Executives have consistently stated that digital transformation is a top priority. However, implementation has been slow and the success rate has been extremely low. In fact, less than 30 percent of organizations succeed in implementing an effective digital solution according to McKinsey & Company.
That hasn’t stopped manufacturers from continuing to implement digital transformation initiatives. The promise of improved processes, increased quality and output, and an overall improvement in profit margins has led many organizations to continue their journey; especially now as they work to adjust to the new regulations and challenges from COVID-19.
In a recent State of Manufacturing survey, whose results will be unveiled in a live event on July 15, 71% of manufacturers said that digital transformation has increased in importance over the past three months. The question that presents itself is what makes this time different? What can manufacturers do to make digital transformation initiatives stick?
Manufacturing executives provide their insights on how the manufacturing industry can successfully achieve their digital transformation goals.
Manju Parkhe, Vice President Advanced Operations, Medtronic: I think that with COVID-19, manufacturers have realized that they need to empower the manual labor force. With events like Ebola, H1N1, and a possible second wave of COVID-19, companies want to move forward with a smart factory and create more automation, manage manufacturing processes with data and capture information.
I believe that certain technologies will make an entry and sustain because some industries cannot keep up with production demands. People have realized you can manage things with analytics, so that will create a lot of opportunities. Those operations will also allow for remote operation and allow companies to drive improvements.
Julie Copeland, CEO, Arbill: The need to adopt team communication including Microsoft Teams, Zoom and other technologies exploded overnight, providing everyone with new ways to collaborate and the procurement rates speak for themselves.
Embracing these new systems are all indicators that technology continues to be a space that has untapped opportunity for growth. I think that manufacturers will also investigate other emerging technology, including finding ways to utilize augmented reality.
Janette Bombardier, COO & CTO, Chroma Technology: We are on our digital transformation journey and it is through leadership and the demonstration of the value to our customers and our business that will make it stick. Digital transformation is a cultural change and needs to be addressed as such.
David Rosen, CEO & Founder, Kira Labs: At Kira Labs we have been adopting a variety of digital innovations throughout the manufacturing process. Some of those digital initiatives have been low-cost and relatively homegrown with the implementation of sensors, data dashboards and optimizing the flow of information for the entire company.
I believe that small incremental steps are required to make the transformation happen and it is crucial to model physically and visually whatever area, practice or process is destined for digitization. Another challenge that businesses have to contend with is that automation and digitization providers are all too often interested in using their solution regardless of the business needs. In an ever-changing environment, flexibility is key and a waterfall planned project will not address the realities of the business by the time the solution comes online.
Don McCartney, Global VP of Enterprise Digital Manufacturing, Oshkosh Corporation: I am a firm believer it will stick because we are already tapping into this technology to be socially distancing. We are accelerating our use of digital technology to determine where we have opportunities for our employees who are coming in contact with one another. But also using that technology to determine how we can change the process and make it better. That’s why I believe it is going to stick.
Drew Caylor, Managing Director of WILsquare Capital: Manufacturing businesses have long looked to technology as a means for cost reduction in operations. What I think many manufacturers will discover through this crisis, are the sales opportunities that can be created through digital marketing and ecommerce. The opportunity to reduce the distance between manufacturers and end users through digital technology may be more transformative than the newfound ability to occasionally work from home.
Remember These Two Key Components
Ultimately, there are two key components for digital transformation to be successful. The first is strong leadership; 87% of manufacturers surveyed have a designated leader for digital transformation. While Operations was the top response, there is a significant amount of diversity in the team leading digital transformation. You have to find what form of leadership works best for your organization.
The second is that digital transformation initiatives need to be tied to business cases. Reducing operations costs was named as the number one strategic priority. Find an application where you can easily drive value, and begin with that. The point of digital transformation isn’t about replacing discontinued legacy systems, it’s about driving change within the business and creating new efficiencies.