A Strategic Roadmap for Digital Transformation in Manufacturing

The COVID-19 pandemic has become a point of no return for manufacturers, changing the way people buy, communicate, work and reach their business goals upside down.

Driven by lockdown restrictions that have shifted everything and plagued the industry, the manufacturing companies have to improve operating productivity and generate unparalleled capabilities for business in an ever-competitive landscape.

The need of turning to data-driven business causes the hype surrounding Industry 4.0, Internet of Things, digital transformation and other today’s buzzwords.

• By 2025, more than 80% of companies will have digitized their value chains, meanwhile today only one fifth of the industrial companies have transformed their key processes along the value chain to digital.
• According to the research, manufacturing and engineering industries will make above average investments (3.5% per annum) in digital enterprise solutions. This sector also places its focus on the optimisation of the logistics systems.

Manufacturing industry is facing digital disruption due to the new COVID-19 realia, that is about transforming existing business models. With customers requiring a heavily personalized approach, integrated products and more flexible market standards, manufacturers are expected to provide digitally enhanced services such as real-time tracking on logistics, improved inventory management, and just-in-time production.

But, spoiler alert, the future of manufacturing will be digital, so manufacturers ought to rethink every aspect of the organization to get it automated.

Challenges that Are Taking Hold in Manufacturing

Inefficiencies in the supply chain

In most cases, manufacturing companies underestimate the true value of automation in order to eliminate time-consuming tasks, prolongation and redundancies. Being weaponized with the right digital solution, manufacturers can implement real time GPS tracking, big data, dynamic scheduling and data driven planning into their supply chain for competitive advantage.

Lack of well-thought strategy and clear vision

A manufacturing digital transformation is more than just making changes to your software stack, buying new equipment for the factory, adopting new operational rules or updating the workforce management system. Without the systematic, throughout roadmap or toolbox manufacturing companies may be uncertain about how to rollout their digital solutions, mitigate the risks or implement new approaches.

Weak collaboration with customers and suppliers

Resistance to adopting new technologies

Tried and tested approaches or techniques, traditional processes are extremely effective but create a barrier to adopting innovative solutions that catalyze serious changes on the factory floor. Such changes might be perceived by the staff as a treat to their positions and responsibilities, moreover, they may evoke anxiety and concerns. However, most redundant manual tasks can be managed by a smart digital solution which is less time consuming, high in efficiency and reduces job stress for employees.

Business processes that cannot be accomplished remotely

The greatest challenge of manufacturers lies into keeping facilities free of coronavirus and assets online at the same time. The frontline manufacturing staff cannot perform their tasks remotely. Therefore manufacturing transformation software is necessary to overcome the immediate crisis and get ready for a potentially much longer period of heightened uncertainty regarding demand and supply, and a lasting need to maintain enhanced hygiene, and maximized physical distancing.

Bearing in mind these principles, we define four maturity levels of digitalization lifecycle:

Level 1 — No Industrie 4.0 or only “ad-hoc”: On this level, there is no person assigned to manage digital transformation processes and, most importantly, no vision has been formulated regarding Industrie 4.0. As a result, there are no well-defined processes or supporting systems to prevent financial or resource overruns.

Level 2 — Departmental level (isolated silos): Simply put, digital transformation is represented as a technical, local or production problem that might be handled on a departmental level by means of minimal digitization measures. Consequently, this approach cannot provide global vision in order to coordinate and synchronise these activities to achieve the end goal. Yet, the in-house IT, production/engineering departments or custom development agencies dive deeper into digital transformation and Industrie 4.0 adoption.

Level 3 — Organizational level (cross-departmental): Digital transformation is being managed as a business problem that needs an overall, multilayered vision and integrative approach. That being said, all departments are involved in defining this vision, setting clear, ambitious targets and formulating the digital strategy.

Level 4 — Inter-organizational level (cross value chain/supply chain partners): Digital transformation appears to be a business issue, requiring to be resolved on all levels and covering the overall value/supply chain. Literally, defining the Industrie 4.0 vision, plan and strategy should bear in mind the complexity, needs and weak points of the value/supply chain partners.

The processes, best practices and use cases should be determined in a way that goes beyond the organizational borders in order to meet the ever-growing needs of customers and smooth the operational efficiency. Consequently, manufacturing companies achieve the transparency and intelligence required to enable the appropriate decision-making regarding production.

10 guiding principles of a digital transformation in manufacturing

To accelerate their digital transformation journey, manufacturers should future-proof their Industry 4.0 strategy or they might be at risk falling behind their competitors.

1. Scaling up:

• Analysis of value chain and product planning
• Elicit customer requirements and industry trends
• Sketch existing business model and its gaps to fill in

2. Discover:

• Establish scope and pace, set objectives and targets
• Prioritize business model dimensions

3. Define:

• Evaluate future business models in terms of best practices
• Appoint an effective launch team
• Determine must-have options and collect its best combinations

4. Deliver:

• Finalize and adopt the digital business model
• Ensure value and goals are captured

Rebuild, redesigned and reborn for COVID-19 realia

Once we’ve embarked on digital transformation, it’s time to optimize and digitize our assets, visualize our manufacturing data in real-time, and measure the success of our KPI’s using the roadmap you’ve issued beforehand.

Pandemic will definitely drive serious changes in every segment within the manufacturing industry, besides you can benefit from using this advanced data to begin applying predictive and preventative models to the processes and furthering your optimization efforts.

To generate the most ROI from your operations try to virtualize these efforts into an integrated manufacturing system framework and prioritize digital innovation as a new normal.

The enterprise software guarantees the interoperability between all digital factory tools to solve any real time problems as they arise, and finally link design, engineering, manufacturing, supply chain, distribution and services into one intelligent automated solution that can be used to self-improve both products and processes within the manufacturing company.