Why Manufacturers Need Digital Transformation

It's inevitable: manufacturing companies will eventually have to digitally transform their processes to stay relevant in today's global and highly competitive market. And it is not only your competitors you should have an eye on, but also rapidly changing market conditions and customer demands. Digital transformation takes time, commitment and effort, but the benefits you gain are worth it.

What is digital transformation?

„Digitization“, “digitalization“ and “digital transformation“ – are they all the same? Not quite. Digitization means converting all your analog paperwork to a digital form, i.e. saving all your documents and notes digitally. Digitalization goes one step further and means implementing new technologies into existing business processes.

While digitalization may be restricted to just one process, digital transformation entails fundamental changes in all processes of the business area that is to be digitally transformed. Outdated technologies are replaced by entirely new ones and, consequently, structures and the ways employees had been working before will also change. It is a huge step and a long-term project for a company to undergo digital transformation, but one that will be rewarding.

Key technologies for digital transformation in the manufacturing industry

The term “industry 4.0“ a variety of different technologies relevant to the digital transformation of manufacturing companies. Let us have a look at some of the most important modern technologies in this field:

  • Cloud computing
    Commonly called “the cloud“, cloud computing builds the foundation of digital transformation. It describes the deployment of services and the underlying IT resources on demand via the internet. If you are using services from the cloud, the corresponding programs don’t run on your local computers but are hosted on servers owned by cloud providers such as Microsoft.
  • Internet of Things
    The Internet of Things, or IoT, is a complex concept that can be used for many private and business purposes.  Generally, it means that physical objects are connected with others and exchange data via the internet or a local network. On a smaller, personal scale, for example, your heating system could be connected to your smartphone, allowing you to turn up the heat in the living room from afar an hour before you even get home.
    In manufacturing, this technology can help detect malfunctions in machines at an early stage. Furthermore, sensors on assets can recognize changing parameters such as vibration, temperature, humidity or energy use and transfer the data to, for example, a computer. Consequently, you are able to monitor machinery and its environment at different locations remotely.
  • Artificial intelligence
    Artificial intelligence (AI), is inherent to some machines, mostly computers, and simulates the thinking processes of the human mind. By performing complex algorithms and mathematical functions, AI can solve problems or make decisions on its own, based on its data input.
    Nowadays, AI is used in many aspects of our daily lives, including smartphones, social media feeds or gaming. Microsoft has embedded AI in its apps from the business suite Dynamics 365 and other products.
  • Connected field service
    Technical field service is a part of many manufacturing companies. Connected field service leverages IoT technology to enable remote monitoring and predictive maintenance of facilities and devices. That leads to a reduction in machine downtime, a quicker fix rate and more satisfied customers.

Reservations about digital transformation in manufacturing

Digitally transforming your entire company is a huge step and it is understandable if you have some doubts about it. Looking at the most common arguments not to implement digital transformation, however, reveals that they can be debunked rather easily.

Tradition

An argument you hear especially in traditional companies is: ‘We have always done it this way and it works, so why should we change anything?‘. The answer is easy: ‘Because by utilizing modern technologies, you can detect weaknesses you didn’t even know existed and improve all processes.’

Fear of change

Digital transformation implies a lot of changes for everyone involved. That can seem scary. Therefore, it is important to involve all employees at an early stage, if possible even in the decision-making process. The correct concept to apply here is change management. Only when the people involved understand why change is necessary and what benefits it brings them, will they accept it and even help drive it.

Misconception

A common misconception is that digital transformation means replacing human employees with machines. While it is true that some recurring tasks will be automated, that primarily means that people have more time to do more meaningful work. The digitalization of processes is intended to support humans and make their work more convenient, not steal their jobs.

High effort

Digitally transforming your company or part of it is no easy feat, and especially no quick thing to do. You need to invest time, work and money. But that shouldn’t keep you from doing it, because the long-term advantages of digital transformation outweigh the effort you have to put in.

Lack of IT expertise

You probably don’t have the experts for digital transformation in your team. That is fine. That is what we, proMX, are here for. As an experienced transformation partner, we will accompany you throughout the process, from developing a strategy to implementing new technology and introducing your employees to it. Afterward, we are also here for you if there are any questions or issues.

Security concerns

The thought of moving all your business data and processes from local servers to the cloud might give you an uneasy feeling, but rest assured your data and processes are secured. Nothing will get lost or remain unprotected.

Positive effects of digital transformation on the manufacturing industry

Many benefits make up for the great effort of digitally transforming your manufacturing company.

Reduced costs

The above-mentioned technologies, like AI and IoT, help you recognize and eliminate inefficiencies and thus optimize processes. That means your employees need less time for the same work and consequently can produce more in the same amount of time. Additionally, data insights show you where there is potential to save money, in your supply chain operations. Remotely monitoring your machines lets you see malfunctions early and helps you keep the downtime to a minimum.

Thanks to modern solutions you can also deal with more customers simultaneously and increase your customer base.

Increased resiliency

Digital workflows can be changed quickly without too much effort. This allows you to stay agile and react flexibly to changing market conditions or new customer demands. Processes and business models can also be scaled more easily.

Higher customer satisfaction

In today’s highly competitive market, excellent quality alone might not be enough to win and keep customers. One area where you can really set your company apart from your competitors is customer service. Insights into your customers’ behavior and other data help you think in a more customer-oriented way, allowing you to better fulfill their expectations. You can use that during the sales period but also in field service.

Room for innovation

Digital technology not only improves what exists already, but also brings opportunities to try new techniques or even implement entirely new business models. In the cloud, new ideas can be tested for a relatively low budget and in an environment where it doesn’t affect the actual business. Giving them the possibility to try new things fosters your employees’ creativity.

Attractive employer

To produce excellent products and to deliver outstanding service you need great employees, and to attract them you need to offer a modern workplace. The younger generation especially values working with modern technologies. Furthermore, a business infrastructure in the cloud allows remote work from anywhere – another aspect that employees appreciate.

A professional transformation partner is key

You’re now convinced that digital transformation is the right move for your manufacturing company. What comes next? How do you even get started? Well,  what we recommend you do now is find a suitable IT partner to support and guide you through the next steps. The best partner for you is one that has successfully completed digitalization projects for a manufacturing company similar in size to yours.

Give us a call and let's see if proMX is the right fit for your digital transformation.

 

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