How To Achieve A Successful Digital Transformation In Manufacturing

How To Achieve A Successful Digital Transformation In Manufacturing

Bottom Line: To achieve lasting success with any digital transformation strategy, manufacturers must put employees first then selectively focus on technologies that enable every member of their team to excel and stay connected.

The greatest productivity gains in manufacturing happen when digital transformation strategies put the health and safety of workers first. There’s the risk that focusing too much on technology alone won’t solve the innate productivity roadblocks holding workers back from achieving more. It’s the manufacturers putting workers first and making sure they’re equipped with the best possible tools to communicate, collaborate, stay connected, and excel that are succeeding at digital transformation today.

Getting The Cornerstones Of Digital Transformation Right

Digitally transforming any manufacturing business needs to be built on the following three cornerstones to be successful:

  • Excel on every aspect of protecting employees’ health and welfare, including providing them an opportunity to expand the scope of their jobs for greater enrichment. Look at social distancing guidelines as an opportunity for every factory employee to achieve more autonomy and ownership of their job.
  • Increase spending on training and development to keep current employees’ skill sets current. This needs to be done while educating the next generation of its supply chain, production, quality, and manufacturing execution leaders.
  • Doubling down on the latest technologies enables workers to be more connected and productive if they’re working in the plant or remotely. Key technologies manufacturers are relying on to transform themselves include the following digitally:
  • Remote ERP access is proving indispensable and continues to provide connected workers with the access they need to keep working safely. 
  • Having ERP and Manufacturing Execution Systems (MES) on a single integrated platform provides greater visibility and control across every manufacturing phase, often including real-time monitoring, automation, production reporting, and shop floor scheduling.
  • More intuitive, touchscreen-based shop floor interfaces to ERP systems improve production efficiency with configurable Work Center dashboards.  Key benefits of this new class of interface include streamlining data access and real-time information collection and availability, improving quality, and reducing costs. New intuitive user interfaces also help digitize manufacturing operations and improve production efficiency.
  • Digital workflows that capitalize on the strengths of touchscreen-based shop floor interfaces guide workers through complex tasks, preventing the most common types of human errors.
  • Real-time analytics will provide associates the information they need to spend more time on creative problem solving to improve production throughput and quality.
  • Smarter, better sensors and interfaces blur the line between worker and system, improving everything from efficiency to health and safety.
  • Digital training tools will reduce training time by as much as 75%, further increasing the expertise and knowledge of production team members across locations, according to the World Economic Forum.

Recommended Steps To Creating Digital Transformation Roadmap

All manufacturers are in a race to digitally transform themselves to become more resilient while looking for new ways to gain customers while reducing costs. KPMG’s Global Manufacturing Outlook provides insights into how the pandemic is accelerating manufacturers’ digital transformation efforts based on an interview with industrial manufacturing CEOs. The following are key takeaways from KPMG’s Global Manufacturing Outlook:

  • 48% of industrial manufacturing CEOs say the pandemic accelerated their digital transformation strategies by years.
  • 86% say remote working has initiated big changes in how they’ve chosen to nurture their corporate culture.
  • 79% say the pandemic has shifted to focus inside their manufacturing operations to social needs.
  • Supply chains (24%), operations, and supply of talent (both 17%) are the three greatest risks industrial manufacturing CEOs are most concerned with today.

The following are the most valuable lessons learned from manufacturers pursuing a digital transformation strategy today. Consider the following as the most valuable lessons learned from their experiences, serving as cornerstones of how to define, develop and keep digitally improving manufacturing operations:

  • The ability to shift quickly from one manufacturing process to another and manufacture new products in days is a much sought-after strength that digital transformation initiatives value most. The agility to switch from one manufacturing approach or strategy to another with minimal downtime is essential for manufacturers to transform their operations and excel for customers first digitally. ERP systems that support pre-built manufacturing processes are becoming necessary as manufacturers look to gain more short-notice production runs across a broader customer base while launching new products of their own.
  • The need to achieve greater business continuity in the face of uncertainty translates into the manufacturer’s urgency to gain greater financial visibility across manufacturing operations, helping to streamline their digitial transformation efforts further.  Knowing how stable sales, revenue, and production forecasts drive manufacturers to adopt more finely tuned financial reporting systems. They’re setting the ambitious goal of excelling at revenue and cost management with challenging new targets for their teams to achieve. Knowing with greater certainty how manufacturing operations’ variations impact financial statements is the cornerstone they’ll need to measure digital transformation initiatives and programs’ progress and results.  
  • Lessons learned from taking on those challenges also underscore how invaluable real-time visibility into every production phase is. Real-time process and production monitoring providing invaluable data from the shop floor to ERP, Manufacturing Execution System (MES), Quality Management System (QMS), and Warehouse Management System (WMS) all running on a single database is the heart of any digital transformation strategy today.
  • Real-time production and process monitoring help keep digital transformation strategies on track by providing real-time consumption, quality, and production efficiency. Manufacturers pursuing digital transformation strategies are increasing their real-time process and production monitoring to assess and reduce risk. They’ll rely on the insights gained from these systems as an early-warning system of factors that could impact revenue and margins. Knowing that every machine, process, and system is operating and stable brings greater stability to production and revenue forecasts and, ultimately, financial results.
  • Smart machines provide data-driven insights not available before, helping to keep digital transformation strategies on track. The best defense against any price war isn’t to keep lowering prices and giving away margins. It’s digitally transforming production lines with smarter machines that can get more done in less time and self-report their health and need for maintenance. In the era of connected workers and digital transformation efforts across manufacturers, smart machines are among the best defenses against the onslaught of price wars when manufacturers compete on price instead of innovation.
  • Tier 1 suppliers are rewarding suppliers who have made track-and-trace and supply chain visibility integral to their digital transformation strategies as they’re helping to reduce the risk of health-related interruptions to production. Providing proof that inbound supplier shipments to a manufacturing facility are clean, Covid-19 free, and in compliance with health and safety regulations is a competitive strength every manufacturer wants to achieve. Tier 1 suppliers, including major automotive companies, are reshoring their supply chains and working with manufacturers on anticipated audit, health, and safety requirements.
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This article was written by

Louis is currently serving as Principal, IQMS. Previous positions include Director Product Management at Ingram Cloud, Vice President Marketing at iBASEt, Plex Systems, Senior Analyst at AMR Research (now Gartner), marketing and business development at SaaS start-ups. Mr. Columbus’ academic background includes an MBA from Pepperdine University and the Strategic Marketing Management and Digital Marketing Programs at Stanford University Graduate School of Business. Louis also teaches MBA courses in international business, global competitive strategies, international market research, strategic planning and market research. Mr. Columbus currently is a member of the faculty at Webster University and has taught California State University, Fullerton: University of California, Irvine & Marymount University.