- 92% of all manufacturers say they are either on the same level as or ahead of their peers when it comes to Digital Manufacturing.
- 68% of manufacturers are making Digital Manufacturing their highest priority today.
- Analytics for quality management and inventory optimization are the pilots most likely to progress to production rollouts.
These and many other insights are from McKinsey’s latest study on digital manufacturing’s adoption, How Digital Manufacturing Can Escape ‘Pilot Purgatory.’ You can download the report here (PDF, 24 pp., no opt-in). The study is based on over 700 respondents from companies with more than 50 employees and over $10M in revenues, spanning a range of industry sectors from automotive to chemicals to transport and logistics. McKinsey’s research goals for the study include analyzing the impact of strategy, key solutions, and implementation approaches to implementing digital manufacturing across seven key markets (Brazil, China, France, Germany, India, Japan, and the USA). For additional details on the methodology, please see page 7 of the study accessible here online or download the PDF here.
Key takeaways from the digital manufacturing study
- Globally 92% of manufacturers say they are either on the same level as or ahead of their peers when it comes to Digital Manufacturing with Chinese manufacturers leading all others in estimated readiness. McKinsey found that nearly all manufacturers globally consider themselves at parity or ahead of their competitors when it comes to capitalizing on the benefits of Digital Manufacturing. 27% of Japanese manufacturers perceive themselves behind competitors as they don’t consider digital manufacturing as high a priority as manufacturers from other nations do.
- 68% of manufacturers are making Digital Manufacturing their highest priority today. Indian and Chinese manufacturers are leading all nations included in the study. These nations and others ranking high in the survey have manufacturers leading industrial automation, software, consumer goods, transportation and logistics, and chemicals industries.
- 87% of manufacturers consider Analytics, Business Intelligence (BI) and prediction models as the most valuable, relevant area of Digital Manufacturing today. McKinsey found that the success of Digital Manufacturing strategies is predicated on adoption of Connectivity, Intelligence, and Flexible Automation. Of these, Intelligence gained from analytics, BI, prediction models and the real-time monitoring technologies provide data needed to enable digital manufacturing strategies and track performance gains they make possible.
- Analytics for quality management and inventory optimization are the pilots with the highest probability of progressing to production rollouts. McKinsey finds that one of the primary catalysts propelling Digital Manufacturing technologies beyond the pilot phase is their ability to provide real-time data on improving product quality and streamlining inventory optimization. The majority of manufacturers are in an experimentation phase with an average of 8 pilots running simultaneously as the graphic below shows. The majority of Digital Manufacturing pilots in progress today are in Manufacturing Intelligence. Inventory optimization is the most successful type of Flexible Automation pilot. The graphic below compares how many different Digital Manufacturing pilots are in progress by country by Digital Manufacturing sectors of Connectivity, Intelligence, and Flexible Automation.
- Industrial Automation and Software lead all other industries in the number of Digital Manufacturing pilots and rollouts achieved. The average number of pilots in progress across 12 industries included in the study is 66% and 25% in the rollout phase. The more technologically advanced the industry, the greater the number of the pilots and a higher probability of them turning into rollouts. Older, more established industries with ingrained supply chain and production processes resist change and have the lowest number of pilots
- Real-time monitoring is a pivotal technology for enabling Digital Manufacturing, with 72% of manufacturers considering it very/extremely important for streamlining and making inventory reconciliation more efficient. Manufacturers are implementing real-time monitoring to improve production tracking accuracy, machine utilization including scrap and downtime reporting and follow jobs through scheduling to production and fulfillment. The graphic below is from our most recent IQMS Manufacturer’s Survey based on interviews with 151 manufacturers recently. Below are the top ten areas where real-time monitoring is predicted to make the greatest contributions in the next 12 months.