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The Benefits of Digital Transformation in Manufacturing

April 19, 2023
min read
Dylan Sharek

Digital transformation (DX) is rapidly impacting and changing the manufacturing industry, with new technologies representing a significant opportunity for manufacturers to improve productivity and efficiency. As a result, organizations are in a race to digitally transform.

Digital Transformation in the Manufacturing Sector 

Digital transformation refers to the broad strategy of implementing digital technology to combat industry challenges and foster new disruptive opportunities. This digital adoption is highly prevalent across industries today and the manufacturing sector is no exception. 

DX in manufacturing involves the introduction of new technology to improve all aspects of the manufacturing process specifically — from reducing costs and streamlining the supply chain to speeding up process times and improving output quality. 

Taking a Closer Look at the Factors Behind Accelerated Digitization

The digital transformation journey is becoming a key element in staying on top of digital innovation in the industry and maintaining a competitive advantage. According to a report from Forrester Consulting, more than 90% of manufacturing leaders today believe that a digital transformation strategy is important for the company’s success. 

With more and more manufacturers projected to accelerate their digital business transformation, several key factors are driving these changes: 

  1. Combating industry challenges: In 2023, the manufacturing industry is expected to face skilled labor shortages, data security challenges, continued supply chain disruptions, and economic uncertainty — not to mention increasing consumer expectations and recruitment and retention issues. Gartner research shows that 80% of manufacturing CEOs are increasing digital technology to counter economic pressures including talent shortages, inflation, and supply constraints. 
  2. Changing customer demands: Customer expectations are rising, and it’s a compelling factor for organizations to take on digital transformation initiatives. Manufacturers are leveraging digital tools to boost the quality, traceability, and customization of both products and the customer journey to better meet changing needs. 
  3. Growing competition among peers: A Digital Business Study from Foundry discovered that 89% of all companies have already adopted a digital-first business model or are planning to do so. This means fierce market competition is only anticipated to apply more pressure as competitors introduce new technologies. As a result, companies are taking on digitalization to differentiate products and services, drive efficiency, and remain competitive. 
  4. Increasing regulatory requirements: Governments are continuously introducing new regulations spanning industries that are aimed at anything from increasing sustainability to improving worker safety. Digital technologies can help manufacturers stay compliant with changing regulations by increasing visibility and control, enabling eco-friendly practices, and reducing the risk of errors or accidents along the way. 
  5. Improving processes: A simple yet significant factor behind technological adoption is to improve internal processes and innovation, while collecting valuable data in the process. Organizations in the manufacturing industry are leveraging digital technologies to maintain efficient processes for production and distribution to boost long-term productivity and output. 

Let’s take a closer look at what technologies teams are taking advantage of and how they’re using them to boost their processes. 

6 Examples of Digitization in Modern Manufacturing

The International Data Corporation reports that global spending on digital transformation efforts among companies in discrete or process manufacturing industries is projected to total more than $816 billion by 2025. But, with major global investments anticipated in the next few years, what does this digitization look like for manufacturers? 

Here are just a few examples of how teams across the sector are approaching transformation:

1. Industrial Internet of Things (IoT)

IoT sensors measure and monitor industrial processes to provide real-time data to maintenance staff. Teams are taking advantage of around-the-clock “eyes” across their factory floors to improve visibility for machine performance and eliminate wasted time and resources. Possible applications for industrial IoT sensors include overseeing plant operations and equipment, managing inventory, and predictive equipment maintenance. 

2. Big data and analytics tools

Increasing and interconnected devices in manufacturing help companies generate and collect massive amounts of big data. And with data analytics tools, teams are turning this data into actionable insights that can be used to support a range of business operations including inventory optimization, predictive maintenance, production and demand forecasting, and order management. 

3. Cloud-based solutions and other manufacturing software

Cloud technology has been well-received in the light industrial and manufacturing sector, helping teams facilitate better communication, inventory tracking, and product life cycle management. Manufacturers are making use of an array of cloud-based solutions, from enterprise resource planning (ERP) to general manufacturing software, to easily and securely store large amounts of data, drive efficiency and streamline operations. 

4. Additive manufacturing

Also known as 3D printing in factory settings, additive manufacturing is the process of creating products from digital data using lasers. This transformative technology allows for the specialized production of customized products and components. For example, major car manufacturers and automotive designers are taking advantage of these tools to quickly construct a prototype of a physical part such as a gear stick or the interior elements of a dashboard. 

5. Artificial intelligence (AI), automation, and machine learning (ML) 

Manufacturers are optimizing their use of AI, automation, and ML to foster streamlined processes while ensuring safety. And these powerful tools can be used in different, personalized ways for the best results. Companies are introducing AI systems to manage inventory needs and identify industry supply chain bottlenecks, for example. Automation and ML, for instance, can be used to facilitate scheduling and data reporting, and even improve workplace safety by handling potentially risky tasks.

6. Augmented reality (AR) and virtual reality (VR)

Organizations across the industry are leveraging VR and AR technology to transform the manufacturing experience and drive efficiency. For example, manufacturing and logistics workers can use AR glasses in warehouse operations to access digital packing lists or make use of AR devices to detect item damages and maximize freight loading space. 

The Key Advantages of Digital Transformation 

Companies across the manufacturing sector will require unique digitalization efforts to address individual issues. But, no matter what digital solutions are introduced, teams stand to reap major advantages as a result. Some of the most prominent benefits of digital transformation include:

  • Increased operational efficiency: By leaving traditional, manual processes behind and opting for supportive digital technology, such as automation, artificial intelligence, or machine learning, manufacturers can streamline processes and mitigate human error — driving long-term operational efficiency. 
  • Improved sustainability: Emerging tools enable organizations to track and manage resources, optimize processes, and reduce waste. Because the DX process supports greater efficiency through advanced analytics, automation, and IoT technologies, companies can encourage sustainability initiatives.
  • Reduced costs: Digital solutions for manufacturers provide valuable insight into business operations that lead to significant cost savings. With the IoT and connected machinery, organizational leaders are better equipped to address issues early on and improve data-driven decision-making, all while reducing downtime and waste. 
  • Greater customer satisfaction: Customer expectations are higher than ever, with personalization becoming a key element in meeting these changing needs. According to a trends report from Zendesk, 80% of individuals said they would switch to a competitor after one bad customer experience. Taking advantage of digital innovation allows manufacturing companies to introduce agility and customization to improve the customer experience and foster a more consumer-centric business moving forward. 
  • Upgraded resiliency and adaptability: With disruptions and industry challenges projected to continue, DX can provide organizations with the resources and support they need to survive in the modern manufacturing landscape. Digital strategies that allow teams to react swiftly to changing conditions boost organizational resilience and agility. 

Creating a Strong Digital Transformation Strategy in 2023 

Before an organization can implement digital solutions or experience their benefits, they need a clear DX strategy in place. A comprehensive, established plan of action will be the foundation for taking on digital adoption effectively. 

Follow these critical steps to successfully develop and execute your strategy for introducing new digital tools and resources:

  1. Identify your business needs and goals to align to the purpose of your digital transformation, and build a strategy from there.
  2. Ensure organizational leaders and other C-suite executives are preparing teams for cultural transformation to minimize resistance and skepticism to digital change. 
  3. Prioritize small, strategic technological initiatives to set the stage for future efforts and improve buy-in from key stakeholders.
  4. Develop a clear roadmap for implementing technology as a tool to reach desired and defined business results — comprising any combination of DX technologies that offer the needed support.
  5. Strengthen transformation strategies and core processes with dependable partners that offer expertise and resources that accelerate outcomes and drive initiatives forward. 
  6. Define key performance indicators for your digital efforts and create a strong feedback loop with stakeholders, so you can continuously evaluate and adjust your strategy as needed.
  7. Continue to monitor your unique digital transformation journey and consider opportunities to scale your approach to support long-term business growth. 

Long-lasting success will require teams to go beyond the hype of emerging technologies and devise future-ready strategies to manage business transformation and capitalize on opportunities. This includes workforce solutions that can support your plans for digital adoption. 

When it comes to solving workforce challenges and developing digital-first approaches, Bluecrew can help. Bluecrew’s powerful platform technology gives your organization access to our qualified, W-2 workforce-as-a-service, making it easier for your business to navigate change and stay at peak performance. Our all-in-one solution handles everything from recruiting and onboarding to time tracking, payroll, and compliance, so you can focus on your digital transformation.

Ready for a workforce-as-a-service solution that provides powerful control and supports your digital transformation strategy? Contact Bluecrew today to learn more and get started. 

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