Businesses have come to associate digital transformation with innovation, progress, growth, and development. It’s the term of the day in many businesses throughout the world, and manufacturing is no exception.
Do we, however, truly comprehend what digital transformation is?
The use of new technologies to alter and reinvent enterprises is known as digital transformation.
It’s worth noting that the digital transformation process entails much more than simply deploying new technology or improving old processes.
Digital transformation in manufacturing involves integrating digital technology into every element of a company’s operations and changing how it operates.
As a result, we can conclude that it is a continuous journey for which businesses must prepare ahead of time. They’ll need a robust digital transformation plan for this.
Today, we’ll go over some key processes for developing a digital transformation strategy for the manufacturing industry. But first, let’s take a short look at the situation of digital transformation in the manufacturing industry.
The Current State of Digital Transformation in the Manufacturing Sector
Manufacturing industries throughout the world are evolving. Changing global and economic policies, as well as developing technologies such as IoT (Internet of Things), AI (Artificial Intelligence), 5G, 3D printing, predictive analytics, Big Data, and more, are driving this transition.
Many businesses have begun to go from ‘talk’ to ‘action’ in 2020. Some firms and enterprises are leading the way in terms of transformation and creating new trends, while others are taking a wait-and-see approach. Everyone appears to be on their toes in any situation.
Furthermore, with customer centricity at its foundation, evolving technologies are constantly challenging and altering the way products are manufactured, maintained, and business is performed.
Traditional industrial business models have been challenged as a result of these technological breakthroughs. Companies gain from unprecedented speed, scalability, and innovation.
Despite the advantages, some businesses are apprehensive about embarking on the digitalization journey.
Let’s find out why.
Challenges of Digital Transformation in Manufacturing
There are several reasons why businesses are hesitant to embark on a digital transformation program. These problems must be identified, addressed, and dealt with appropriately.
Let’s take a look at some of the obstacles you can face on your journey to digitalization.
1. Lack of digital vision and culture
Have you ever taken a lengthy road journey without knowing where you were going? “No,” I’m sure you’ll say.
The same is true for your digital journey.
Companies must have a clear, long-term digital strategy. If you track a company’s digital path, you’ll see that its success was not coincidental or accidental. The business first established a clear vision of what it desired and what it intended to achieve by turning digital.
Similarly, your digital vision must be consistent with your whole business strategy. As a result, clearly identify your business needs and support them with the appropriate technological landscape.
2. Resistance to change
Many people are underestimating this one. However, it has a big influence on digital transformation and execution.
While company decision-makers see change as a chance to enhance their firm, many employees do not. They are accustomed to working using old methods and are wedded to routines. As a result, when it comes to using technology to enhance procedures, they just oppose it.
This type of shift is unsettling for them. They regard it as a danger to their job security and a challenge to their established jobs and duties. Furthermore, it is well known that people dislike working outside of their comfort zones.
A company’s digital transformation needs leadership and direction.
To solve this difficulty, you might arrange for a top-down commitment. To increase staff productivity, seek for the best digital solutions. Furthermore, good and honest communication will undoubtedly push everyone to utilize new technologies.
3. Legacy business model
It becomes a problem when companies grow too used to their legacy systems, unable to recognize whether the business model (old system) is an advantage or a liability.
Failure to let go of old methods in favor of newer and better technologies is a common stumbling block in the digitization process.
4. Lack of competence
The proper individuals will be needed to help with digital transformation. Lack of in-house IT expertise and a lack of familiarity with new tools might cause anyone to be hesitant about their digitalization journey.
This may be accomplished through educating your employees or by seeking new business partners or personnel to help you digitize your company.
5. Limited budget
A significant investment in the company’s operations, employees, new technology, and infrastructure is required to achieve digital transformation. Due to a lack of funds, businesses may feel obligated to forego the digitalization journey.
In such a circumstance, having a budgeting strategy that includes numerous phases over a few years is critical. It’s pointless to put your organization in danger.
6. Data Security
All stakeholders have access to crucial data and information as a result of digitization. As a result, the entire ecosystem is vulnerable to cyber-attacks and hacking.
This, too, can be solved by identifying vulnerability concerns and putting in place a solid framework. Don’t let a cyber-thief ruin your digital transformation strategy.
Now that we’ve shown that all of the roadblocks to digitization can be overcome, let’s look at how to create an effective digital transformation strategy.
The Digital Transformation Strategy for Manufacturing Businesses
Manufacturing businesses can no longer afford to ignore digital transformation. It is a necessity.
Furthermore, digital transformation entails both financial investment and potential hazards, necessitating the development of a defined plan.
Allow us to create a foundation for your businesses’ digital transformation plan.
1. Create a digital transformation vision and objectives
The initial stage in this process is to define the vision and goals for digitalization. You might start by addressing some of your company’s most important whys and whats: Why does your company exist? What are the goals of your company? What exactly are you attempting to achieve?
Focus on your final goals rather than the difficulties you’re seeking to tackle via innovation. When creating your ultimate goals, remember to be SMART – Specific, Measurable, Attainable, Relevant, and Time-bound.
You can do the following:
- Outline your vision and objectives of implementing digital transformation.
- Define the long-term goals and focus more on the kind of experience you want your customers and employees to have.
- Try to create a global vision, but do keep an eye on reality too.
- For this, don’t lose sight of the short-term objectives and resources available.
- Avoid the adoption of isolated and silo technologies by emphasizing on business improvement rather than limited improvement of individual processes
- Set objectives and targets for the initial few years, like maybe three years or five years.
- Plan on the goals with the most significant Return on Investment as the top priority.
- Include all business areas while creating the strategy such as customer service, operations, supply chain, product designing, support, and the complete business model.
2. Assess the current state and perform a competition benchmarking
The next step may be to assess the present status of your company.
If you don’t know where you came from, you won’t be able to sketch out a clear path to where you want to go. As a result, understanding your company’s actual present situation is critical.
It will carry out the following tasks:
- Help you evaluate your workforce’s existing skillset.
- Define your company’s current processes, organizational structure, and roles.
- Define your organization’s culture
- Identify opportunities and limitations that need to be addressed.
You won’t be able to move to a new platform without taking into account your present procedures. Assessing the present status of your company will assist you in making strategic decisions about your resources and procedures.
You can do the following:
- Evaluate where your organization stands with respect to the desired digital transformation.
- Conduct due diligence.
- Assess your infrastructure and investigate how well your system, software application, and tools address your needs.
- Understand the current strength and limitations.
- Identify a few direct competitors and the best companies for comparison.
- Look for industry best practices.
- Perform market analysis.
- Rate capabilities against benchmarks.
- Conduct a digital maturity assessment based on multiple dimensions of the organization.
3. Conduct gap analysis
Conduct a gap analysis now that you know where you are and where you want to go. This will assist you in identifying the gaps and potential between the two states.
You can do the following:
- Figure out what technology and tools must be updated and which processes need to be automated.
- Select tasks, investments, and efforts in the digital transformation strategy in the best possible way.
4. Design the apt user experience
Good design, they say, is good business. As a result, the quality of a company’s digital experience is vital to its success.
Customers and staff will be able to use your system if it is designed with them in mind. In summary, it will aid in maintaining the interest and allegiance of the user.
A mobile responsive design, for example, can be beneficial to your business since it allows you to reach a larger audience. Alternatively, a digital system with a simple user interface will allow staff with little or no prior knowledge to utilize it.
You can do the following:
- Focus on the kind of experience you want to create for your customers and employees.
- Keep in mind –
- What value do you want to provide to your users?
- Is it easy for them to interact with your company?
- How can you improve the way employees engage in business processes?
- How can employees’ tasks be done in a much quicker and easier way via the new solution?
- Is there a way you can better your customer’s buying experience through a web or mobile application?
5. Review & choose the solutions and vendors
People are frequently overwhelmed by the abundance of options available, but you must carefully study, assess, and select the finest solutions and providers.
You can do the following:
- Have a list of candidate solutions that can meet your objective, deliver the right user experience, and fill the gaps of current technologies.
- Carefully evaluate all the candidate solutions based on their:
- Capabilities
- Features and functionalities
- Past deployment record
- Reputation
- Check on the service provider’s capabilities of after-sales support and required response time.
- Make an informed decision based on tools like a comparison matrix.
6. Prioritize business initiatives
Set goals for digitizing your business because not everything can start at the same time. Determine which concerns are most important and assess their return on investment.
You can do the following:
- Determine the importance of digitizing each business initiative based on criticality and return on investment.
- Rate them on cost, benefit, and risk scale.
- Conduct estimated ROI calculations based on low cost and high benefit outcomes.
- Take a decision based on the above.
7. Prepare an implementation roadmap
Formulate a strategy plan.
The primary objectives and priorities, intermediate goals, a calendar with milestones and benchmarks, and important actors and their responsibilities must all be included in your roadmap.
Remember that the roadmap should be adaptable. It must be able to adapt to your company’s changing needs as well as the digital landscape’s shifting priorities.
Because a digital transformation project necessitates time and money, it’s critical to lay out a plan with phases.
You can do the following:
- Prepare an actionable plan.
- Create a detailed roadmap on phased implementation with its timeline.
8. Work on company culture and infrastructure
Implementing innovative technology necessitates the presence of skilled and active individuals who are eager to turn ideas into concrete plans. If you don’t have an adequate skill pool, you can tackle this by outsourcing or employing fresh personnel.
You can do the following:
- Establish a qualified leadership in charge of digital business transformation.
- Help teams acquire necessary skills and expertise – this may require training, qualification upgrades, and hand-holding sessions.
- Build a digital culture within the company by communicating the benefit of digital transformation to every employee, integrating them into the process. and taking their feedback.
9. Recommend and implement
Prepare a clear business case for stakeholder validation and approval. All revenue and cost-related KPIs that may be influenced by digitization must be included in this complete business case.
It must include the cost of implementation, improvement objectives, and net business gain estimates. You’ll be ready to implement the plan after you’ve reached a final agreement on implementation deadlines.
Whether you want to save money in your supply chain, improve the efficiency and operations of your manufacturing business, discover new ways to optimize your business and production processes, reduce equipment downtime, or meet any other specific requirement, you’ll need a solid digitization strategy to make it happen.
If you carefully follow the instructions outlined above, you cannot go wrong.
Drive Successful Digital Transformation with WDX Technologies
Digital technology is advancing at a rapid pace. Companies that have already begun their digital transformation journeys are unquestionably ahead of the game. We can assist your manufacturing business in implementing a successful digital transformation strategy.
Get in contact with us if you need assistance establishing a bespoke digitalization solution for your manufacturing business and strengthening your business’s advantage.
We are a multi-award-winning web and mobile app development agency with extensive expertise in creating spectacular digital success stories for a wide range of businesses. Let’s talk.
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Book A MeetingGet A Rough EstimateFrequently Asked Questions
1. Digital Transformation Strategy for Manufacturing Businesses
- Create a digital transformation vision and objectives You can:
- Outline your vision and objectives of implementing digital transformation.
- Define the long term goals and focus more on the kind of experience you want your customers and employees to have.
- Try to create a global vision, but do keep an eye on reality too.
- For this, don’t lose sight of the short term objectives and resources available.
- Avoid the adoption of isolated and silo technologies by emphasizing on business improvement rather than limited improvement of individual processes
- Set objectives and targets for the initial few years, like maybe three years or five years.
- Plan on the goals with the most significant Return on Investment as the top priority.
- Include all business areas while creating the strategy such as customer service, operations, supply chain, product designing, support, and the complete business model.
- Assess the current state and perform a competition benchmarking You can’t map out a clear path to where you are going if you don’t know where you are coming from. Therefore, knowing your business’s exact current state is essential. It will do the following:
- Help you evaluate your workforce’s existing skillset.
- Define your company’s current processes, organizational structure, and roles.
- Define your organization’s culture
- Identify opportunities and limitations that need to be addressed.
- Conduct gap analysis You can:
- Figure out what technology and tools must be updated and which processes need to be automated.
- Select tasks, investments, and efforts in the digital transformation strategy in the best possible way.
- Design the apt user experience You can:
- Focus on the kind of experience you want to create for your customers and employees.
- Keep in mind –
- What value do you want to provide to your users?
- Is it easy for them to interact with your company?
- How can you improve the way employees engage in business processes?
- How can employee’s tasks be done in a much quicker and easier way via the new solution?
- Is there a way you can better your customer’s buying experience through a web or mobile application.
- Review & choose the solutions and vendors You can:
- Have a list of candidate solutions that can meet your objective, deliver the right user experience, and fill the gaps of current technologies.
- Carefully evaluate all the candidate solutions based on their: Capabilities Features and functionalities Past deployment record Reputation
- Check on the service provider’s capabilities of after-sales support and required response time.
- Make an informed decision based on tools like a comparison matrix.
- Prioritize business initiatives You can:
- Determine the importance of digitizing each business initiative based on criticality and return on investment.
- Rate them on cost, benefit, and risk scale.
- Conduct estimated ROI calculations based on low cost and high benefit outcomes.
- Take a decision based on the above.
- Prepare an implementation roadmap You can:
- Prepare an actionable plan.
- Create a detailed roadmap on phased implementation with its timeline.
- Work on company culture and infrastructure You can:
- Establish a qualified leadership in charge of digital business transformation.
- Help teams acquire necessary skills and expertise – this may require training, qualification upgrades, and hand-holding sessions.
- Build a digital culture within the company by communicating the benefit of digital transformation to every employee, integrate them into the process. and take their feedback.
- Recommend and implement Prepare a detailed business case for validation and approval by stakeholders. This detailed business case must have all revenue and cost-related metrics that will be affected by digitization. It must have the calculations for implementation cost, improvement targets, and net business gain. A final agreement on implementation timelines makes you all set to roll out the plan.
2. Challenges of Digital Transformation in Manufacturing
- Lack of digital vision and culture Companies need to have a distinct, long-term digital vision. If you follow the digital journey of any company, you’ll realize that its success was not a matter of chance or was accidental. The company first developed a clear vision of what it wanted and what was its objective in going digital. Similarly, your digital vision must be in line with the business vision. Therefore, define your business needs clearly and support them with the right technology landscape.
- Resistance to change This one is generally underestimated by many. But it significantly impacts the digital transformation and its implementation. While decision-makers of companies look at change as an opportunity to strengthen their business, many employees, however, do not look at it the same way. They are used to working with traditional processes and attached to the routine processes. Therefore, when the time comes to improve processes by incorporating technology, they simply resist it. For them, this kind of change brings uncertainty. They see it as a challenge to their set roles and responsibilities, and sometimes even a threat to their job security. Moreover, it’s a known fact that people generally do not like to work outside their comfort zones.
- Legacy business model It becomes a challenge when companies get too comfortable with their legacy systems, not realizing if the business model (legacy system) is functioning as an asset or a liability.
- Lack of competence Digital transformation will need the right people on board. Lack of in-house IT competence and poor knowledge of modern tools can make anyone unsure of their digitization journey. This may be handled via training your workforce or looking outside and finding new business partners or new hires to digitize your business.
- Limited budget Digital transformation requires substantial investment in the company processes, workforce, new technology, and infrastructure. Companies may feel compelled not to undergo the journey of digitization for want of sufficient budget. It is crucial in such a case to have a budgetary plan that involves multiple phases over a span of a few years. There is no point in putting your company at risk.
- Data Security Digitization gives access to critical data and information of your business to all the stakeholders. This makes the entire ecosystem vulnerable to hacking and cyber-attacks. However, this too can be overcome by recognizing vulnerability issues and creating a robust system. Don’t let a cyber-hacker trash away your digital transformation plan.
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