Companies are constantly making changes to their operations in order to be more agile and innovative in this digital era.
Manufacturing companies that want to succeed must also accept digital disruption as a reality and create digital transformation strategies. The ultimate success through transformation can be achieved when companies are not reactive and look to innovate before the disruption happens.
Leaders in the manufacturing industry must focus on rapid implementation, digital adoption, process re-engineering, and predictive analytics.
In this blog post, we will explore the benefits, challenges, and basis on which your transformation strategy must be developed to stay ahead of the curve and counter any unplanned changes.
The latest technologies are making manufacturing smart and helping improve the speed of their supply chain to meet the needs of end-users.
New applications and technologies help them manage production in real-time by measuring the demand. Some early adopters of modern technology have taken a long lead in the current industrial revolution.
Benefits of digital transformation in manufacturing
I. Data-driven decision-making: With the proper implementation of digital transformation, the organization can leverage data to make crucial business decisions.
ii. Improved processes: Moving from traditional infrastructure to the cloud helps businesses automate, optimize, and improve processes. Employees can focus on more important work and this improvement is reflected in the bottom line of the organization.
iii. Empower workers: Employees’ working conditions can be improved by opting for digital manufacturing. It provides the workforce an opportunity to handle new technologies and gain much-needed exposure. It also enables organizations to attract talented people who can take the company to the next level.
iv. Enhance the overall experience: Digital transformation helps companies provide a personalized experience to their employees and customers. This helps employees accomplish their tasks on time and also provides customers a great experience with your product.
v. Real-time data: Live analytics helps you manage your equipment, and fill your inventory with necessary machinery. Organizations can also get data on raw material availability and link it with demand trends which will help project whether they will be able to provide supplies to their customers on time or not.
vi. Improved safety: Some tasks on the plant floor can be dangerous or even life-threatening. With automation and robotics involved, the workforce can be safeguarded. Moreover, these high-risk tasks are executed with high precision by industrial robots.
vii. Boost ROI: With the right technologies, applications, and processes, businesses stand a chance to save money and improve their overall productivity which helps them boost ROI.
Relevant Read: Digital transformation trends in manufacturing
Challenges of Digital Transformation in Manufacturing
A. Lack of tech aptitude:
For many traditional manufacturing companies, technologies of the 21st century could look alien. They may want to harness the power of data analytics but for that to happen, they have to master and implement the technologies like IoT, AI, ML, and Robotics.
These technologies are difficult to handle and integrate with each other to create a larger picture even for early adopters. The best option is to have external consultants and application experts in your transformation council. It will help you get started and bring the transformation efforts up to speed.
B. Outdated systems:
Replacing the legacy system in manufacturing is challenging in comparison to other industries as there is a higher involvement of physical machines. Organizations also factor in the cost of depreciation of the machine and try to use it for as long as possible, as the output more or less remains the same even with the reduction in the machine cost. This could be profitable for the foreseeable future but it comes at the cost of agility, flexibility, and efficiency.
Organizations can assess the value proposition of the new processes and tech stack. Based on this, they can assess at which point they need to make the switch to be financially viable without compromising the future benefits that can be generated with the modern tech stack.
C. Initial investment dilemma:
The market is ever-changing and especially in the post-pandemic world, businesses have to be agile. Organizations can achieve it by improving the small to medium operations which needs low efforts in comparison to major processes.
Usually, organizations are uninterested in changing processes that are working fine but in the larger scheme of things, the company can fall short of their customer's expectations and eventually, their competitors.
This could affect the bottom line, the solution to this is to first create a plan and improve existing processes using Business Process Improvement principles. It will help you generate measurable outcomes.
For example, you can embed IoT sensors with a servo motor to generate a signal to map the torque of the motor. These sensors can warn you if there is a potential for an increase and decrease in torque and help you act before the event takes place.
Relevant read: Right digital transformation questions to ask
Digital Transformation in Manufacturing Strategies
a. Buy-in and coordination at all fronts
You need workforce buy-in from the plant floor to IT. Everyone has to coordinate and communicate to get the job done. But change is difficult to accept and people won’t get on board unless they see value in it. It is important to help them comprehend the benefits of the change, such as the increase in efficiency and improvement of overall performance.
Explain the changes and the phases in which they will happen. Get their feedback at each stage and implement the suggestion to improve the existing plan. When employees get invested in the process, the chances of internal resistance reduces.
b. Optimization of processes
When a process is changed, the shift not only happens on the engineering equipment that is used but also the software that directly or indirectly helps the organization complete that process.
The business has to conduct a cost-benefit analysis and identify areas that can be improved. The organization has to work as one single unit, whether it is R&D, production, purchase, operation, maintenance, or IT. Everyone has to contribute their value to make this shift successful.
Relevant read: The complete digital transformation roadmap for enterprise
c. Drive efficiency with modern tech
Technologies like AI, ML, Robotics, and IoT play a vital role in industrial revolution 4.0. Companies must find a way to integrate these technologies to gain visibility across all verticals from the production floor to its supply chain.
It will help organizations run the plant systematically without incurring unnecessary costs. These technologies will help companies head towards the D2C (Direct to Customer) model and manage their inventory, production, and delivery efficiency.
d. Digital adoption strategy
All these complex technologies and their data are operated on web applications like a control tower, ERP, or inventory management system. Businesses deploy software to provide employees with an interface to accomplish their tasks across the organization. If employees do not adopt these software tools, it will drastically affect your business operations. Hence, digital adoption becomes the key to your entire digital transformation initiative.
Tools like Digital Adoption Platforms help employees easily navigate through applications and use them to their fullest potential. DAPs like Apty are powered by a powerful analytics platform that helps them gain valuable insights into how the process is being adopted and how each user group interacts with these applications.