Digital Transformation • July 20, 2021

The Digital Enterprise: Manufacturing at the Tipping Point

The Digital Enterprise: Manufacturing at the Tipping Point

The manufacturing industry has reached a tipping point on becoming a digital enterprise. There are strong expectations of growth, but challenges such as rising costs and market volatility mean that manufacturers must continue to closely examine production processes for performance improvement and optimization. Manufacturers are now dealing with an extensive value chain, heightened competition, and stricter regulations. Paper-based or manual work models simply can’t keep up with today’s conditions.

The COVID-19 pandemic didn’t cause these problems, but it certainly exacerbated them. For many manufacturers, it’s been a powerful catalyst for digital transformation. “More than two-thirds of manufacturers (67%) have accelerated their adoption of digital technologies as a result of the coronavirus pandemic,” according to a 2021 report published by The Manufacturer and IBM. The pandemic revealed how important agility is for manufacturers to operate in a volatile environment – and how critical it is to become a digital enterprise. The American Society of Mechanical Engineers has gone so far as to say that digital transformation essential for survival (source).

What is a Digital Enterprise?

Digital transformation is far more than the adoption of technology and software tools. Silos of automation are not the future. Instead, think along the lines of how to create a digital ecosystem that utilizes technology to stay connected, orchestrate collaboration, and become highly efficient. To perform at this level, digital tools need to be flexible and work together – especially in a heterogeneous environment. Just like a natural ecosystem, a digital ecosystem is self-organized, scalable, and sustainable. In the next few years, digital transformation success will be determined in part by how well enterprises can integrate and scale their systems.

Just as importantly, success will be measured by your ability to use the vast amounts of data your digital ecosystem generates. Information is already the most underutilized resource in our industry today. Manufacturers are now seeking to become digital masters to gain a clear advantage in the marketplace. Artificial intelligence, or AI, is playing a role in this, with manufacturers increasingly adopting data analytics and manufacturing intelligence software to gain better, real-time insights into their operations. A new generation of AI-powered machine learning is redefining what “visibility” means to executives, empowering organizations to better navigate volatile markets while outperforming their competitors in cost and speed.

Deeply integrated, flexible digital ecosystems with AI capabilities are the future of digital transformation, turning fragmented operations into a well-oiled machine. But of course, it’s not just the organization that is changing, but how people work as well.

The New Work Model in a Digital Enterprise

We see the impact of technology everywhere in society, from bitcoins to ride services like Lyft and Uber that exist because of their respective digital ecosystems. Along with everything else, the workplace is also evolving toward a mesh of human abilities amplified by technology. This intelligent digital workspace is a concept that senior decision-makers must understand as we transition to the new work model.

Just as it breaks down the walls between departments and operations, digital transformation breaks down the walls that separate workers from each other. For every minute workers don’t have to spend searching for missing inventory or dealing with complicated sign-off procedures and communications, they can do more productive work. Automation combined with human innovation is key to yielding your enterprise’s highest possible level of productivity. 

We are talking about more than just output. What would it mean for decision-makers to have all the information they ever wanted, with AI analysis and advice, about anything happening across the enterprise? At all times and all places? With all the ramifications and possibilities of each decision as clear as day? We’ve all seen those science fiction movies where someone moves data and symbols around on a holographic projection with their fingers, making things happen in the real world. It seems less like fiction every day.

The Pace of Digital Transformation

Manufacturers have invested billions of dollars in modern digital technology. This ranges from additive printing and machine sensors to large-scale integration across the digital enterprise. This change is happening fast. IDC analysts recently reported that “by 2024, 30% of G2000 firms will rely on a global, secure, intelligent, highly integrated, and collaborative ecosystem that enables enterprises to function as borderless organizations” (source). 

It’s happening now, and it’s maturing faster than you probably think. Workers at all levels are looking for more agile ways to do their jobs. Digital transformation will bring positive and permanent change to the way manufacturers function—from the CEO to the shop floor.

Final Thoughts

Right now, manufacturers are at a moment of great opportunity. Enterprises seeking a competitive advantage should think about the benefits offered by digital transformation. More than that, they should be planning how they will compete and survive in the coming months and years. The next digital revolution is launching, and the technology to power it is mature and well-adopted in the industry. Advanced analytics and automation will bring manufacturers to new heights of agility and productivity. The industry has reached a tipping point, and now is the time to seize the opportunity.

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