Why digital transformation in manufacturing is essential for a future advantage

Take traditional manufacturing processes, add in new technologies, and then infuse it in every step of the operation, and you have digital transformation in manufacturing. Digital transformation drives improved quality control, makes huge efficiency gains, and creates a better product--with reduced costs and superior environmental controls. It is changing every aspect of manufacturing, creating huge advantages over their competition--and the changing world.

Increases in IT spending are transforming how manufacturing businesses operate, allowing them to do more with less, increasing efficiencies, reducing costs, and responding to increased consumer need for personalization.

Why should manufacturers implement digital transformation?

There are massive benefits to organizations that undertake digital transformation. As well as financial and business benefits, there are environmental and social positives too, making transformation imperative to remain viable and competitive.

Increased quality of output

With increased numbers of sensors, automated testing, and quality control throughout the manufacturing process, manufacturers can create higher quality products. Using the Pareto principle (and knowledge gained from machine learning), manufacturers can make changes to any production line to reduce errors and improve processes.

Increased efficiencies of processes

Hyperautomation allows organizations to remove human errors from their manufacturing processes. Hyperautomation involves integrating artificial intelligence (AI) and machine learning (ML) to augment human activity.

Eco- positivity

As consumers increasingly demand eco-positive practices, technology evolves to provide answers. Monitored and AI-driven machinery increases efficiency, reducing energy consumption. An increase in efficiency often supports less material consumption too. Less resources consumed is incredibly positive for the environment.

Reduced costs, increased margins

Digital transformation reduces costs for manufacturers. The Internet of Things (IoT) helps manufacturers diagnose and resolve issues, reducing downtime. Connected machinery offers a range of benefits to manufacturers such as diagnosing problems before they arise and planning maintenance during downtime for gains in productivity.

Personalization, agility and increased customer centricity

Possibly one of the biggest challenges for manufacturers is customizing products at scale. Customers will spend more for personalization, but they desire the same responsiveness and speed that generic products provide.

An agile manufacturing process allows for a customer-centric business. By utilizing data-driven production machinery that understands and applies customization parameters, production lines can be directly influenced.


In business, resiliency is key to thriving in difficult circumstances. While there is a resiliency of operations, adaptability is crucial for long term success. Manufacturers must be able to anticipate and respond to challenges to stay ahead of the competition.

Digital technologies help manufacturers by harnessing flexible automation, operating remotely, and connecting the supply chain with a cloud-based infrastructure.

Manufacturing-as-a-Service (MaaS) and cloud manufacturing

Manufacturing-as-a-service (MaaS) organizations operate as contractors, creating products for the businesses that employ them while distributing costs for software, repairs, maintenance and equipment. This creates efficiency and boosts capacity utilization; it is far more productive and effective to have a premises operating 24/7. By taking on production for a range of businesses, a MaaS organization can reap the benefits of day-round operating.

Automated digital processes are also an incredibly good tool for the businesses employing MaaS organizations, allowing expansion into bigger volumes of products and new product ranges--without investing in more equipment and infrastructure.

Manufacturing in the cloud

While the creation of physical items seems to be limited to the physical sphere, increasing the uptake of cloud-based architecture offers great advantages to organizations. Cloud agnostic software allows for agile development, removing the need for monolithic legacy applications.

With the increasing reliance on the Internet of Things (IoT), there is a larger demand for data. Systems that can accommodate massive amounts of data and process it quickly, with no disruption or risk of loss, is imperative for organizations.

A cloud-based system that is well-researched and implemented offers unique benefits to manufacturers. Remote operations mean that manufacturing can continue, without staff. A holistically-designed system means that every step of production is automated, removing the risk of error at every stage.

For example, a customer places an order online. The system decides if there is enough product in stock, and if not, instructs the production line to create new products. It automatically orders raw materials, if required. The product is created, with machinery monitored along the way for flaws, faults, or problems. The product is despatched, and the customer automatically invoiced. While humans are still required, cloud-based systems mean they can access anything they need, make changes, and see progress from anywhere.

Barriers to digital transformation in manufacturing

As with any major business change, there are a number of challenges. Overcoming them is vital to successfully implement digital transformation.

Identification of barriers

Digital transformation needs enormous research about new technology, its advantages, implementation, and continued support.

Organizations need qualitative research to identify when, where, and how systems can be implemented. Interviews with existing staff, experts in the field, and management can determine major barriers and benefits.

Common barriers to digital transformation include:

  • Missing skills: IT and process knowledge
  • Technical barriers: dependency of other technologies, security issues, and existing infrastructure
  • Individual barriers: fear of job loss, and technology acceptance
  • Organizational barriers: resistance to change and risk aversion
  • Environmental barriers: lack of standards and laws

Organizational issues

The key to implementing digital manufacturing lies with the management and staff. Buy-in is needed so that the processes are developed with thought, implemented with care, and then managed correctly. Organizations need research to combine the physical world (complex hardware, customer requirements, and labour) with the digital world (software, data analytics, and digital services).

Manufacturers can consider appointing a Chief Digital Officer (CDO) to oversee research and implementation of the digital transformation. This, however, needs buy-in and oversight from the CEO and a fine balance between collaboration and specialization.

Manufacturers need to prioritize the changing focus of IT departments. Since legacy systems still need maintenance, traditional corporate IT is still needed, but complex infrastructure requires modern, challenging thinking from the right leaders.

Leadership is vital to lead the organization from the upper management to the contractors and staff. Not only that, but leadership is needed to develop new partnerships with providers and customers. CDOs can improve the very foundations of the business with efficient day-to-day operations and technology outcomes based on data.

Technical barriers

Existing legacy applications, a high cost of entry, and a lack of software knowledge can hinder the transition to digital manufacturing. Existing software and hardware, along with traditional IT thought, do not allow for the independent scaling of components, making processes limited and wasteful.

Developing a platform ecosystem that responds to needs, rather than responding to existing software, is needed to overcome traditional challenges, migrate to cloud-based digital manufacturing, and capture the many advantages that are available.

Digital Transformation in Manufacturing diagram