Digital Transformation in Manufacturing
Though its reputation as a buzzword is not entirely new, “digital transformation” has recently acquired a whole new dimension and urgency for this concept to become reality. Transforming manufacturing and procurement processes are no longer just “nice to have.” Recent events (think the pandemic and supply chain disruptions) have made the digital transformation a crucial business imperative. According to the 2021 Digital Transformation Assessment Study by IBM, 67% of manufacturers have come to terms with the necessity of digital transformation and accelerated their digital projects post-pandemic. The 2021 State of Manufacturing Report by Fictiv reveals a similar dynamic, with 77% of survey respondents saying that they perceive their increased investment in digital transformation as significant or dramatic.
Indeed, the COVID-19 pandemic has shown that neither manufacturing enterprises nor supply chains were very resilient, a status that requires immediate fixing. The data from the above two reports shows strong demand for speed, quality, and resilience. With many lamenting the challenges of sourcing, onboarding new vendors, or managing feedback loops with partners, it has become crystal clear that the integration of business processes and digital technologies can no longer be postponed. The digital revolution is happening now.
What Is Digital Transformation in Manufacturing?
Digital transformation in manufacturing implies integrating digital technologies into processes (products and services) to increase manufacturing efficiency and quality. Digital transformation enables full quality and environmental control, reduces costs, and creates an overall better product.
What Are the Benefits of Digital Transformation in Manufacturing?
Changing customer expectations and increased competition are often cited as the main drivers of digital transformation not only in manufacturing, but also in other industries.
Throughout the pandemic, manufacturers faced many operational challenges that illuminated multiple weaknesses in their existing processes. For instance, not having real-time data about inventory resulted in manufacturers’ inability to respond to supply-demand shortages and spikes in a timely fashion. However, those who employed innovative technologies and digital manufacturing platforms not only survived the disruptions, but were able to significantly benefit from them during that time.
Even if altering your manufacturing business during the pandemic proved impossible, it’s never too late to catch up because, as mentioned, the benefits of digital transformation are massive.
First, a digital transformation means increased efficiency. By digitizing production processes, businesses can eliminate errors and waste, which leads to faster production times and improved product quality.
Additionally, digital manufacturing can help businesses better utilize their resources. For example, by using data analytics, businesses can optimize their production schedules to minimize downtime and maximize output.
Another key benefit of digital transformation in manufacturing is reduced costs. By automating production processes, businesses can reduce their labor expenses. Additionally, digital manufacturing can help businesses identify opportunities for cost savings in other areas, such as energy and raw materials. Less material consumption is incredibly positive for the environment, which means that digitization indirectly upholds eco-positive practices.
Also, as mentioned, digital manufacturing can help businesses improve their supply chain management. By using digital tools, businesses can track inventory levels and production schedules in real time, which can prevent stockouts and disruptions.
Finally, digital transformation in manufacturing can improve customer satisfaction. By digitizing business processes, enterprises can provide their customers with more transparency into their operations, improve customer experience, and tailor products to meet customer needs.
Key Technologies and Trends That Enable Digital Transformation in Manufacturing
Machine learning (ML) and artificial intelligence (AI)
AI, ML, and advanced analytics are cornerstones of most digital transformation applications in manufacturing. The terabytes of data that flow through the factory floors give organizations massive leverage that can be employed in the research and discovery of methods to reduce costs and improve capacity and throughput.
Some notable examples of AI use in manufacturing include:
- Defect detention: By imbuing existing defect detection systems (which oftentimes rely solely on human intervention) with AI with its self-learning capabilities, manufacturers save countless labor hours required for quality control and drastically reduce the number of false positives.
- Quality assurance: By installing cameras at key points along the factory floor, the sorting of bad versus good items can happen automatically, thanks to the image processing algorithms that can validate the quality of produced items on the fly.
- Assembly line integration and optimization: By creating an integrated application that pulls data from the network of all connected IoT devices and layering it with AI, manufacturers can get a holistic picture of what’s happening on the assembly lines and respond to incidents accordingly.
- Generative design: AI can help organizations design new products and generate new design alternatives. Moreover, by using ML, these generative design algorithms can test each new design interaction and improve upon it.
Augmented reality / virtual reality (AR/VR)
According to the research by PwC, AR/VR in product and service development could deliver a $360 billion GDP boost by 2030.
Applications of AR/VR in manufacturing include:
- Rapid prototyping and product design: AR/VR allows engineers and designers to work together remotely and virtually while using digital visualizations to create new products quickly and efficiently.
- Inventory management: AR/VR can improve the handling of various issues within the warehouse floors, including navigation and order picking. For instance, various warehouse issues or the precise location of objects can be projected onto the workers’ headsets, providing them with hands-free navigation toward the aisle that needs their attention.
- Maintenance: AR/VR tools allow workers to practice critical and complex maintenance skills in a realistic, but safe environment, which significantly reduces maintenance times and learning curves for field workers.
A digital twin is a digital representation of a physical object such as a device, which allows engineers to make model-driven decisions. Digital twins can be used in product development, design customization, shop-floor performance improvement, and logistics optimization. Another application of digital twin technology is producing a digital twin of an organization (DTO), which refers to a virtual representation of an entire business. DTO enables business leaders to gain insights on prior performance, future expectations, business goals, models, processes, and so on.
Manufacturing digital commerce platform
A true digital transformation in manufacturing can’t happen without the right ecommerce platform. Implementing a solid ecommerce platform provides the firm digital foundation that businesses need to digitize and integrate different business processes and connect with their customers online. Good ecommerce platforms offer a number of features that are essential for digital manufacturing, including data analytics, real-time inventory management, order management, shipping, and order fulfillment logistics.
To find the most efficient ecommerce platform for your business, it’s important to do extensive research and compare different options. When you’ve found a platform that offers all of the features you need, you can start digitizing your production processes and connecting with your customers online.
Virto Commerce is an ideal platform for a manufacturing business. It has all the essential B2B features right out of the box, and is easily modifiable, composable, and scalable.
If you want to learn more about Virto Commerce and how it can help your manufacturing business, schedule a demo or contact us.
Manufacturing is evolving. What was once a process that relied on physical production lines and human workers is now being reimagined in the digital age. A digital transformation in manufacturing has a number of benefits for businesses, including increased efficiency, reduced costs, and improved customer satisfaction.
This is a digital world and those who don't get on board will be left behind. If you want your manufacturing business to stay relevant and competitive, the time to start digitizing your processes is now.