Automation, digital twins, supply chain diversification help companies thrive despite ongoing disruptions, ISG Provider Lens™ report says

Industrial companies across North America are investing in smart manufacturing, supply chain improvements and aftermarket services in response to multiple market trends, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2023 ISG Provider Lens™ Manufacturing Industry Services and Solutions report for North America finds that inflation, supply chain issues, regional conflicts and accelerating product release cycles have led many companies to step up their technology and services investments. Productivity improvements, cost reduction and supply chain resilience are top priorities.

“The plants of the future will be connected, digitally enabled factories that revolutionize the whole manufacturing ecosystem,” said Bob Krohn, ISG partner, Manufacturing. “Companies will profoundly benefit from access to more data, extracted from more parts of the value chain and delivered faster than ever.”

North American firms are leading adopters of smart manufacturing, a set of innovations that enable shop floor digitalization, automation and asset management, and of new data-driven capabilities such as real-time demand forecasting, the report says. Companies are adding so much automation to systems that cooperation between IT and operational technology (OT) teams now includes engineering technology (ET) roles, making IT/OT/ET collaboration an essential strategy.

Digital twins — virtual recreations of processes and products — are becoming an increasingly important tool in both discrete and process manufacturing, ISG says. They enable companies to create better designs, optimize manufacturing processes and supply chains and accelerate engineering. Manufacturers and providers are now solving a growing digital-twin management challenge by closely integrating the simulations with product lifecycle management software.

As supply chains recover from disruptions caused by the COVID-19 pandemic, manufacturers now have better access to semiconductors and other components that had became scarce, the report says. However, geopolitical conflicts and other events are still affecting some supplies, leading some North American manufacturers to diversify their supply chains through in-house manufacturing and nearshoring to Latin America.

In the face of growing manufacturing challenges, many firms are also diversifying their revenue streams by introducing service-based business models, such as subscription, pay-per-use and as-a-service, ISG says. Data and connectivity now enable companies to better monitor and support products after sale, opening up new revenue streams.

“Aftermarket services provide data that helps manufacturers understand how their products perform and are used by customers,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “This feeds back into product improvement and new product development.”

The report also explores other trends affecting North American manufacturers, including aging workforces and efforts to minimize the environmental impact of used products.

For more insights into manufacturers’ challenges and advice for addressing them, including how to partner with a provider to strengthen manufacturing resilience, see the ISG Provider Lens™ Focal Points briefing here.

The 2023 ISG Provider Lens™ Manufacturing Industry Services and Solutions report for North America evaluates the capabilities of 33 providers across four quadrants: Aftermarket Services, Agile Product Development and Design Services, Digital Factory/Manufacturing Solutions and Manufacturing Supply Chain and Procurement Services.

The report names Accenture, Capgemini, Cognizant, HCLTech, IBM Consulting, Infosys, TCS and Wipro as Leaders in all four quadrants. It names LTTS, NTT Data, PwC and Tech Mahindra as Leaders in two quadrants each. Akkodis, Harman DTS and LTIMindtree are named as Leaders in one quadrant each.

In addition, Akkodis, Genpact, Harman DTS and LTIMindtree are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

The 2023 ISG Provider Lens™ Manufacturing Industry Services and Solutions report for North America is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

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