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How Digital Transformation Is Revolutionizing Manufacturing Today

85% of manufacturing executives understand the criticality and support digital transformation initiative sand development in their companies according to a recent study from Jabil.

18% expect digital transformation to accelerate faster than predicted across manufacturing due to the many customer experiences and process improvements possible.

Gain better business insights with improved visibility and analytics, increasing margins, improving customer experiences and supporting new business models are manufacturing executives’ top goals for digital transformation.

Manufacturers are digitally transforming themselves today, revolutionizing how they attract, sell and serve customers. Customers are the catalyst or fuel that provides the momentum manufacturers need to keep digitally reinventing themselves.  From the smallest manufacturers, I’ve visited this year to those with production centers on five continents, an intensity to always improve fueled by real-time customer feedback is what sets them apart and ensure they succeed at digital transformation.

Digitally Transforming For Personalization At Scale And Speed Pays

Manufacturers succeeding at digitally transforming their businesses do two things well. First, they can prioritize and optimize existing customer-facing processes. Second, they are committed to digitally transforming legacy processes to support new business models. A recent study from Jabil, Trends in Digital Transformation: a Survey of Technology And Business Stakeholders In Manufacturing Companies (29 pp., PDF, no opt-in) provides insights into manufacturing executives’ digital transformation initiatives, experiences, expectations, and plans. The study is based on a survey of over 300 manufacturing executives. Key takeaways and insights from the study include the following:

  • Manufacturers are prioritizing investments in technology infrastructure including cloud, mobility, big data analytics, AI and enterprise solutions to scale customer-facing and legacy process digital transformation. 76% of manufacturers say that limitations with existing infrastructure are having a significant impact on their digital transformation plans. Looking to overcome this major constraint, 99% are investing in their technology infrastructure and ecosystems. This includes more than half (54%) who say they are making significant investments in new technologies to enable digital transformation.
  • It’s the metrics and Key Performance Indicators (KPIs) that track customer-facing process improvement and new business model success that matter most and have the potential to revolutionize their entire companies. The study found that manufacturing executives who chose customer-based metrics and KPIs to measure process improvements are the most successful in making strategies successful and leading their organizations permanently improve. These include measuring the percentage of customer interactions that are successful over digital channels, digitally- and AI-driven customer service that delivers higher customer satisfaction scores, the percentage of operational assets connected in real-time, the percentage of fleet tracked in real-time and more.   
  • Manufacturers are aggressively adopting IoT into their product strategies with the data captured as being essential to fueling digital transformation success.  All manufacturers interviewed with digitally-based products either already have or are planning to integrate IoT technologies into their products. 35% are actively shipping IoT-enabled products today, 54% have a plan in place to produce IoT products or solutions, and 11% are actively evaluating options. 100% of manufacturers expect the data generated from IoT-enabling their products will be valuable to ongoing digital transformation initiatives. 12% of manufacturers say IoT data is critically important to their digital transformation strategies and 65% characterize the data as very important. The graphic below illustrates how pervasively manufacturers are adopting IoT today and the high value they place on IoT-generated data for digital transformation initiatives.  

 

  • Digitally transforming customer-facing processes first enables greater personalization at scale and quicker speed of response to customer needs. Accelerating time-to-market of new products and meeting time-to-customer delivery times is a conflict many manufacturers continually face. It’s a challenging conflict to resolve as both often require the same resources. An approach that’s working to resolve this is using real-time integration across CRM, PLM and ERP systems to manage products along with a life cycle, coupled with IoT-based real-time monitoring from suppliers to the shop floor and on to distribution centers.  IoT’s role in digital transformation is a significant one, enabling Industrie 4.0 compliance as well. Configuration Lifecycle Management is the digital transformation framework of choice for manufacturers whose business models are based on providing customers flexibility in defining custom configurations.

 

Conclusion

Manufacturing executives say that board of directors-level support for digital transformation initiatives has increased 62% in the past two years. 81% of manufacturers surveyed plan to transform factories and facilities to leverage innovation. Every manufacturer who produces digital products either already is in production with IoT-enabled products is planning to.

The Jabil study underscores how important it is for manufacturers to prioritize and make progress on digital transformation today. By concentrating on customer-facing processes first, manufacturers can become collaborators in the creation of new products with customers, while also accelerating development and sales of smart, intelligent products. The Jabil study also underscores how important digitally transforming quality into a continuous improvement cycle is and the strategic role of IoT. The bottom line is manufacturers excelling at digitally transforming themselves succeed because they are taking a very customer-driven approach to measure process improvements while successfully launching new business models.