Manufacturers that digitally transform now can become industry leaders

Achieving digital transformation can lead manufacturing organizations to great success.

In brief:

• Learn why and how manufacturing organization require digital transformation

Labour costs are up, consumer behaviours have changed. Manufacturers looking to keep pace should consider bolder action than ever before. Operating efficiently and performing effectively now requires a digitally transformed manufacturing operation — one that is autonomous and automated.

Why is digital manufacturing transformation so important today?

The business case for digital manufacturing transformation has changed. Labour — once abundant and economical — is not only harder to find, but more expensive to retain. Good people had become hard to find even before the pandemic. That was particularly true for manufacturers seeking blue collar workers, as well as plant operators. Fast forward to now, and many manufacturers are finding themselves at a critical inflection point. Talent is more discerning than ever. This pandemic-driven shift is empowering people with more avenues to choose where, how and when they work.

What’s more, it’s not only the cost and availability of labour that’s evolved. A gap is now growing between traditional manufacturing plants and smarter, digital factories. Automated operations syphon mundane and repetitive tasks to machines, freeing humans up to focus on higher-value, more fulfilling work. This puts outdated manufacturing plants at a serious disadvantage.

Newer facilities tend to provide clean, safe working environments and more modern, sophisticated equipment that’s increasingly attractive to younger and more capable talent and anyone seeking a more holistic career experience. This is compounded by a growing stakeholder focus on environmental, social and governance (ESG) values and priorities. People want to work with, and invest in, companies and brands that are thinking about their big-picture impact on the world.

Taken together, these factors are driving a significant change across industry, as talent gets more deliberate about the jobs they’re willing to undertake. Manufacturers can no longer afford to focus on levers like compensation, benefits and work arrangements alone to attract the skills they need to thrive in a post-pandemic world. The industry must innovate its way to the next stage or risk falling permanently behind. And the upfront cost of doing so now far outweighs the risks of holding off.

How can digital transformation help manufacturers turn the tide?

Transforming the underpinnings of your operation can help you improve the primary factors that attract and retain talent. It also begins to redefine your reliance on people, full stop. By embracing digital, you can focus human talent on the most strategic parts of your business. This enables you to optimize costs across other parts of your operations, where technologies like artificial intelligence (AI), robotic process automation (RPA) or machine learning can dial down errors and dial up both efficiency and productivity.

All of this is helpful in a broader environment where macro trends — like a growing preference for direct-to-consumer fulfillment — and ongoing challenges — think seriously disrupted supply chains — will continue to put pressure on manufacturers in the years to come.

Any manufacturer that’s held off on digital transformation due to the perceived costs should now be asking: can we afford not to automate our operations?

What can organizations do to kickstart digital manufacturing transformation?

Digital manufacturing transformation is best tackled one deliberate step at a time. It doesn’t happen overnight. Rather, it’s about making incremental progress towards a clearly articulated goal. Breaking your digital manufacturing transformation up into these three key stages can help:

Stage 1: visioning and planning

No manufacturer should skip this important, foundation-building step. Before charging ahead, ensure you have a clear business case for change that incorporates the realities of your current labour challenges. Each focus area of your digital manufacturing transformation plan should connect to a strategic business priority. This first stage is all about building a robust digital vision for your organization, designing the roadmap and bringing people on board to support the change.

Ask these key questions to get started:

• Where are our key sticking points, and how could digital help ease those trouble spots?
• Which areas of our business could benefit the most from an automated approach?
• Who do we need to bring into our roadmapping to ensure the digital vision we design is reflective of where the business itself needs to go next?

Stage 2: Industry 4.0 implementation

Getting the right people and processes in place to actually implement your shift to an automated and digitally transformed Industry 4.0 approach is critical. Execute the plan in a seamless way that accounts for the basics and the aspirational elements in line with your digital vision. This second stage means getting granular about cybersecurity, sensorization, Internet of Things (IoT) capabilities, connectivity and analytics so that everything you do is grounded in the right foundation. Extend a similar focus to your teams, identifying necessary upskilling, organizational design and program governance priorities to support the broader digital shift.

Ask these key questions to get started:

• What technical changes will deliver the most value in our plant?
• What actionable insights will data generate for us to monitor and adjust our strategy accordingly?
• Where do we need to invest in the talent agenda to ensure we have a workforce that is capable of working in a highly automated environment and empowered by managers to succeed?

Stage 3: continuous oversight

Digital manufacturing transformation isn’t something you do once and never think about again. It requires ongoing discussion, monitoring and analysis. Thinking through how you’ll extend automation and digital to your supply chain matters. It’s important to integrate digital across additional value chains and continually work with your people to create a more agile workforce. This third phase represents a new future state and way of viewing your operations. It is ongoing, continuous and deeply important to realizing the full value of your initial investments. It’s the long play that turns your transformation into an ongoing competitive edge.

Ask these key questions to get started:

• Where can we build on our initial digital transformation to unlock further benefits across our supply chain?
• Are we assessing external influencers to spot additional opportunities to automate or digitize internally?
• How can we drive a cultural shift internally to ensure that all our people are viewing greenfield opportunities through a digital lens?

What’s the bottom line?

Digital manufacturing transformation isn’t about replacing your people with high tech tools. It’s a new way of working that enables you to hire the right people at the right time and to retain the talent you have. It breaks the cycle of never-ending pay increases to attract and retain in favour of offering a work environment that’s differentiated both in terms of physical space and type of work. Embracing this way of working now can drive efficiency and open up new opportunities for manufacturers looking to succeed in a post-pandemic world.