The benefits of digital transformation for factories

Manufacturing is experiencing a time of change and challenge. 

As the global economy resets following the Covid pandemic, factories are finding new and innovative ways to respond.

First among them is retooling for a digital-first future.

To avoid being stuck with 20th Century methods to tackle 21st Century problems, now’s the time to adopt digital transformation.

In this blog, learn;

What is digital transformation?

Digital transformation is the process through which businesses use technology to modernise their workflows and operations.

Essentially, it’s the movement from analogue systems to connected, digital systems.

It’s a term that gained increased prominence during the Covid pandemic, as businesses across every sector sought to respond to the closure of physical workspaces and a disrupted market.

The ‘transformation’ can be sudden or gradual; partial or complete.

Ultimately, it depends on your industry, your objectives, your budget, and your level of patience.

As consumers, we see the effects of digital transformation every day in how we shop, organise our lives, and relate to the world around us.

So how does this relate to the manufacturing industry?

Digital transformation and manufacturing

Manufacturing is relatively under-digitalised as a sector.

According to a 2022 survey, only 24% of manufacturing firms had a digital transformation strategy in place. 

And while 30% were planning on investing more in digital technology, this left a significant number with no clear vision for implementing digital transformation.

The reasons for this are easy to understand if you work in the sector.

A factory is a complex organism; if one part gets disrupted or underperforms, it impacts the whole body.

This can create an attitude of ‘if it ain’t broke, don’t fix it’, especially if staff and management know the legacy system inside-out.

Combine this with exacting quarterly KPIs and production targets, and proposed change is met with caution and hesitation.

However, there’s never been a more important time to invest in digital technology.

And the reasons are all too familiar.

Why is digital transformation relevant now?

There’s nothing like a crisis to motivate change. And the crisis that gripped the global economy in the wake of Covid-19 was enough to cause many businesses to rethink how their processes function.

The crisis revealed complex supply chains at risk of collapse, a more demanding consumer, shortages of labour and materials, and the difficulty of maintaining profitability and sustainability in an inflationary economy.

So what does ‘digital transformation’ promise?

Basically, greater control.

The more your systems are connected and observable, the greater your ability to control and improve them.

When external factors are against you, your ability to manage and optimise your operations becomes even more important for maintaining profitability.

That’s why now is a particularly urgent time to understand why investing in tech will pay off.

Let’s look at the 5 clearest benefits of digital transformation for manufacturing.

5 key benefits of digital transformation for factories

Reduced costs

By introducing new digital systems, you replace antiquated, costly methods that drain efficiency.

A well-optimised digital system in some areas should free up workers’ time, leaving you less dependent on middle management.

Overall, a connected system throughout your plant will help you predict costs and reduce them. It’s the primary reason factories adopt digital transformation.

Investment in tech tools might take some time to bear fruit. But as Deloitte uncovered, firms with a higher digital maturity have better financials in the long-run.

Better oversight

If your data can’t be easily observed and analysed, it’s no good to you.

Paper-based systems mean that, no matter how much you might try, there’s no way to remove the risk of incomplete or corrupted data.

Digital transformation gives plant management a birds-eye view of the shop floor. It allows workers to see relevant information when they need it on the line.

But the real advantage, and one that could have a significant impact on your business, is the opportunity to make small improvements this data gives you.

Once you can accurately gauge your OEE%, you can also measure and influence the factors behind it.

Reliable information like this is critical for increasing profitability.  

Productivity

Reliable information also allows for a more productive workforce and shop floor.

Command of your data allows you to see where the slack is and correct it. 

Both software and new machinery can play a role here, the former through aiding training efforts, standardisation, auditing and maintenance, and the latter through innovative production technology.

And across a manufacturing network, digital transformation could result in some impressive gains.

According to McKinsey, a 15-30% increase in labour productivity is possible with the introduction of smart technologies across the shop floor.

This is by no means a promise of overnight success. Rather, it’s the long-term effect of upgrading processes.

Responsiveness to customers

The consumer’s demands and expectations have grown more sophisticated. No longer can factories churn out one-size-fits-all products and expect to remain competitive.

Personalisation is a demand trend that’s held firmly over the past number of years. And factories that are rooted to inflexible processes are less able to respond to it.

By embracing digital transformation, and incorporating new systems to learn from and analyse consumer demands and satisfaction, your factory can be more responsive to both the end customer and the rest of your business.

Your factory soon becomes much more connected. And the information you’ll gain from this will help you make better decisions about your production process.

Insights like these could help you sharpen your competitive edge in a challenging market.

Compliance protection

If your information management is digitised, traceable, and easily accessible, you’ll be much safer from regulatory violations.

Documents with owners, stakeholders, and viewers clearly labelled, distributed, and managed will help you keep everything tidy for regulators and auditors.

This will be critical if something goes wrong. And it will be very useful to demonstrate to higher-ups and investors that you’re keeping your house in order.

Having all your training materials, quality standards, procedures, and safeguards available on the cloud through relevant devices will also save you time and create more efficient workflows.

In the end, digitalisation makes the administration and readability of your operations much easier to understand, a great benefit for keeping in line with corporate and legal regulations.

How to get started with digital transformation

This is the golden question. The reason so many factories stall in their efforts to digitalise operations is because there’s no clear path with so many tools and options available.

Here at mlean, we encourage businesses to keep it simple and trust in lean principles. It’s helped hundreds get started on their path to full digital transformation.

If you want to avoid disruption to your lines or confusing your staff, begin by looking at where simple changes from analogue to digital systems would make your overall job of continuous improvement easier.

For instance, think of visual standards. Making these more accessible to line workers through digitisation would benefit associates and supervisors alike.

Similarly, when standardising processes, a digital solution will make rollout through connected systems comparatively seamless.

Robotics, 3D printing, and AI all have incredible potential to make your factory more efficient and profitable in the future. 

But just as important to consider is how software can make your existing processes leaner, more data-driven, and more effective.  

Want to learn more about digital transformation?

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