The language surrounding digital transformation is growing increasingly more confusing and self-contradictory. We heard that the future of digital transformation in manufacturing lies in eCommerce.
Although it may be true, a data-first approach to business transformation can often yield several unexpected results, not just dramatic performance improvements.
How does digital transformation reflect on business models today? Is it even possible for manufacturing companies to compete? Keep reading to learn more.
What does digital transformation mean in manufacturing?
Digital transformation is implementing new technologies that can affect your business strategy, processes, and operations. It's not just about technology; it's about making a change.
Digital transformation is about the future.
Shifting from analog to digital benefits include improved productivity, increased revenue streams and growth rates, better customer service, and an overall better customer experience.
Manufacturers are no different from most other industries regarding the benefits of digital transformation. The following are just some ways that a manufacturer can benefit from this trend:
- Reduce costs by automating manual processes and improving efficiency in operations
- Increase revenue through increased sales volume or increased average order value (AOV) thanks to improved customer satisfaction and loyalty due to better products/services offered online directly through manufacturers' websites instead of third-party retailers.
You'll need to ensure that you're prepared for changes in your customer base and employee population—and how they expect to interact with your company.
Overall, it’s all about using technology to elevate operational efficiency.
Not using technology to enable your supply chain is a missed business opportunity
If you have ever taken the time to watch a manufacturing company's supply chain in action, you may have noticed that there are some common denominators. These include a team of people moving products from place to place, machines and conveyor belts doing their thing, and the finished products going out of the warehouse and into distribution centers.
And while this type of setup is efficient for many companies, it doesn't serve as an example of what modern technology can do for your operation.
A company that has implemented technology in its supply chain knows that they need to be able to transport goods efficiently to stay competitive.
However, if they're not using technology with artificial intelligence (AI) capabilities at every step along their path toward success—from planning through execution—they're missing out on opportunities for improvement and growth because they won't be able to manage costs effectively or maximize profits due to inefficient processes being used throughout each stage of production.
Technology's potential to streamline and automate supply chain management is enormous. Supply chains are complex, with many moving parts that must be monitored and managed in real-time. With the help of technology, these operations can be optimized in a way that was impossible before.
If you're not already implementing technology into your supply chain management strategy, here are some reasons why you should:
1) Increase efficiency: Smart software can help your organization move goods more efficiently by reducing human error and automating tedious tasks such as data entry.
2) Improve inventory tracking: Technology enables you to get real-time information about where your inventory is at all times. This lets you know instantly if there's an issue with one of your suppliers or customers—and take swift action if necessary.
3) Decrease costs: Technology can help reduce labor costs by allowing field workers to access information remotely instead of having to travel between locations daily. It also saves money on fuel by cutting down on trips across town or state lines.
4) Reduce risk: By using intelligent software for monitoring shipments, manufacturing companies can identify problems early on and avoid costly delays.
The Internet of Things (IoT) and the future of manufacturing
According to Cisco, 500 billion devices will connect to the Internet by 2030. The Internet of Things (IoT) is a network of devices, sensors, and software that collect and exchange data. IoT can connect devices from the factory floor to the cloud, automating processes and creating new business opportunities.
In manufacturing, this may include ensuring that machines are operating at peak efficiency or controlling multiple production lines across a single factory in real-time.
Further, the IoT helps manufacturers reduce errors by monitoring their processes more closely than ever before. It also helps them identify ways they could be doing things better by collecting data on their current manufacturing processes—and ultimately improving performance for everyone involved.
In the manufacturing industry, many processes can be automated using IoT. For example, an industrial robot can be programmed to perform basic tasks such as picking up objects or placing them on conveyor belts. The robot's movements can be controlled remotely by a human operator or integrated into a smart factory system. This allows for increased productivity and reduced costs.
Another way that IoT can help in manufacturing is by reducing human error: If something goes wrong with an automated machine or process, an alert will be sent out through the network so that someone can fix it quickly before any damage occurs. This prevents costly delays due to mistakes made by employees who need to learn how to fix a problem quickly enough.
Data has become your most valuable asset
Data is the new oil. Data is the new currency. Data is the new gold. Data is the fresh oxygen. Data is the new food. Data is the new water. A NewVantage study found that 46.9% of companies surveyed managed data as a business asset.
You get it: Data has become your most valuable asset, and if you're not planning to capitalize on that fact. The right eCommerce platform can help to filter and analyze that data to ensure you give your customers what they need when they need it.
Data is the fuel that powers today's economy. It helps manufacturing companies make better decisions and grow their businesses, so they're willing to pay more. The more data you have, the more valuable your company becomes.
Consolidating systems makes digital transformation more accessible and faster
Digital transformation is easier and quicker when you have fewer systems to manage, fewer vendors to deal with, fewer people to interact with, and fewer people to train and manage.
This is the idea behind "consolidation," which involves moving from many different applications into a single platform.
For instance, You could move from four ERP systems down to one. Or four various HRIS (human resources information systems) down to one. Or three separate EAM (enterprise asset management) platforms down to two or even one. The result is less clutter, more efficient business processes, and happier workers who can do their jobs better because their jobs aren't so hard anymore.
The benefits of digital transformation for manufacturing?
- Increased productivity.
- Reduced costs.
- Improved quality.
- Improved customer experience.
- Improved safety.
- Improved sustainability.
- Improved compliance (of course!). If you've ever worked in an industry that requires strict compliance with government regulations, you know how much work goes into maintaining those standards! Having digital systems in place can help keep everything running smoothly and save you time and money so your business can focus on what matters most: Making great products for your customers without worrying about maintaining compliance.
What are the challenges of digital transformation in manufacturing?
There are several challenges to digital transformation in the manufacturing industry. One of the most significant issues is cost: implementing new technology can be expensive, so many manufacturers have a hard time justifying it.
Another challenge stems from the fact that not all companies have the right partners to help them through digital transformation. Finally, even when manufacturers understand what they need to do and how to do it, finding enough time within their hectic schedules for anything else can be difficult.
Implementing new technologies can be daunting, but working with the right eCommerce partner can ease that process and help you achieve more.
The manufacturing industry is full of challenges and trends. Still, the importance of working with a partner who understands your business goals and the challenges you face cannot be overstated.
Here are just a few reasons why:
- An eCommerce partner that understands your industry can help you gain new customers. Because they know what their clients want, they can provide the right solutions for their needs. Whether it's increasing sales, reducing costs, or improving efficiency in any way possible – by working together to identify key trends in this space (and how to respond), you can keep up with technology changes and anticipate future demands from customers within your industry.
- An eCommerce partner that understands your needs means more tremendous success for everyone involved. For example: If an order comes through late because no one was available at headquarters when it arrived. That's not good news for anyone involved! This type of thing doesn't happen often, but when it does occur, there is nothing worse than having something shipped back due to late delivery times (or worse yet - never getting back).
Undoubtedly, the world has gone digital, and companies are looking for ways to increase their revenues and cut costs, which are inevitable parts of doing business. There's no end to digital transformation in manufacturing, but there will be some changes that may not always be expected.