How important is the manufacturing industry for the economic growth of a country? Did you know that throughout history, it played a key role in the growth of every industrialized country in the world?

In fact, manufacturing is the fuel that extends the rise of a country’s economic growth. The manufacturing industry contributes to over 18% of the global GDP. This indicates the significance of the sector in a country’s economy.

Digital transformation in the manufacturing industry is a necessity that must be adopted to stay competitive and sustainable in the changing business environment. And the manufacturing industry is all set to take this giant leap and exploit the benefits of digital transformation. From production, management, supply chain to assets and safety lifecycles, every aspect of a manufacturing process can be improved with digital transformation.

So, where are we in terms of digital transformation in the manufacturing industry? What are the challenges present? What are the benefits? Want to know more about these? Here we go!

What is Digital Transformation in the Manufacturing Industry Today?

We know the manufacturing industry is a broad field with companies of all scales-small, medium, and large- and with diverse end-users, like industrial partners, businesses, or direct customers. The thing with digital transformation is that irrespective of the size or goals of the companies, it is best suited for all.

Digital transformation is not technology for the sake of technology, but rather the use of technology to accelerate the business strategy of organizations. So what drives digital transformation? Is it technological trends or competition in the market? No. The driving factor behind digital transformation is the customer. It is towards meeting customer expectations and solving their pain points that digital transformation travels.

In the manufacturing industry, though we can already see changes, there is scope for a lot more. More of what we witness today is the execution of digitization in individual or selected business areas. If we are looking at the implementation of a company-wide strategy for digital transformation in the manufacturing industry, we are not even halfway there.

But the time is ripe, and the developments that are happening in this sector are promising. We cannot unsee the transformation initiatives such as the use of CRM and ERP platforms for data management, IoT services for improved connectivity, and cloud for better storage. The sector is open to experimenting with AI, ML, 5G, and all other disruptive technologies that are making their way to the business ecosystem.

What are the Challenges of Digital Transformation in Manufacturing?

Challenges and growth go hand in hand. Whenever you venture into a new path, you will inevitably come across challenges. The challenges of digital transformation in manufacturing is what keeps most companies from taking the plunge. But rather than seeing them as obstacles, if you look at them as stepping stones, you will be able to achieve real change.

Let’s discuss some of the most commonly faced challenges.

  • Digital transformation might come off as a groundbreaking step. This creates a reluctance on the part of manufacturers and employees. Concerns about its effect on human resources, shift in communication processes, and the workplace environment difference often poses a hurdle for the change.
  • Since the manufacturing industry is highly unpredictable, the need for efficiency and cash sensitivity is very high. So they are very stringent on budget concerns. The budget requirements are carefully scrutinized, which leads to several reservations and limitations in the digital transformation strategy.
  • Implementation of digital transformation strategies are expensive, and the results can’t often be reaped in the short term. Shareholders or partners expect fast results on large scale investments, hence the long term benefit strategy often fails to gain the support of stakeholders.
  • Digital transformation is not just digitization, but digitization plays a significant role in it. Thus it will create some demand for the manufacturing organization’s IT department. Innovations in digital performance, such as new technology stacks, processes, platforms, etc., will have to be implemented, which might not be welcomed equally by all.
  • Most organizations have a legacy system in place, which often restricts their operations. Although replacing the legacy business model will result in faster and more efficient operations, coming out of the comfort zone offered by them is very challenging for most businesses.

Even though the digital transformation in the manufacturing industry poses several challenges, the results are incredible. And it does not have to be a one-man-show. Expert digital transformation consulting services can assist you in your transformation journey and help you rewrite the journey of your manufacturing company.

What Are the Benefits of Digital Transformation in Manufacturing?

Digital transformation in manufacturing is an innovative approach that builds on traditional manufacturing methods and enhances them with the aid of technology. Its aim is to drive the manufacturing industry forward by increasing efficiency and improving the relationship between everyone involved in the processes.

The benefits offered by digital transformation are endless. Here we will take a look at the most relevant ones.

  • Improved collaboration and communication

It enhances the overall communication and collaboration of an organization- both external as well as internal. Employees between different departments and on different levels can easily work together, resulting in overall increased output.

  • Increased efficiency

Manual processes are slow, prone to errors, and often needs rework. The switch to digital will result in fast, accurate, and reliable outcomes with the least human intervention.

  • More productivity

When mundane tasks are automated, it gives employees time to focus more on processes that require human effort. So they can pay attention to core areas that need them to apply their skills, thus leading to an increase in the overall productivity.

  • Encourages innovation

With accessibility to the state of the art technology and improved working processes, the possibility of exploration and innovation becomes vast. Organizations can easily keep up with trends and create innovative strategies to enhance their business goals.

  • Reduces cost

Digital transformation helps manufacturers make better decisions and use their time, effort, and resources more efficiently. As a result, there is a decrease in unnecessary expenses, leading to an overall reduction in cost.

  • Enhanced agility

Manufacturing is a fast-changing industry with a lot of competition. Embracing digital transformation enables it to quickly adapt to new changes or potential challenges in the market. It helps to make operations more flexible and responsive.

It also has several other benefits, such as creating new business opportunities and improving selling strategies, marketing time, etc. Digital transformation in the manufacturing industry is a necessity to reap the best out of today’s opportunities to create a better tomorrow.

Examples of Digital Transformation in Manufacturing

How about we look at some of the real-life examples of manufacturing organizations that implemented digital transformation to enhance their operations? Feeling curious? Read on!

1. Bosch

By combining IIoT and big data, Bosch implemented a strategy to connect and monitor machineries, centrally enabling them to predict bottlenecks in operations or equipment failures. It resulted in a 10% increase in output, improved equipment life, and enhanced delivery.

2. Whirlpool

Whirlpool implemented Product Lifecycle Management to help them improve the efficiency of their products and reduce product complexity. Utilizing technologies like digital twin, Whirlpool tests new product concepts and features. This increases market delivery time for new products and accelerates innovation.

3. Volkswagen

Partnering with Microsoft to develop “Volkswagen Automotive Cloud,” they have stepped into the realm of connected cars. With features like smart home connectivity, PDA, predictive maintenance service, etc., they are gearing up to take a revolutionary stride in the automotive industry.

4. Volvo Group

This leading manufacturer of buses, trucks, and construction equipment developed a digital transformation strategy to improve the agility and efficiency of their manufacturing process. By creating a digital thread that connected multiple business areas like design, manufacturing, and quality control, they could meet customer needs and configure custom products.

5. DHL

DHL has implemented Fetch Autonomous Mobile Robots(AMR) to perform inventory moving in some of their warehouses. These AMRs perform pick and place operations autonomously by correlating the most efficient paths for moving. The results? 50% reduction in order cycle time and two times increase in productivity gain!

Top 10 Digital Transformation Trends in Manufacturing

Digital transformation is not a solid strategy but rather a work in progress. Although it requires laying a digital foundation, the structure that will be built on it depends on the particular sector and the trends that are ruling the sector. So let us take a look at the top 10 digital transformation trends in the manufacturing industry.

1. Digital twins

A report by Gartner predicts that by 2021, 50% of organizations in the manufacturing industry will be employing digital twins to monitor and manage their equipments. Digital twins mean a virtual representation of a real-life system, which can be analyzed to inspect the system without direct intervention.

This enables manufacturers to predict issues and take proactive measures to address them. It can also be used to perform diagnosis, predict the life cycle of equipments, and test equipment’s response to hypothetical scenarios.

2. Edge computing

The exponential growth of IoT devices has led to the generation of enormous amounts of data. Storing all of that at a central point tends to be very costly and also create latency issues.

Edge computing aims to solve this problem by bringing the data storage and computation close to the source device, that is, at the edge. This helps in optimizing processes, improving performance, and saving money. The top priority data could further be transmitted to the cloud for more analysis if needed.

3. Automation

The manufacturing industry is ranked the second largest industry with the most potential for automation. Bringing automation in data collection and processing will result in increased production efficiency and consistent and quality service. It will further help to save labor and reduce operational costs. Automation is a major digital transformation trend being carried out by several industries.

4. Industrial Internet of Things (IIOT)

The IIoT in the manufacturing industry is expected to reach a value of $994B by 2023. IIoT is a subset of IoT, which is essentially a network of interconnected devices like sensors, radio frequency identification tags, software integrated with machines, etc. It is used to collect real-time information about the processes and conditions of machineries. It finds applications in asset monitoring, tracking, preventive maintenance, and real-time field assistance.

5. Digital thread

The digital thread is used to improve connectivity across different phases of a project like design, development, operation, and maintenance. It acts as a common thread that is present from planning to post-release maintenance, with an aim to give access to the right data whenever anyone needs it. Digital thread creates a link between the manufacturer and customers, making manufacturing act as a service solution.

6. Advanced Robotics

Robots are not new to the manufacturing industry. But with the disruptive technologies prevalent today, Robotics is under ongoing innovation. Advanced robotics will witness robots powered by cutting edge softwares and sensors, and which can collaborate with the humans and environment to perform their tasks. It frees humans from repetitive and risky tasks and increases productivity and quality.

7. Big Data and Analytics

Big data and analytics is revolutionizing industries worldwide, and the manufacturing industry is no exception. By collecting large volumes of data from IIoT devices and analyzing them into legible information, it opens a useful dimension of actionable insights. These data help manufacturers to optimize processes based on their effect on yield and also helps in predictive maintenance and analytics.

8. Self Healing Systems

What is better than proactive maintenance? Systems that can solve their problems on their own! Self-healing systems are advanced machineries that understand when something is going wrong and perform a fix independently. They take a large amount of workload off humans through actions such as placing an order for a damaged part or scheduling maintenance.

9. AI and ML

The manufacturing industry is already reaping the benefits of AI and ML. The application of AI in the supply chain has helped improve processing and deliver efficient and sustainable solutions. Machine learning is making applications more efficient and accurate, thereby helping to optimize manufacturing processes. AI and ML help manufacturers to incrementally improve their decision making and lead to significant cost savings.

10. Augmented Reality(AR)

Although digital transformation in healthcare, ecommerce, etc., are already using AR, the manufacturing sector is only beginning to get acquainted with this technology. AR can be used to create a link between the digital and real-world, which can help several processes such as assembling and maintenance. Utilizing AR glasses to project digital information on real systems can help facilitate fast and easy working.

Digital Transformation in the Future of Manufacturing

Industry 4.0, also called the Fourth Industrial Revolution, will define the future of the manufacturing sector. It will act as the carrier of digital transformation in the manufacturing industry. Its focus is on connectivity, communication, and automation.

It aims to shift the trend from mass-producing items to creating customized items. With the primary purpose to automate manufacturing processes, its goal is of a future where every device is interconnected and makes smart decisions through inter-device communication.

Smart manufacturing helps to propel the idea of Industry 4.0 by creating a digitally connected network in factories. It incorporates AI, ML, big data, and analytics in the manufacturing process to streamline them and meet customer requirements. Today manufacturers are growing a customer-centric mindset and ready to embrace the transformation.

How Can MindsterDX Help You With Digital Transformation in Manufacturing?

MindsterDX is a digital transformation company that provides exceptional services suited to the new-age digital economy. We have worked with several organizations across various industries to fundamentally alter their business processes and improve their business outcome.

Our RPA solutions can drive digital transformation in the manufacturing industry to improve productivity and efficiency and realign working processes. If your organization is looking for expert guidance to pilot your digital transformation efforts, contact us!