{"id":3439,"date":"2020-03-03T18:15:19","date_gmt":"2020-03-03T23:15:19","guid":{"rendered":"https:\/\/www.stratospherenetworks.com\/blog\/?p=3439"},"modified":"2020-03-03T18:15:19","modified_gmt":"2020-03-03T23:15:19","slug":"digital-transformation-in-the-manufacturing-industry-adapting-to-industry-4-0","status":"publish","type":"post","link":"https:\/\/www.stratospherenetworks.com\/blog\/digital-transformation-in-the-manufacturing-industry-adapting-to-industry-4-0\/","title":{"rendered":"Digital Transformation in the Manufacturing Industry: Adapting to Industry 4.0"},"content":{"rendered":"

\"robotWe live in a world that\u2019s undeniably changing, as new technologies like smartphones, tablets, the Internet of Things (IoT)<\/a>, the cloud<\/a> and more revolutionize professional processes. Digital transformation<\/a> \u2013 which involves embracing new tech to improve operations and performance \u2013 has subsequently become a top priority for all kinds of companies. Those that don\u2019t adapt are unlikely to survive.<\/p>\n

Naturally, organizations in different industries face unique challenges and considerations related to digital transformation. In a previous blog entry<\/a>, we discussed what the transformation process means for the healthcare industry, including how high-tech tools can benefit both providers and patients, as well as industry-specific challenges to adaptation.<\/p>\n

In this entry, we\u2019ll take a look at another industry that faces significant disruption related to digital transformation: Manufacturing.<\/p>\n

Why Manufacturers Must Transform<\/h2>\n

With technologies like Big Data, analytics, the IoT and more rapidly changing life as we know it, some experts have identified this era as the fourth industrial revolution in human history. Professor Klaus Schwab, founder and executive chairman of the World Economic Forum, has written a book on this topic that\u2019s available via the Forum\u2019s website<\/a>.<\/p>\n

This industrial revolution \u2013 also known as Industry 4.0 \u2013 is a monumental event that\u2019s already having a significant impact on manufacturing. The majority (76 percent) of manufacturers are either working on a smart factory initiative or already have one underway, according to a 2017 report from Capgemini Digital Transformation Institute<\/a>.<\/p>\n

Other key takeaways from the report include the following:<\/p>\n

    \n
  1. More than half (56 percent) of manufacturers have already invested $100 million or more in smart factories.<\/li>\n
  2. Smart factories are projected to yield $28 million in additional operating profits over the course of five years for automakers who qualify as \u201cdigital masters\u201d (i.e., those with robust visions, governance and employee skillsets who are in an advanced digitized production stage), compared to beginners in the field.<\/li>\n<\/ol>\n

    We can already see how manufacturers have increased efficiency with new tech like intelligent Enterprise Resource Planning (ERP) systems, stated industry expert Jason Chester \u2013 director of Global Channel Programs for InfinityQS \u2013 in a 2019 interview with The Manufacturer<\/a>. At the same time, he noted that consumers have become less loyal to brands, so competition is higher than it used to be.<\/p>\n

    Manufacturing companies that don\u2019t embrace new tools and adapt to the digital age could potentially find themselves falling behind in efficiency and productivity \u2013 and losing clients to organizations that do transform. The majority of manufacturers (52 percent) strongly agree with the statement, \u201cEmbracing digital technologies is necessary for survival,\u201d according to a study conducted by Mint Jutras<\/a>.<\/p>\n

    How Emerging Tech Can Benefit Manufacturers<\/h2>\n

    Emerging tech can lead to greater efficiency, productivity and profitability in numerous ways, according to the Sage article \u201cIndustry 4.0: Why you need to invest in it to increase growth<\/a>.\u201d Here are just some of the kinds of technology that manufacturers can use to transform operations.<\/p>\n

    Automation: <\/strong>Robots and automation are already in use in the manufacturing industry, and they have the potential to take on a more prominent role as technology advances.<\/p>\n

    Machine learning:<\/strong> This high-tech tool can offer real-time insights into operations, improve safety, enhance supply chain management and visibility and more. Check out our previous blog entry on \u201c5 Key Ways Machine Learning is Changing Manufacturing<\/a>\u201d for more info.<\/p>\n

    IoT devices: <\/strong>With internet-connected devices, manufacturers can create smart factories and digitized supply chains.<\/p>\n

    Big Data and analytics:<\/strong> IoT devices collect huge amounts of data, which businesses can then use to gain insights into how to improve performance and make better decisions.<\/p>\n

    However, integrating these new tools into the workplace is far from easy for many manufacturers. Similar to organizations in other industries, they must overcome various hurdles during the transformation process.<\/p>\n

    Digital Transformation Challenges for Manufacturers<\/h2>\n

    Only a small number (10 percent) of global manufacturing companies qualify as \u201cDigital Champions,\u201d according to a 2018 study conducted by PwC<\/a>. The researchers defined Digital Champions as viewing digitization \u201cin ways that are far-reaching and aggressively innovative, well beyond mere automation and networking\u201d and showing \u201cmastery of four critical business ecosystems: Customer Solutions, Operations, Technology and People.\u201d<\/p>\n

    Similarly, the Capgemini Research Institute classified only 6 percent of manufacturing companies as \u201cDigital Masters.\u201d Additionally, the Capgemini report found 39 percent of manufacturers report struggling with their smart factory initiatives.<\/p>\n

    Barriers to successfully tackling digital transformation can include the following in the manufacturing industry, according to the aforementioned studies:<\/p>\n