The digital landscape has been consistently changing for well over a decade and for manufacturers, it has been evolving at an increasingly rapid pace.
According to Gartner, 91% of organisations are engaged in some form of digital initiative, yet only 40% having brought these initiatives to scale. The reason why some manufacturers have been at the top of their respective industries since the turn of the last century is because they have successfully adapted to their environment. Companies that embraced digital technology, specifically on the plant floor, are now able to improve and adapt their operations at a faster speed and even anticipate changes before they occur.
The drivers of digital change
It’s the responsibility of any manufacturer to conduct their due diligence and identify any threats that could impact their business. If done correctly, they will be able to prepare for most situations, however, as recent events have shown, there are some disruptions that can hit us without warning. These unexpected events have resulted in the business world moving away from a secure, safe and stable market, to one that has become uncertain, unpredictable and increasingly unique.
As technology has evolved, so has society, and with everything becoming increasingly connected, this has resulted in purchasing habits changing exponentially. The internet has meant consumers have now become both influencers and influences and have a wealth of tools at their fingertips, such checking ratings, reviews and the sources of the cheapest deals . As society has evolved, so have attitudes. Consumers are more sensitive to a myriad of different issues such as waste, pollution, sustainability and climate change which now have a strong influence on their buying decisions.
These are huge challenges for manufacturers to overcome.
Add to all that COVID-19 has caused unpredictability and volatility across entire value chains just as manufacturers have experienced a massive impact on workforce availability, restrictions to the workplace and limitations to travel. This has occurred during a period in which global logistics and supply chains are tearing down barriers and cost-of-entry for new competitors, making the world much smaller for manufacturers and even more competitive. This is why it’s vital to adapt to change and transform.
Adaptation and transformation
The odds are stacked against any organisation that refuses to embrace digital technologies and proactively transform in today’s market. So, what are the top five reasons that manufacturing needs to prioritise digital transformation initiatives now more than ever?
- We need to do more with less
Given the current climate, it’s imperative that manufacturers have the infrastructure, talent and capabilities to do more with less, either by reducing costs or being agile in the face of disruption. Some may work in an industry where demand plummets fast and this puts pressure on the business in terms of where they can cut costs. Others have seen demand skyrocket over a short period which requires quickly doing more with less. For these companies, even though demand has increased, they still have to navigate the disruption across the upstream supply chain.
While some manufacturers may not be at either sides of these massive swings in demand, rather they are somewhere in the middle where demand has been only modestly impacted to a greater or lesser extent. In any case, the need to do more with less is prevalent beyond that which is driven by demand. Manufacturers need to reduce waste, energy and resource consumption and become more sustainable, all while ensuring that production is safe, fit for purpose and to the highest quality.
- Increased operational agility
Adapting to volatility and uncertainty on both the demand and supply sides are critical. The rule book on demand forecasting and supply chain planning no longer applies as the current climate is too unstable to predict what demand will look like in the very near future.
To cope with this, it’s vital to be more agile and responsive. Manufacturers need to reduce the latency between when they start to see things happening across the market and make the decisions about what they do on the plant floor in response to that. The decision-making process must be reduced from weeks to days, if not hours.