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Digital Transformation in Manufacturing

The digital revolution has transformed every area of society, from commerce and banking, to healthcare and education. Throughout this digital transformation, one common theme has been clear: Those who fail to embrace technology inevitably fall behind and get replaced.

Digital transformation in manufacturing is not just the future, it’s the present — and one that manufacturers need to embrace if they want to remain competitive and resilient in the face of increasing economic and supply chain uncertainty. But what exactly is digital transformation, and how can it help your company? Read on for an overview of how digital transformation in manufacturing can impact your company.

What is digital transformation in manufacturing?

As the name implies, “digital transformation” in manufacturing is a comprehensive overhaul of processes and operations to integrate advanced technologies and data-driven decision making, revolutionizing the industry as we know it. What does this entail?
  • Leveraging technologies like IoT, artificial intelligence, robotics, and data analytics to optimize operations, enhance productivity, and drive innovation across the production lifecycle.
  • Using technology to achieve greater and ultimately optimal efficiency, flexibility, and competitiveness by enabling seamless connectivity, real-time insights, and automation of key processes.
  • Shifting from individual task automations to a full, end-to-end business process and production automations that’s known as Industry 4.0.

The 3 key benefits of digital transformation in manufacturing

Digital transformation comes in many shapes and sizes. Depending on who your organization serves and what stage of the corporate lifecycle your company is in, you may already have digital-empowered teams around your company, or you might be starting fresh.

Businesses that embrace digital transformation tend to see common benefits emerge as they progress, regardless of industry:

  1. Fast ROI: Every company wants a strong return on investment (ROI) for their corporate investments. According to the 2022 Revalize Insights Report, more than 80% of organizations that adopt a CPQ solution see positive ROI in 12 months or less
  2. Reduced errors: Human error is a major hurdle for many businesses, especially manufacturing. More than half of organizations that adopt a CPQ solution see a reduction in order errors by 50% or more, according to that same Insights Report.
  3. Better customer experience: Digital transformation can be a step that helps you better serve your customers, wherever they are. Today, customers expect a world-class experience and are quick to explore other options if interacting with your company is too cumbersome. In fact, over 37% of survey respondents in the Revalize Insights Report want technology to improve their customer experience.

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The 4 pillars of digital transformation in manufacturing

There are several challenges you must overcome to implement a digital transformation. These include:
  • Resistance to change and employee pushback, either because they aren’t familiar with the technology or they’re afraid that automation will cost them their jobs.
  • Lack of information is an issue as many businesses don’t have the digital expertise to know what’s available or how to get started.
  • A big challenge for many businesses is a lack of a strategy to unite the company behind digital transformation. If you don’t have a plan, it will not be successful.
  • Yet another issue is the budget that is required to make this transition. Technology can be expensive, but failure to adapt is more expensive in the long-run.
Effective implementation requires more than the promise of better and more efficient processes — managers need a real vision for what they’re trying to achieve. Following these four principles can make digital transformation as impactful as possible:
  • Employee empowerment – First, you need “digital buy-in” from your employees. Employees may hesitate to embrace new technology and disrupt the workflows they’ve grown accustomed to. Instead of letting this hesitation foster, empower your employees to advance a step at a time, even if it is baby steps like moving over to a cloud-based system.
  • Engage your customers – Leverage data and statistical analysis to better understand your customers' needs. Tailor your digital transformation initiatives accordingly to enhance your ability to meet those needs effectively.
  • Optimize your process – While working through old, pre-digital systems, you probably found a lot of significant inefficiencies and redundancies that impacted your entire business. Keep these issues in mind as you develop and execute your digital transformation strategy to eliminate them as much as possible.
  • Transform your product or services – In staying current with the latest technology, digital transformation can revolutionize the very core of your business. If you’re used to providing a catalog of products that rarely changes, then it’s absolutely necessary to modernize so you can stay up-to-date. Customization and other options are a must and new technology can help provide you with this.

Building a successful strategy

Once you decide to leverage digital transformation to improve your business, it is time to settle on a strategy to get there. There are multiple steps to creating a digital transformation strategy that works for you.

Consider the following steps to help implement a strategy that is successful for your organization

  1. Assess your current digital state. Conduct an analysis of where you stand with your digital readiness. Think of this like a road trip. You have to know where you’re starting from before figuring out how to get where you want to go.
  2. Identify your weaknesses. Look back at your current state and determine where you have weaknesses and gaps. Is it that you have the software but are lacking in employee training? Then you need to know how to address this.
  3. Produce a list of SMART goals and outcomes. With this deeper understanding in mind, create your goals for making the transformation. Do you want to implement a new software system or a digitized process? Make sure to list out all of the sub-points as steps you need to reach to get to these final outcomes.
  4. Plan your roadmap. Next, make a map of exactly how you will achieve your transformation. This flowchart should include every step along the way as well as those employees who will be responsible for achieving these steps.
  5. Get buy-in from your employees. Engage employees across your company early in the process to generate enthusiasm about the potential of this digital transformation. Educating your employees about the opportunities available is key.
  6. Create a budget. Once you have buy-in, look closely at your budget and determine how much to set aside for the digital transformation. This will be used on new equipment, software, and training.
  7. Select the right partner. Finally, digital transformation touches nearly every aspect of your business, so choosing the right strategic partner for your project is key. At Revalize, we have helped more than 15,000 organizations succeed with the help of digital transformation.
The company that refuses to modernize is making itself obsolete. In order to take the next step in the digital revolution, you need to embrace the concept of digital transformation. That means addressing the challenges so that you can overcome them and propel your business forward.

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