What a Successful Digital Transformation Means for Industrial Manufacturers and Distributors 

Historically, the industrial sector has been relatively slow at adapting to change, be it new trends or technologies. Digital transformation isn’t an exception. This cautious approach stems from the complexity of industrial operations, stringent regulations, and reliance on legacy systems. 

However, with the emergence and rapid advancement of new technologies, such as artificial intelligence (AI), the Internet of Things (IoT), cloud computing, and big data, industrial manufacturers and distributors often find themselves among the most exposed to and impacted by these changes. Nowadays, digital transformation of the industrial sector isn’t an option, but an imperative, essential for improving operational efficiency, optimizing supply chains, and delivering superior customer experiences.  

A few years ago, digital transformation for industrial companies was still considered an option that could be put off until a later date. Nowadays, it’s an outright necessity for the business’s survival.  

Expedited by the global pandemic, digitalization became a standard that the majority of industrial enterprises have either tapped into or are actively prioritizing right now. According to Deloitte’s report on digital transformation, organizations that were most digitally advanced boasted a 45% net revenue growth compared to 15% growth for companies with the least digital maturity. 

Today we will be exploring what digital transformation entails for the industrial sector, map out the key steps to a successful industrial digitalization, and outline the ecommerce solutions must-haves to unlock maximum potential from the transitional period and future-proof operations.  

External factors (global health crises, trade wars, and protectionism) coupled with tight margins and growing competition create a tough situation for manufacturing and distribution enterprises. However, despite everything, the industry is doing well and is projected to surpass USD $20 trillion by 2031.  

The smart manufacturing market that employs technology such as AI, data collection, and automation to optimize and enhance production is forecasted to reach US $319 billion by 2030, indicating the industry’s trust in adopting to the changing industrial landscape through digital transformation. Industrial distribution is on track to reach USD $7 billion by the end of 2025, and the global packaging market is expected to reach USD $1.4 billion by 2032. The global machinery and equipment sector was valued by Allianz at a staggering US $280 billion in 2024, and Statista projected an annual growth rate of 1.24% from 2025 up to 2029.  

Recent economic turmoil, tariff threats, and supply chain fragmentation add pressure on industrial enterprises, testing their resilience and change management strategies.  

• Supply Chain Fragility and Margin Pressure: Global tariffs, trade wars, and other protectionism measures are increasing pressure on the supply chains that are already burdened by the pandemic aftershocks and political conflicts across the world. Congested ports and unreliable suppliers create delays and push down the margins for the already low-margin enterprises.   

• Inflexible and Rigid Legacy Systems: Aging infrastructure blocks innovation and prevents the implementation of new models, such as D2C or B2B marketplaces. Rigid platforms fail to provide necessary functionality and prevent integrations with third-party solutions.   

• Rising Customer Expectations: B2C sector heavily influences B2B operations, and industrial companies are now expected to provide similar experiences, including real-time pricing, inventory data, and personalized portals with order tracking and history. Mobile-first services are becoming essential in field-heavy industries, such as HVAC and packaging.  

• Compliance and Security: Globally, regulations on traceability and certification are rising, forcing manufacturers to track, store, and report data on raw materials. In addition to that, new strict measures for sensitive data protection are introduced to protect B2B transactions, including contracts and pricing. This creates constraints for enterprises that are early in their digital transformation process or still rely on manual and paper-based workflows.  

• Expensive Replatforming from Rigid Systems: Vendor lock-ins slow upgrades and limit innovation, putting the industrial sector at risk. Platforms that were introduced years ago no longer serve the purpose as they either lack automation instruments, don't have seamless integration paths (API), or fail to support multi-brand multi-regional storefronts. Migrating off outdated solutions is costly and time-intensive and requires significant change management measures. 

In complex industries, such as manufacturing and distribution, digital transformation isn’t a quick process.

Years, decades, and sometimes hundreds of years of operation result in versatile legacy systems that often dictate the future development strategy, how operations are designed, and the way workflows are built. At some point, the outdated existing infrastructure and tailoring goals and execution to this infrastructure resulted in missed opportunities, hindered growth, and lost market shares.   

Consistent and well-thought-out implementation of industrial digital transformation helps eradicate the negative consequences of legacy solutions and workflows.  

Example 1: Manufacturer of Protective Closures and Masking Devices  

Global manufacturer of plastic protective closures and masking devices with 1.8 million SKUs and over 40 000 products was running its own ecommerce store on a legacy platform. Serious performance issues led to inadequate search management and a drop in customer experience. The products’ complexity and the business expansion forced the company to reexamine the viability of the existing setup. 

The implementation of a robust Virto Commerce platform helped the manufacturer swiftly integrate the ecommerce solution with their new ERP and PIM systems. The catalog with 1.8 million SKUs migrated fully too, unlocking advanced search options, easy navigation, and SEO optimization. The client has fully replatformed to Virto’s Commerce Innovation Platform within a year, and the ecommerce platform now covers 2% of revenue, with plans to reach 10% in the next three years.  

Example 2: Parts Manufacturing 

Japanese manufacturing company relied on manual handling of orders for parts at the molding factory. Customer orders were received and then uploaded to a separate software for molding process forms. This created inefficiencies, and error risks, and made real-time monitoring and cross-department coordination nearly impossible. A centralized workflow solution was introduced to combat inefficiency and other issues arising from the manual process.  

As a result, the client turned into a digital industrial company, streamlined its order processing and fulfillment, and reduced lead times. The number of errors dropped, and real-time updates led to lower operational expenses.  

A company’s growth and scaling stems from a combination of factors, especially in complex industries like manufacturing, packaging, or distribution. At the same time, digital industrial transformation is often either a direct reason for or a facilitator of business growth.  

• Digitized and automated workflows reduce errors, optimize resource allocation, and minimize downtime. For instance, AI-powered predictable maintenance extends asset lifetime by preventing costly breakdowns.  

• Supply chain end-to-end visibility powered by digital transformation helps industrial enterprises respond to fluctuating demand and disruptions more effectively. Ecommerce solutions allow seamless coordination between customers, distributors, and manufacturers. This translates to higher order accuracy and reduced fulfillment timeframes.  

• Broader customer base and new revenue streams are created as a result of digital transformation. With a powerful ecommerce platform, manufacturers can explore the direct-to-consumer (D2C) model or cater to smaller partners with self-service portals, order automation, and advanced pricing structures.  

• Personalization in interface, pricing and discount structure, and order terms for various buyer groups enable industrial organizations to maximize their profits while providing customized service and excellent customer experience. De Klok Dranken migrated from its legacy system in only three weeks and was able to cater to 3500 clients with tailored product offers and unique prices and conditions. 

• Industrial businesses have little room for error and the scale of operations puts pressure on every decision made. Digital transformation reduces the guessing factor and enables data-driven decision-making. Transparency throughout the supply chain and real-time data on inventory make production scheduling and demand forecasting a swifter process, helping reduce waste and get actionable insights from the analytics provided. General Motors failed to keep up with shifting market preferences, leading to the company’s eventual bankruptcy as they were unable to cater to their customer base that wanted smaller, more efficient vehicles. Having access to extensive and accurate data on inventory and sales would be a way to predict and mitigate the drop in sales and avoid the collapse. 

• Industrial digital transformation offers a wide range of instruments and tools for manufacturing, packaging, distribution, and electronics enterprises. Most importantly, it future proofs the organizations. Real-time data, a deep level of customization and transparency, and the ability to implement new modules on demand make businesses more competitive and resilient to the ever-changing industrial environment.  

Unsurprisingly, increased operational efficiency is one of the most distinct benefits that digital industrial transformation provides.

The integration of technologies and digitalization of manual processes result in overall process optimization. Replacing or eliminating unnecessary tasks with more efficient processes ultimately leads to cost-effective production, whereas using technology instead of manual labor allows for more accurate calculations and, in turn, better budgeting.

Digital transformation initiatives also increase the company’s overall flexibility and responsiveness. If there’s a problem at a production facility, responsible parties receive an automatic warning so they can deal with the problem as soon as possible, which dramatically reduces downtimes.  

As a result, repairs, modifications, and maintenance occur less frequently and are largely automated. Also, smart technology allows devices to interconnect and communicate machine-to-machine, which, in turn, enables decentralized and independent decision-making where a physical entity doesn’t necessarily have to be present. 

Another clear benefit of digital transformation in manufacturing or distribution is the ability to build decentralized production and management. 

Fully remote working systems enable production to go on even when the rest of the business is on pause. Digital instruments, such as IoT, remote monitoring, cloud computing, and collaborative platforms facilitate remote and decentralized operations and communication.  

This means that the production process isn’t tied to a single physical location, and people aren’t required to always be on site. In times of global pandemics, natural disasters, and volatile economic situations, industrial companies that invested in digital transformation and adopted its principles are more likely to secure uninterrupted workflows.  

Automated processes don’t require tight human supervision, remote connection ensures employees can access systems no matter where they are, as well as collaborate and make decisions without sitting in one meeting room.  

Case Study: Digital Transformation at Acme Industries 

Acme Industries is a manufacturer of precision machined components for industrial, commercial, aerospace, and military markets. The company faced an inefficient supply chain, dated legacy systems, and growing competition from newcomers and innovators.    

To address these challenges and preserve itself, the company chose to go ahead with the digital transformation strategy and implemented a number of changes. AI and ML were integrated into production lines to optimize operations and predict issues and trends the switch to cloud-based software helped teams collaborate better, scale faster, and improve data accessibility and transparency.  

As a result of comprehensive digitalization measures, Acme Industries increased production speed by 30%, reduced operating costs by 20%, and cut down machine downtime by 25%. All that became possible thanks to technology-fueled decentralized production. 

More Examples of Decentralized Production in Manufacturing and Distribution 

1. Haas Automation—a leading machine tools manufacturer, particularly for Computer Numerical Control (CNC) machines—developed a mobile application for remote monitoring of customers’ MyHaas-enabled machines. This allowed users to keep track of the equipment remotely, get real-time notifications, and resolve any issues faster.
2. 3M—an industrial manufacturer with a versatile portfolio of products—used digital transformation to connect its 200+ plants to streamline and standardize production across all sites.  
3. Siemens—industrial giant specializing in automation and electrification—implemented the digital twins’ technology to implement decentralized control of its manufacturing sites, giving them access to production and reducing downtime in periods of lockdowns and limited access to plants.   

Implementing digital transformation is all about reshaping how companies build and manage workflows and engage with customers. In complex B2B industries, such as manufacturing and distribution, digitalization becomes a leading way to elevate operations, so they sustain upcoming challenges and changes, and help the business grow, expanding to new markets while maintaining efficiency and transparency.

Central to the digital transformation journey is the adoption of a robust and modern ecommerce solution that unlocks the company’s full potential and empowers it to: 

• Overcome vendor lock-ins and legacy system limitations.  
  Being stuck with a platform that no longer serves your purposes is an enormous business risk for the industrial sector. API-first ecommerce solutions that are designed for complex B2B scenarios allow integration with third-party services and replace or extend existing functionality (add a marketplace for vendors, custom contract builder, AI-driven recommendations, or multi-tenant storefronts) without costly replatforming of the entire infrastructure and help gradually migrate from legacy systems.   

• Ensure seamless scalability and flexibility for future growth.  
  The industrial sector’s complexity is often the stopping factor for potential expansion and growth. An ecommerce platform reduces the friction and facilitates communication between departments, sites, and partners through real-time inventory visibility and multi-level account structures.     

• Provide an elevated omnichannel customer experience.  
  Modern ecommerce platforms offer a single solution for multiple channels helping the industrial sector manage B2B, B2B2C, and D2C channels seamlessly through one console and provide a consistent experience across all digital touchpoints. Omnichannel experience powers deep personalization for industrial customers. Tailored product catalogs are available based on contracts and customer roles, along with custom pricing and discounts. 
  Solutions like Virto Commerce offer customer-type-based workflows, enabling manufacturers to create personalized workflows for distributors, end-users, and other customers. 

• Experiment with new business models without friction. 
  Composable ecommerce software creates a low-risk experiment-friendly environment for industrial enterprises. Distributors may want to add new fulfillment partners during peak seasons and introduce a partner portal or test new pricing and discount models.  
  Modular, atomic architecture of Virto Commerce allows companies to select, implement, and swap components whenever business needs change.  

• Maximize the use of rich content to streamline sales and order flow. 
  Heavy equipment, robot control systems, sensors, parts for assembly lines, chiplets, and other industrial products are complex, come in a variety of options, require certifications, and even fall under regulatory norms. Ecommerce platforms assist with product selection and purchasing processes through flexible content management options. Customers can research and select products at their own pace and make orders without engaging the vendor.  
  Virto Commerce supports detailed product information (3D, models, videos), integrates with third-party content and product management software, and offers advanced search (full-text, customizable relevance tuning, understanding intent, search analytics) across all transactions and documents.   

• Stay compliant with a multitude of laws and regulations. 
  The industrial sector is going through a rapid compliance transformation too. Ensuring your operations are aligned with regional standards is complicated because it requires full traceability of products, sourcing, and even customer and partner interactions, as well as meticulous data management. Ecommerce platforms support compliance with detailed data storage and protection (GDPR, PCI) reports and dashboards with segmentation by partner or customer groups, SKUs, location of origin, and other filters.  
  Virto Commerce supports on-premise deployment that meets data locality requirements, supports data encryption and robust user authentication, and provides audit trails and logging capabilities.  

Modern ecommerce platforms are not only sales channels but foundational solutions that enable and carry industrial digital transformation, empower manufacturers and distributors to keep up with changing market conditions and customer expectations, and scale sustainably, future-proofing their business for decades to come.  

Total investments in digital transformation are estimated to exceed US $1 billion by the end of 2025. However, despite the digital transformation market growing fast, the industrial sector is still largely far from being digitally mature. 

One of the most pressing issues in digital transformation initiatives, besides the complexity of the process and the resource constraints of enterprises pursuing it, is waste.  

Many companies are unprepared for the change that digital transformation brings. That entails them not having a reliable long-term digital transformation strategy or a defined roadmap to embark on the digital journey. As a result, they spend invaluable resources on initiatives that do not bring them closer to the desired outcomes.  

Successful digital transformation goes beyond technological upgrades.  

The roadmap to digital transformation for the industrial sector needs to be precise and clear, but it doesn’t have to be overly complicated. Below is our proposed adaptation of McKinsey’s six building blocks of digitization for industrials.  

1. Create a Transformation Plan. 
   Outline the goals, timelines, KPIs, and how the transformation aligns with the company’s long-term vision. For instance, a marketplace would support a manufacturer’s D2C expansion plan. 
2. Consider Impact on Others. 
   Assess how the change will affect all stakeholders (employees, customers, suppliers, distributors). Engage these groups in early discussions to gather feedback and build buy-in. Early-day feedback will help optimize the process, avoid waste, and ensure a smooth transition.  
3. Upskill Existing and Hire New Talent. 
   There will be skill gaps with digital transformation, and timely assessment of capabilities and training programs will help bridge the gap, reduce change-induced staff anxiety, and maximize the potential of new technology. Konecranes, a lifting equipment manufacturer, upskilled the workforce on agile methodologies and digital tools and recruited data scientists and software developers to drive innovation. 
4. Adopt the Agile Approach. 
   Agile fits well with digital transformation as it facilitates continuous improvement, rapid prototyping, and iterative development. Contrary to what more conservative market players may be used to, Agile promotes a feedback loop where teams react quickly to change, implement it, seek feedback, and improve further. This accelerates innovation and adoption of new trends and technologies and helps meet market expectations.  
5. Shift to Modern Technology. 
   Embracing new technologies and choosing innovative solutions ensures the company doesn’t miss out on the full potential of digitization. IoT is widely introduced in industrial digital transformation as it enables remote machine monitoring and enhances real-time data, which helps companies optimize the production process without relying on on-site inspections. Ecommerce platforms with complex catalog management functionality, as opposed to basic catalog features, allow next-level content personalization for different customer groups, limited access, and a variety of content formats, all helping customers make the purchasing decision faster and reduce the rate of returns. 
6. Drive adoption.
   Strong leadership, open and clear communication across all stages, and ongoing support will be the keys to successful digital transformation. Industrial businesses that track progress, celebrate wins and address resistance early on secure more efficient and smooth transitions. Aker BP—an oil and gas company—came up with an “agile factory” where they gathered cross-functional teams and leadership to help build a culture where continuous improvement is celebrated and digital adoption is widely accepted across the organization.

One thing about implementing digital transformation that is often overlooked and turns into an issue for many manufacturers is the failure to acknowledge how the company’s transformation affects relationships with stakeholders.  

As a result of the transformations, some processes and potential roles will become obsolete. At the same time, new roles within the company will be created along with brand-new workflows.   

The same applies to external stakeholders, such as distributors.  

• Determine the role of distribution with the new digital channels. Will the business still have distribution or go D2C? How will distributors be placed in the new omnichannel workflow? 

• Decide on partnership levels and whether part of the distributors will have access to the company’s ecommerce platform to view analytics or perform any other actions.

• Negotiate new partnership terms and conditions.

• Decide how to pair customers and distributors. Determine whether to encourage relationships with distributors. Develop a pairing logic that might be based on a customer’s location, order volume, or any other particular criteria. 

Ecommerce software is the heart of digital transformation for manufacturing and distribution. Below are examples of market-leading companies’ digitalization with Virto’s Commerce Innovation Platform.  

De Klok Dranken—the top Dutch beverage wholesaler —needed a self-service customer portal to streamline ordering, billing, and checkout but couldn't implement it with their legacy monolithic ecommerce platform. The company required a seamless transition with the preservation of existing functionality and looked to provide the highest level of user experience for its customers.  

The B2B-native, headless Virto’s Commerce Innovation Platform (CIP) was implemented and, as a result, De Klok achieved the following results:  

• 80% of partners embraced the platform. 

• Previously mandatory separate scaling efforts were discontinued.  

• Customers gained personalized access to information based on their agreements. 

• Vendors gained the possibility to monitor their products’ performance.  

• Advanced personalized promotions were introduced through the platform.  

Curious to find out more about De Klok’s digital transformation? Download the full case study today! 

The Canadian aircraft manufacturer was going through a restructuring and took this opportunity to uplift their aftermarket customer experience with a portal. The manufacturer also required a solution that could handle complex permissions, account structures, and integrations. The replatforming from a monolithic legacy system and data transfer presented a challenge. 

Virto Commerce introduced its ecommerce solution with Virto Atomic Architecture™ and complex permissions. An MVP was delivered in less than 12 weeks, including data migration, replatforming, and portal launch. As a result, the customer: 

• Replatformed from a monolithic legacy system. 

• Fully completed data transfer. 

• Introduced advanced integrations. 

• Tracked radical improvement of customer experience. 

• Implemented complex account and permissions structure. 

Ready to launch your digital transformation journey, replace, or modernize your legacy platform with a powerful ecommerce solution? 

Virto’s Commerce Innovation Platform isn’t adapted to B2B needs. It is specifically designed for industrial-grade and complex B2B and D2C commerce.  

• Atomic Architecture™ enables granular scaling: Add and scale capabilities incrementally with minimal disruption. 

• Advanced contract handling supports your business model: Manage regional agreements, multi-tier pricing, and partner contracts with ease. 

• Digital catalogs process hundreds of thousands of SKUs at top-level speeds: Handle complex product hierarchies, technical specs, and configurations. 

• Live inventory visibility: Get real-time stock updates, location-based fulfillment, and predictive availability across warehouses. 

• Seamless ERP and MEs integration: Connect directly with existing manufacturing and planning systems to automate order flow, inventory updates, and production triggers.  

• Account-based commerce with delegated buying roles: Empower enterprise clients with complex organization structures, budgets, and approval workflows.  

Schedule a demo call with Virto experts to learn about the ways Virto can facilitate your industrial digital transformation. Identify your next steps and growth opportunities, take a first step towards a more resilient future, and transform your business into a digital industrial company.