Why Digital Transformation in Manufacturing Is Imperative

Written By: Taylor Paglia
  • 8/20/2020
  • Read Time : 5 min
Digital Transformation in Manufacturing 900-450

There is a saying that “the only constant in life is change.” While change for some industries can be intimidating and unwanted, it is safe to say that the digital landscape for manufacturers is constantly changing, and it is no longer an option to ignore the disruption. 

The impetus for manufacturing companies to digitally transform seems to be increasing at a rapid pace. Research from IDC cites global spending on digital transformation technologies and services is forecasted to grow 10.4 percent in 2020, to $1.3 trillion. In 2020, the disruption of COVID-19 has expedited change for a lot of organizations, as many were under prepared for the massive workforce shift. 

While the prediction is notably less than the 17.9 percent growth in 2019, digital transformation remains to be one of the driving forces in a year that otherwise has seen dramatic decreases in overall technology spending.

What is Digital Transformation in Manufacturing? 

Digital transformation (DX) is a broad business strategy, applicable across all industries, to solve traditional business challenges and create new opportunities through the use of technology. It requires acceptance of entirely new ways of working and delivering value to customers. 

For manufacturers, digital transformation enables measurable business goals, including smart operational cost reduction, the ability to unlock opportunities that support new revenue growth and improved asset efficiency. 

As PTC’s President and CEO Jim Heppelmann explains, “To compete and succeed today, companies need to stop viewing change as a place, or an outcome that can be achieved. Instead, companies and their employees need to embrace a constant pace of change. From a place, to a pace.” 

In the coming months and years, we will see the continuation of digital transformation accelerated by consumer expectations, increased competition, the influx of available data, and the exponential growth of connected devices. To keep pace with the change, let’s take a look at why digital transformation is now imperative for the manufacturing industry. 

Embrace the Disruption or Be Disrupted 

Customer expectations and resolving pain points are still main drivers for digital transformation among manufacturers. Digital transformation presents the opportunity to revolutionize operations and improve speed and efficiency, to better the customer experience, increase production and decrease cost and downtime. With the forcing function of the COVID-19 pandemic, manufacturers have had to narrow their focus on what’s important –providing value to customers and financing projects with measurable impact. 

At the core of the “new normal,” error-free operations and improved processes are top of mind, but the reality is, things can and will go wrong. Machines break. Humans make mistakes. 

One of the key initiatives for manufacturers’ digital transformation strategy is enabling real-time insights to help monitor, address, and even predict any issues before they become major failures that can cost valuable time and money. 

Recognizing the Beauty in the Beast – Your Massive Amounts of Data 


Who doesn’t want more, right? When it comes to data, more doesn’t always mean merrier. According to Forbes, manufacturers are achieving only 40 percent of their potential because they are spending too much of their time manually updating inventory control, production reporting, and pricing reports.

Enter the solution – the Industrial Internet of Things (IIoT) connects people, products, and processes to power digital transformation, and act on data in new ways. This allows organization to unlock their potential and access, analyze, and monetize the data that seamlessly flows between their connected devices and across the enterprise. in many cases, manufacturers are achieving double-digit impact on KPIs like factory output, inventory levels, and lead time. 

The cornerstone of digital transformation initiatives can be unlocked by using a proven industrial IoT platform. An established platform offers several advantages, such as:

  • Reducing operational and service costs 
  • Improve asset and service efficiency 
  • Support revenue growth 
  • Improve customer satisfaction 

By keeping data in check, manufacturing companies can leverage the available information to generate important new insights related to their digital transformation initiatives and use this as a competitive weapon. 

Be Better Together with Your Customers 

What is interesting about digital transformation is that while a lot of the work is within the four walls of the organization, customers must equally be as accepting of the new ways of working and the change in the delivery of value. Organizations across the globe are recognizing that customer-centricity is fundamental to their digital transformation strategies, and a critical element to effectively compete in their marketplace. 

Customer experience isn’t a one-off practice – it is a fundamental shift in the business. Take this research for example, Gartner has found that more than two-thirds of companies now compete primarily on the basis of customer experience. It is that important. 

Communicating with your customers to ensure they are seeing, feeling, and leveraging the value of digital transformation is an effective way to keep churn low, and wandering eyes off the competition. 

 

Final Thoughts 

As referenced in the Manufacturing Leadership Council, it is possible to overcome the obstacles and unlock transformational value with speed and scale. Whether a digital transformation journey was on the table for this year or not, 2020 has taught us that a change in course at any point is possible, and the world moves forward. 

While change may be daunting at the onset, manufacturers who scale up and take inspiration from past industrial revolutions by embracing change and make a difference will surpass those who risk being part of the downfall. 

digital-manufacturing-solutions

Tags:
  • Industrial Internet of Things
  • Industrial Equipment
  • Digital Transformation

About the Author

Taylor Paglia

Taylor Paglia is a corporate communications specialist, supporting PTC through content development, thought leadership initiatives, and influencer relations. Previously, Taylor worked at a public relations agency, driving her clients internal and external communication plans.