3 IDC FutureScape prediction reports for manufacturing in 2023

By Mandy Lin, Senior Director of Manufacturing Industry Marketing at Microsoft.

April 3, 2023

The International Data Corporation (IDC) is one of the world’s leading market-intelligence providers for the information technology and consumer technology markets.

The IDC published three reports with predictions for manufacturing in 2023 that we would like to highlight for this audience:

Microsoft recently had the privilege of speaking with John Snow, IDC’s Research Director for Product Innovation Strategies about these new reports. John has a wealth of knowledge and insight into the forces driving change in manufacturing and is one of the co-authors of IDC’s “IDC FutureScape” predictions for manufacturing in 2023.

The predictions in these reports are for the years 2023 through 2027.

Each report covers the top 10 predictions for 2023 and they touch on three key topics:

Technology will gain data that will spark insights and change.
Improvements to supply chain management and sourcing strategies will lead to increased efficiency and resiliency.
The need to attract and retain talent with the right skills, training, and experience will continue to be critical to success.

The importance of technology and data

Data will be gathered to form insights, from which decisions will be made to change many aspects of the industry. That part is not new, it’s happening right now. What will evolve is how that data is gathered, and how insights will allow real-time decisions. This will allow the product developers to mine service interactions and work order data to improve product quality and meet their targets. Designers will have real-time feedback on quality issues and improving product success rates will go up by 3 percent. Taking an ecosystem approach to quality management will be adopted by 50 percent of G2000 original equipment manufacturers (OEMs) by 2026.

The importance of data security will continue to be at the forefront of every business. By 2027, manufacturers will increase the use of the internet of things (IoT) and operational technology (OT) cybersecurity solutions at the edge, cutting OT cybersecurity breaches in half.

Have you deployed enterprise-wide AI-based tools? These tools can help maximize the value of data and result in up to 5 percent improvement in revenue and profit. By 2025, 40 percent of manufacturers will have achieved this milestone.

The industrial metaverse will be included by 20 percent of G2000 manufacturers by 2025. Including the metaverse in the digital roadmap will address advanced simulation, cross-domain collaboration, and safety.

In the Product and Service Innovation space, IDC predicts that by 2025, 70 percent of G2000 OEMs will deploy digital twins for collaboration across organizations and ecosystems to accelerate product innovation, improve quality, and reduce cost. This technology can be used to create models to predict how connected environments can work.

We see the power of the cloud every day from our customers. For instance, Bosch has developed an Integrated Asset Performance Management system powered by a digital twin that runs on Microsoft Azure. This system gives machinery the ability to indicate when they need maintenance, reducing costs and improving up-time.

Manufacturers will use technology to build and improve customer satisfaction scores. By 2026, more than 65 percent of equipment OEMs will partner with their clients to access real-time information to drive remote monitoring and resolution activities, with customer satisfaction scores of up to 5 percent.

In the supply chain area IDC predicts that by 2026, 45 percent of G2000 organizations will operationalize integrated sustainability in the supply chain and effectively report impact data, enabling a 10 percent reduction in waste and improving competitive advantage.

Rebalanced resiliency for the future

Gaining efficiencies and bolstering resiliency will benefit the industry in the coming years.

Managing supply chains to reflect the realities of inflation and efficiency will allow organizations to recover 2 percentage points of margin by 2023. Implementing multi-shoring sourcing strategies to address risk will result in a 10-percentage point improvement in supply reliability for 50 percent of companies by 2024.

Adopting product carbon footprint as a key metric will become the standard. This is because, by 2026, regulations and sustainability-linked lending will require them. An estimated 60 percent of global manufacturers will adopt this metric.

In the Supply Chain 2023 prediction report, the IDC predicts that by the end of 2023, 50 percent of supply chain organizations will have rebalanced resiliency efforts to the realities of inflation and necessary efficiency to recover 2 percentage points of margin.

In the Product and Service Innovation space, IDC predicts that by 2026, market relevancy and survival needs will force at least 60 percent of G2000 OEMs to partner with engineering services providers to codevelop and maintain products and ensure operations resiliency.

In the Supply Chain area, IDC predicts that by 2026, 55 percent of G2000 OEMs will redesign service supply chains based on AI, ensuring the right spares are available and positioned to solve 75 percent of issues prior to failure.

Recruiting and retaining talent

Finding and retaining talent with the right experience and skills will continue to be a critical target going forward. By next year, digital literacy will be a key skill set. These skills are needed to support digital transformation and enterprise technology adoption.

After you have successfully found the right people, with the right skills and training, technology will help keep them safe. Specifically, by 2024, 5G connectivity will improve worker safety, resulting in a 20 percent reduction in lost time accidents.

In the Product and Services area, by 2023 60 percent of G2000 OEMs will set up dedicated incentives and programs to drive engagement improving worker satisfaction by 10 percent annually resulting from the difficulties to acquire service talent.

According to Jon Snow, by the end of 2024, 50 percent of manufacturers will prioritize digital literacy as a key skill set when recruiting talent. Manufacturing long was seen as the quintessential “blue collar” job—one that didn’t require a lot of book smarts but still paid well. That’s no longer the case. The growing use of technologies such as predictive maintenance using IoT sensors and AI makes digital skills a requirement.

We hope that the manufacturing industry can utilize these powerful insights from the IDC FutureScape reports to gauge progress, identify areas to focus on, and improve how to be strategic when planning and preparing for the future.