Types
Position
Layout
Blog
#Blogs
#Digital transformation
Written by Team Axcend
If you're still debating whether to start on a digital transformation journey for your manufacturing operations, we'd say you shouldn't.
You're probably late already and you should plunge straight in. Digital transformation is no longer a buzzword these days. It is fast becoming mainstream and many manufacturing organizations are already in their journey and what’s more, they are reaping the benefits. There is a realization that it is a key way to mitigate disruptions such as those brought about by the COVID-19 pandemic. Importantly, these organizations are also beginning to realize that the transformation journey is a marathon rather than a sprint and are willing to put in the time and work more than ever before.
Before we weigh in the pros and cons of Digital Transformation, here's a quick primer on what it means. Digital transformation is the application of digital technologies across areas of operations to ensure value and a superior experience to the end-user. The end-user can be anybody—customer, employees, or partners/vendors.
It also represents a cultural change. In many cases, it will fundamentally change the way businesses operates (and in our experience of doing this for 20+ years, this tends to be a bigger obstacle than just fitting sensors into a plant!). Digital transformation is often uttered in the same breath as Industry 4.0 or the fourth industrial revolution. These terms all are part of the same philosophy or movement that started a decade ago – the utilization of digital technologies to turn manufacturing data to insights and create smart factories.
The first step in digital transformation of any manufacturing organization is the integration (or convergence) of information technology (IT) with operational technology (OT). And the application of digital technologies such as Virtual Reality, Internet of Things, Augmented Reality, Robotics, 3D Printing, Machine Learning, Artificial Intelligence, Big Data, Smart Sensors and Edge Devices to enable this convergence powers the digital transformation.
With close interconnection between physical and cyber systems in the factory, there are innumerable benefits that a manufacturer can achieve. The data that the IT-OT convergence generates on the various aspects of manufacturing operations such as man, machine, material and method uncover opportunities for continuous improvement. Here are a few high-level benefits that digital transformation brings:
While the benefits are clear for everyone to see, one could wonder why manufacturers still resist taking the plunge. From our observations and our interactions with various manufacturing leaders, we've found the following barriers to implement digital transformation.
We understand taking this step is a daunting task but taking the leaf out of many successes and on seeing how the digitally transformed manufacturing organizations have fared better in the pandemic situation, we can safely say that the benefits far outweigh the risk.
First, a recent survey by McKinsey indicates that 96% of the companies who have scaled up some Industry 4.0 use cases felt they were able to respond to the crisis better. The survey also reports that value perception of Industry 4.0 has surely increased after the pandemic.
Second, regardless of a company's size, digital transformation is achievable. It is a myth that Digital transformation is a large-scale change that's unmanageable. It need not be undertaken all at once, manufacturers need to understand and prioritize use cases where digital transformation can be applied which can then be scaled up gradually and expanded to other areas of operations over a period.
Third, age of a company does not really matter. With smart sensors and IIoT technologies, it is proven that even legacy equipment can be connected to the digital fabric of the organization. For example, Tata Steel in Jamshedpur, India, is a 110-year-old plant with a lengthy tradition of cultural and technological legacy. With incremental investments into digital technologies such as predictive analytics in manufacturing and dynamic supply chain planning, they were able to minimize the cost of delivering their patrons by nearly 20%.
Right now, is an ideal opportunity to reexamine execution of Industry 4.0 at your organization. While it may cause challenges of change management in the short-term, the advantages will offset any hardships that the change will bring. If you want a sounding board for your digital transformation strategies, our consultants are here to help.
Visit our digital transformation services to know more.