Digital Transformation in Manufacturing: Benefits, Trends, Challenges

In 2020, the industry of digital transformation in manufacturing was valued at $263 billion. However, it is expected to reach a staggering $767 billion by 2026. With the emergence of new technologies, the Industry 4.0 era has begun. It is determined by increased reliance on digitization brought on by software development and automation, making the manufacturing process more effective and cost-efficient. Moreover, Forbes indicates that about 60% of businesses treat digital transformation as the most critical aspect of business growth. Keeping all that in mind, let’s explore the phenomenon of digital manufacturing transformation and find out the benefits it brings and the challenges it poses. 

What is digital transformation in manufacturing?

In a nutshell, digital transformation for manufacturing companies entails integrating different digital systems to make conventional manufacturing processes more effective and automated. Digital transformation in manufacturing means boosting traditional production processes and bringing the workforce closer to digital technologies. Tapping into digital transformation in manufacturing often requires partnering with a trusted enterprise development company. 

When it comes to the goals of this concept, here are the most crucial aspects:

• Reducing costs;
• Maximizing revenues;
• Improving overall operational efficiency;
• Boosting the quality of produced goods;
• Improving customer satisfaction;
• Adapting to changes and driving competitive advantage.

Respectively, the aforementioned digital transformation objectives in manufacturing show how beneficial this concept can be if it’s properly applied. Yet, before speaking about the direct advantages of the practice, it is crucial to explore different trends driving digital transformation within the manufacturing industry. 

Digital transformation in manufacturing: Industry trends

There are various digital transformation manufacturing case studies available. When going through them, one can outline particular trends coming to the surface. At this point, one can speak about five top digital transformation trends in manufacturing:

• Artificial Intelligence (AI) and Machine Learning (ML). AI is about creating software mimicking human reasoning and neural networks. ML is a part of AI directed at predictive analytics and data management. For example, in manufacturing, machines collect vast amounts of data which AI helps analyze.
• Internet of Things (IoT). IoT is a technology entailing a network of smart devices connected via similar software hubs. IoT grants much faster and more efficient data sharing using the interlinked sensor. In manufacturing, IoT helps organizations redefine the entire way products are manufactured and delivered. Surveys suggest that 63% of manufacturers plan to implement IoT shortly. 
• Smart Manufacturing and 5G. Integrating 5G technology in manufacturing is a part of the Industry 4.0 industrial revolution. Namely, this new generation of mobile networks is much faster and more efficient. It facilitates the exchange between IoT devices faster and ensures greater reliance on decentralized decision-making.
• 3D printing. Digital transformation in manufacturing heavily relies on 3D printing. Manufacturers can use the tool to build cheaper prototypes. In addition, the automotive and aerospace industries broadly apply 3D printing.
• Agile methodologies. Respectively, digital transformation in smart manufacturing brings forward an Agile approach and better responsiveness to changes. These two factors are vital for adapting to ever-changing market conditions and ensuring competitiveness. 

These five trends show how digital manufacturing transformation is currently applied in the industry. One can also expect the list of trends to expand with the further integration of smart technologies in manufacturing. Next, learning about the distinct benefits of digital transformation in manufacturing is essential. 

Benefits of digital transformation in manufacturing 

Getting the most out of digital transformation depends on software development partners and new professionals in automation a manufacturer can find and hire. At this point, when you have all the elements in place, digital transformation in manufacturing can solve various problems and bring the following benefits:

• Cutting costs. Deloitte indicates manufacturers with high digital or digital transformation report higher net profits and increased revenue growth.  For example, companies can use smart sensors to determine which machines experience issues and which will need fixing soon. At this point, manufacturers anticipate potential problems and deal with them in advance, which results in reduced capital and maintenance costs. 
• Improving data visibility. Traditional on-premise data storage approaches offer a range of factors linked to better security and control. However, these data storage methods are laborious and expensive to scale. In such a case, manufacturers appeal to cloud computing to get an option to scale their data storage requirements quickly. 
• Reducing downtime. Forbes suggests unplanned downtime can cost companies about $50 billion annually. IoT devices, AI, and ML bring forward predictive maintenance. In addition, it grants greater equipment reliability by introducing corrective actions before equipment breaks down. 
• A digital mindset. Digital transformation in manufacturing brings a digital mindset. It means manufacturers use software products to promote innovation and digitization. 

Considering these benefits of digital transformation in manufacturing, it is apparent that smart technologies make the industry more efficient and cost-effective. What is more, there is tangible evidence supporting that. 

Challenges of digital transformation in manufacturing

While digital transformation in manufacturing has particular benefits, it cannot be coined as a panacea. Why? Namely, because there are still specific challenges to consider. Let’s explore the following concerns:

• A deficit of financial resources. Digital transformation needs solid investment. As a result, a lack of funds presents itself among the key challenges of digital transformation in manufacturing. 
• No apparent framework. If you do not have a clear path for implementing digital transformation in manufacturing, there is a high chance it can fail. 
• Cybersecurity issues. Digital transformation increases reliance on data and automation. However, the more data is exposed to the cloud, the greater the chance of a data breach. 
• A lack of support. Digital transformation in manufacturing is a complex process. Along with resources, it depends on robust executive support. If you cannot afford that, better reconsider digital transformation. 

Considering all these challenges is crucial for properly applying digital transformation in manufacturing. If you don’t have funds, executive support, and robust cybersecurity measures, deal with these aspects first and only then turn to digital transformation. 

All in all, digital transformation in manufacturing can be a blessing. However, it delivers distinct benefits, such as cost-efficiency and flexibility, only when you have the proper foundation for its application and a trustworthy software development partner. In such a case, make sure you have a budget for digital transformation, have solid executive support, and a good software development company. With all these in mind, manufacturers can take their production to the next level. 

Contact us if you need to build a software development team specialized in digital transformation in manufacturing.