Digitalization: A Revolution in the Manufacturing Industry

By Nikki Johnson

Digitalization has emerged as a potential game changer for manufacturers. According to an IDC survey, highest IT investments in the Manufacturing Industry are made in Cloud Computing, Cybersecurity, business intelligence, and analytics. This is followed by investments in the supply chain management, consolidation of infrastructure, and application modernization.

Smart and connected plants, products, and operations ensure the prospective for an increase in productivity and revenue and reduction in costs. Hence, CEOs and CTOs in the manufacturing industry are prioritizing the strategic importance of digitalization.

The challenges and priorities of manufacturing industry:

Manufacturing industry today is facing global competition in several areas like customer service, enterprise quality, and product-enabled services. There is significant competition, in several other aspects too, whether it is about finding new markets, keeping compliance with the regulations, maintaining Cybersecurity and safety, or handling mergers and acquisitions.
Significant investments in IT are therefore made to increase productivity and revenue, optimize business processes, decrease costs, and to introduce innovative products and services. Some major investments are also made towards improving customer acquisition and retention, improving customer experience and dealer experience, etc. There is also a pressing need of extended customer experience, mass customization, and the need to provide the product as a service.

Aspects of digital transformation in manufacturing industry

In the manufacturing industries, the investments for digital transformation are majorly being done on the following aspects:

• Big data and predictive analytics
• Social and collaboration tools
• Mobile devices and Smart Business applications
• Cloud and accessing IT resources as a service
• Internet of Things (IoT)
• Next-generation cyber security
• Application modernization
• Infrastructure modernization
• Artificial Intelligence

Changes in business models:

The initiatives in digital transformation are directed to ensure that data/information is transformed into an asset. Here are a few changes taking place in the manufacturing business models by digitalization:

• Collaborative ecosystems: There is a major impact on the way manufacturers share ideas and work together with partners along the value chain, from shop floor operations to R&D and design, and even to the use of products by customers.

• Critical insight for right decisions: Due to real-time analysis of massive data streams, manufacturers are able to get a unique insight into upstream and downstream processes along the value chain. This enables them to anticipate and respond to changes and make the right decisions to ensure profit margins are enhanced.

• Embedded intelligence: Manufacturers can grow their business, by providing their high-value products with communication capabilities and embedded software. For example, they can facilitate customers to configure products for their definite needs via a standard web interface and monitor operating parameters during the product lifecycle. Digitally enabled products, support manufacturers to improvise the customer experience, thus making their position strong in the marketplace.

• The benefit of smart, connected products: Smart and connected products are able to establish their own maintenance schedule. They can even initiate their replacement at the right time to avoid costly outages. Adding digital capabilities to products presents exceptional opportunities for manufacturers to boost customer value and hone their competitive edge.

• Inventory Management: Inventory management becomes more reliant as advanced computer analytics systems manage inventory in real time. This reduces chances of theft, damages, and errors during shipping, lessening overhead and improvising on operations. Moreover, companies will be able to take care of warehouses more efficiently. Innovative technologies, including 3D printing, will make customization of inventory needs easier.

Here is an example of how an Enterprise Mobile App Development platform helped in increasing productivity. The Detroit-based company, PTI QCS streamlined all of the processes driving productivity gains. Here is the case study...

Digital transformation is multidimensional:

Multidimensional digital transformation facilitates manufacturers to adapt to business challenges. Here it is explained how:

• Leadership: Business leaders like CEO, CTO and COO need to be at the helm of their organization’s long-term strategic objectives. Digitalization facilitates better governance in creating a digital investment strategy for IT integration into products, processes, and services.
• Customer Experience: Understanding customer requirements and innovating based on known and unknown requirement shapes manufacturing value chains. Digitalization helps in improving manufacturers’ engagement with customers through product and service innovation. It helps in maintaining quality standards and meeting the market demand and supply in time.
• Operating Model: Digital transformation will set a revolution by connecting assets, products, and services. Connected machines — the primary components of the Internet of Things (IoT) — will be the backbone of industry in the near future, and industrial manufacturers will have to find out how to manage the data coming from several sensors, integrated equipment and platforms, and faster information processing systems. With the use of this information, equipment performance will improve drastically and new revenue streams will open.

A key to distinction for manufacturers has been their single-minded focus on incremental improvements, reliability, and close relationships with customers. However, in this era, the competition has turned digital, and there isn’t time for anything except digital transformation. If you have yet not embarked on the journey, you are already falling behind.
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