Manufacturers have been wrestling with digital transformation for a number of years. As a Deloitte report put it “Smart factories will be a game changer for the manufacturing industry. They could potentially ignite stalled labour productivity and unlock the key to productivity.”
To be fair, it is not that manufacturers do not see the benefits of having digital production processes and factories; the challenge is implementing it. Decisions on new initiatives would take many months, if not years, as committees discussed and considered, and business units had to make the case for new investment in digital tools and projects.
The pandemic as transformation catalyst
That all changed when the coronavirus pandemic upended everything. As businesses scrambled to keep operational, those manufacturers that had reached a degree of digital maturity were able to react faster than those that had been unconvinced of the merits of transforming.
Even so, everyone has had to change how they work, no matter how far along their digitisation journey they were. With new rules on social distancing and enhanced levels of hygiene, factories need to come up with new ways to maintain production, all while dealing with the increased potential of short-handed shifts and the spectre of having to isolate whole teams in the event of a virus outbreak.
This has led to an acceleration in digital implementation projects – our latest eFax survey found that across industries 60% of IT decision makers are accelerating the speed of their transformation projects as a direct result of the disruption the pandemic wrought on their workforces. In manufacturing, those initiatives might include the ability to have complete visibility over all operations, digital twins, and the means to manage shifts and rota in an agile manner. Indeed, a McKinsey study found that “39 percent [of manufacturers] have implemented a nerve-center, or control-tower, approach to increase end-to-end supply-chain transparency, and around a quarter are fast-tracking automation programs to stem worker shortages arising from COVID-19.”
It’s little wonder that 77% of our respondents would have accelerated digital transformation sooner if they were aware of the full impact it could make on their organisation in just a few months.
Overcoming obstacles to building futureproofed factories
But what stopped them before? Based on the survey, there were five key factors: a lack of budget, low levels of leadership buy-in, siloed departments, restrictive vendor services, and a reliance on legacy systems and processes.
What’s interesting about these challenges is that they are predominantly cultural. As manufacturers implement their post-pandemic plans, they need to consider how they ensure these obstacles are tackled.
When it comes to leadership buy-in, most manufacturers will now have evidence that properly funded digitalisation projects can deliver immense value. However, it’s important to remember that the decisions made in March and April were crisis-focused; now they need to be about futureproofing. What are the cultural changes that can be implemented so that siloed departments will never be a block on accelerating transformation? How can they maintain productivity and output in a working environment governed by increase restrictions such as social distancing, mandatory personal protection equipment and enhanced hygiene measures?
Clearly, having secure, online connectivity is going to be critical, as is the ability to share, review and collaborate on documentation, blueprints and files between head offices and disparate factory and manufacturing sites. But it needs to be in a manner that can be accessed from any location, whether it’s in an office, on the factory floor or at home, and on any device, potentially even incorporating contactless technology to reduce the spread of infection.
As part of this, manufacturers need to also be careful with who they select as their technology service providers. Vendor lock-in, an inability to integrate with other systems or burdensome payment terms that stifle scalability will not support businesses that want to be able to quickly adjust production outputs in the coming months and years.
Finally, there’s the question around what to do with legacy IT. Many manufacturers have systems that can’t simply be digitised or lifted and shifted to a new environment. Finding a way of still being able to use those applications, while transforming the rest of the organisation, is going to be needed if the relics of investments from two decades ago are not going to hold businesses back.
The post-pandemic transformation
The message from IT decision-makers is clear – accelerating manufacturers’ digital transformation is possible with the right support in place. First and foremost, that’s financial, and it’s driven from the top down. What organisations now need to do is ensure that they overcome the cultural obstacles holding back progress, maintain productivity irrespective of local restrictions, and make decisions that will futureproof their operations to tackle whatever happens in the coming months and years.
