Andrew McAfee at the MIT Center for Digital Business has published some research on IT practices he and colleague Erik Brynjolfsson conducted. Here is his commentary:

In line with prior research, standard inputs like capital, labor and IT were strongly associated with output. However, some firms vastly outperformed others, even when controlling for all the standard inputs.  We found that several of the management practices could explain these differences in performance. The strongest relationship, one that held up across all our analyses, was between higher output and greater emphasis on data-driven decision making. The companies that reported they had the data they needed and actually used it to make decisions (instead of relying more on intuition and expertise), were the ones with the highest productivity and profitability.

I am hearing a lot from automation suppliers who are developing better data capture, analysis and visualization tools for producers and manufacturers. These in turn lead to increased manufacturing efficiency and profitability. According to McAfee’s research, they are on the right track.

Some people who have implemented these systems have told me they are pleased. Just wondering about the rest of you. What has been your experience? Or, are you just now planning to beef up the manufacturing IT infrastructure?

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