2019 will be the year where digital leaders extend their lead over followers, and this could leave some manufacturers seriously lagging behind. The forward-thinking ones are taking it one step further from just building great products to undertaking wide-ranging transformation initiatives to deliver new services and enhanced customer experiences.
In research on the transformation happening in the manufacturing sector, Forrester Research noted that “industrial firms must move faster, deliver new value to new stakeholders, and respond to the shifting expectations of both their customers and their customers’ customers” if they want to survive in the 21st century.
Despite the manufacturing sector thriving, the challenges faced are still worth mentioning; consistently producing high-quality products, complying with strict regulations including health and safety at work, quickly responding to market fluctuations and improving customer satisfaction and retention.
There are many strategies and best practices to stay competitive, but the one that can have the greatest impact is digital transformation. The traditional way of improving business processes is no longer enough. A paper based system leaves you lagging behind since you can’t be as responsive as your competitors and manual processes are likely to cause errors. The goal is to ensure consistency and efficiency throughout all processes through automation, while providing the digital capabilities needed to capture and analyze an immense amount of data.
Manufacturers are going digital now to:
Address the growing talent shortage
The 2018 Deloitte and The Manufacturing Institute skills gap and future of work-study shows a growing shortage of skilled workers over the next decade—up to as many as 2.4 million unfilled jobs by 2028. This industry is currently dealing with one of the tightest labor markets in history and historic low employment rates. Over 50% of manufacturers say they have already adopted automation and advanced technologies, which are shifting the requisite skillsets of employees.
Digital transformation is not going to replace the workforce. Instead, it will free employees from performing routine tasks and enable them to do more creative, value-adding activities. It will also help attract top talent to your organization. In the short term, the shortage of labor can be addressed through automation by leveraging technologies like artificial intelligence (AI), the Internet of Things (IoT) and robotics.
Likewise, technology can make a workplace more attractive for manufacturing workers since they do not have to do as much manual work and can learn new skills. For the longer term, manufacturers must tap into resources from the retiring generation of baby boomers, develop in house training and apprenticeship programs, and focus on building human-machine collaboration. Manufacturers need to keep in mind that skillsets are also changing due to technology and different jobs will be created after they go digital.
Achieve Customer-Centric Manufacturing
Traditional manufacturing has been an “engineering-led” and “ship and forget” approach – especially when it comes to customer interactions. Cost concerns usually dictate production more than the customer experience. This is beginning to change industry-wide and early adopters and laggards are all following suit to keep up with the competition and deliver a positive customer experience both at the point of sale and after the sale.
Manufacturers are using digital tools and the power of technology to include customers early in the design process and more closely collaborate with sales and field teams. Customer specific demands indirectly control which process gets scheduled in the pipeline and when products are produced. This means fragmentation of the production process and delivering specialty products as customer demands are shifting in the industry.
Going digital allows manufacturers to become customer-centric in all stages of production and sales cycles, from beginning to end.
Gain Real Time End-to-End Visibility
This has always been a critical requirement in any industry. Data is dispersed across the organization, which inhibits cross-team collaboration and visibility. End-to-End, cross-organizational visibility is key to making more informed decision at the right time.
With the move to digital, most organizations have automated processes and digitized information allowing for real-time visibility and insights. This move provides numerous benefits, including freeing-up production capacity, reducing stock-outs and driving down costs. With the proper information, leadership teams make qualified data-driven decisions that drive improvements for the organization and an improved customer experience.
Industry 4.0 is reinventing how Manufacturers conduct business and most are going digital to stay ahead. This isn’t a surprise since top performing companies are now focusing on the customer experience, meeting growing customer demands, and navigating a shortage of trained labor. Going digital can solve all these challenges – and many more. For more detailed information on our experiences with manufacturers in the digital age, check out our client stories or contact us to achieve true digital transformation in 2019.