Time for Digital Transformation in the Manufacturing Industry
Updated: Sep 27, 2020
Industrial revolutions have been changing our lives continuously, since the 18th century to this day. From the first introduction of mechanical production, through the revolution of electrical energy, followed by the application of electronics – All led us to the age that we are now in – the age of digital transformation in traditional manufacturing.
Whether you call it “Industry 4.0”, “Industrial Internet of Things (IIoT)”, or “Smart Manufacturing”– what’s bright and clear is that this age of digital transformation is rapidly changing traditional manufacturing as we know it, accelerating industrial processes and making them smarter, more efficient and more flexible
The Digital Transformation Market is Expected to Grow at a CAGR of 22.7% to Reach $3,294 Billion by 2025 (Source: GlobeNewswire)
Digital transformation, or digitalization, is a combination of traditional manufacturing processes reinforced with new innovative technologies. Both are used hand in hand to optimize and reform businesses’ efficiency. Around the world, traditional manufacturing is disrupted by technologies like big data analytics (BDA), advanced robotics, 3D printing (aka additive manufacturing) and more. These technologies are growing exponentially and are radically changing how businesses develop, produce and deliver products.
Manufacturers who are not adopting Industry 4.0 technologies may risk falling behind the curve, says GlobalData. While companies like Siemens, GE and Bosch are leveraging new technologies and deploying digital solutions in their businesses, there are still manufacturers that haven’t realized the full potential of digital transformation yet, and they are putting their competitive position at risk.
When is the best time to consider investing in Digitalization?
In general - the answer is right now, and preferably yesterday. Yet, we must address the situation that the world is currently facing. The COVID-19 pandemic, has been disrupting the daily habits of millions of people around the world. Subsequently, many manufacturers reduced capacities of their manufactured goods or shifted to produce different goods and a significant portion of their employees were forced to stay home in quarantine. Experts believe that this “New Norm” is here to stay, at least for a while. As such, new measures (like social distancing) should be taken by manufacturers to protect employees. But this is just one example of the volatility in manual labor in production. Other effects, like closed borders causing disrupted supply chains, should also be considered. All these factors will most likely have a great impact on most aspects of how manufacturers operate for a considerable amount of time. So, is it still the time to invest in digitalization ASAP?
The answer is still, a big yes! Particularly in these unique times of uncertainty, businesses should push further towards digital transformation. According to an article by McKinsey & Company, a company’s recovery from the crisis depends on its flexibility and resilience to quickly respond to the shifting supplies and demands. This pandemic outbreak has been a wake-up call for many organizations, emphasizing the urgency to shift the focus on investments in emerging technologies, to gain competitiveness and get back on track even stronger than before.
If you are still debating, here are just a few examples for the many advantages that digitalization holds for manufacturers.
1) Improve supply chain efficiency and lower inventory costs
Supply chain management, production and storage of spare parts are processes that lie at the heart of manufacturing. Application of advanced technologies can enhance these processes by optimizing capacities, reinforcing performance, and improving quality and efficiency of the supply chain. According to Forbes, 3D printing is an example for a method that helps manufacturers rely less on warehouses. It reduces the waiting time for a required part while also cutting down the carbon footprint of freight. Here is an example of how Stanley Black and Decker harnessed 3D Printing to shorten lead-time for a family of parts by 86% (from 9 weeks to just 9 days).
2) Drive flexibility and customization
With Digital Transformation, product lifecycle becomes non-linear, but rather networked through unparalleled and intelligent connectivity. The use of new flexible tools (3D printed on-demand and on-site) and machines that adapt to the requirements of parts, makes production lines more flexible and agile. McKinsey’s report states that emerging technologies are the reason that profitable mass customization is finally possible.
3) Accelerate time to market
KMPG names time-to-market as the new value driver for business and appoints digital disruption as the cause for product lifecycle acceleration. Supporting new product stages (like NPI or NPD) with new technologies and data driven tools, integrated with ERP systems, can significantly augment development processes. By analyzing existing data, finding design flaws, and discovering new opportunities, manufacturers can improve existing production methods and save valuable time.
4) Reduce risks
Digital tools and software help manufacturers gain better insights into their supply chain. Innovative technologies can be used to prototype and simulate products, test and analyze production processes. This helps manufacturers to predict performance, enhance quality and avoid the risks and challenges associated with production of new products.
To sum it up, digitalization is here and it is on the rise. According to the DMEXCO Trend Survey in DACH regions, 70% of respondents believe that COVID-19 pandemic will accelerate the pace of digital transformation even more. As businesses had to deal with unexpected situations such as shifting operations, coping with supply chain interruptions and even closing their facilities, they were forced out of their comfort zones and formed a change of mindset, focusing on the acceptance to try new technologies and take significant actions to improve their products and productivity.
Recent occurrences, along with understanding the direction that the industry is naturally headed to, should inspire manufacturers to shift priorities in their pipeline and invest more in R&D and innovation. Expanding this approach will help manufacturers to benefit from digital disruption, rather than being a victim of it, to survive the changes and to successfully adapt their businesses.
If you want to transform your manufacturing with 3D printing technology, we would love to see how we can help you.