Manufacturing companies that follow the traditional business models face competition from those who apply emerging technologies to their operations. But even though many technological capabilities are available to manufacturers of all sizes, it isn't always easy to move forward with them.
The multiple obstacles to incorporating manufacturing digitalization and creating a competitive advantage sometimes provide a sizable stumbling block. Digital transformation is more than adopting new MES software and other technologies to update your traditional business practices. It's a whole new way of doing the things that are part of your core business.
Also read: Talk about your digital transformation
Organizations taking on the digital-transformation initiative must consider how their employees will react, how it will affect customer relations, how much it will cost and how the change will align with their business goals.
When done properly, digital transformation allows companies to position their business for the future, position themselves to weather the competition and to expand into new areas.
Here are the top five challenges that digital manufacturing poses and the solutions to overcome them:
1. Not enough dedicated IT skills on your team
Digital manufacturing requires a highly-skilled IT team, but, according to a report published in the Cloud Industry Forum, a lack of internal expertise hampers many companies as they go through digital transformation. Hiring skilled employees to build a team is getting harder and harder because of the developing labor shortage.
The report's survey indicates that 40% of respondents believe their companies do not have the necessary skills in-house to pursue new technologies, and that figure rises to 50% among respondents in IT departments.
Most businesses see a digital strategist as their immediate need, and 43% hope to hire one in the next 12 months. Other staff needs to be included:
- cybersecurity expert
- technical architect
- advanced data analyst.
How can businesses combat the lack of internal skill sets and the challenge of recruiting them? One way is to enlist outside expertise. This can come in the form of consultants experienced in providing direction and resources to manufacturers, or software as a service (SaaS) providers can bring significant expertise and be valuable partners.
In the case of SaaS providers, you’re gaining from the collective experience and feedback of the customer base, as well as a team of experts that typically make up a portion of the team. Gaining from others’ experience can pay immediate dividends and help to avoid the learning curves that come with new hires.
2. Your digital transformation strategy is lacking
Companies with a change-management strategy are more likely to meet or exceed their digital transformation goals. Crafting an effective change-management strategy entails planning the project by pinpointing the sources of issues and connecting with employees and stakeholders.
Ask yourself why your company needs to replace the existing legacy systems and manual processes with a digital system. Is there a plan to implement these complex digital systems? Is your company prepared to migrate your present systems into new ones properly?
As a starting point, you should know where there is a need for improvement within the organization and what areas you should upgrade. It would help to determine these things before you even think about implementing a digital transformation project. You can't expect a successful transformation without a well-thought-out strategy.
Digital transformation goes well beyond being a catchword. Still, it gets tossed around without applying a clear definition to it. This scattershot approach results in companies moving forward without a map to show them where they're going.
Get started on a strategic approach by creating a change-leadership team of high performers who are innovative, influential and trustworthy. Your cross-functional team should be formed of employees from various areas of the organization, such as finance, marketing, engineering, sales and human resources.
Your transformation team's primary objectives should be to ensure the process aligns with the company's core goals and focuses on the employee aspect of the changes.
3. Your employees resist change
The cultural challenge of moving to digital manufacturing is significant, and your carefully selected transformation team will partially address it. Workers tend to look down on automation, and adapting to new technologies is difficult for everyone. However, the importance of digitalizing manufacturing relates to them directly.
Mistakes among workers pose some of the universal risks that businesses face. Your workers can set up a machine incorrectly or mishandle a piece of equipment, causing an accident or ruined parts. They forward sensitive information and open unknown attachments.
Digital manufacturing can mitigate this safety, quality and cybersecurity risk. Still, the human workers prone to these errors are the same ones who will oppose the changes that could eliminate them. And new processes and retraining are integral components of a digital transformation, so leaving behind familiar legacy systems and the that's-not-the-way-we-do-it attitude is essential for success.
Successful organizations do not impose change, but, instead, they make it part of a discovery process where workers test the existing strategies and identify room for improvement. As you involve them in the process, they will not only buy in, but will also help select the right tools that will allow them to succeed, as opposed to being mandated to use a solution that may not fit their needs.
The entire organization must be on the same page since the discovery process requires commitment from everyone, from the company leaders to the shop floor and to every department in between.
4. Your customers' needs are constantly evolving
The manufacturing sector is not static, and neither are its customers. Their needs change constantly, and the upheaval created by the pandemic accelerated things. Customers have also become more astute and demanding, and it can be disastrous to assume you know what they want you to provide for them.
Digital transformation is often a complex project that can take years to complete, although that doesn’t mean you can’t see early ROI to prove it’s worth continued investment. Either way, you must consider how you will handle your customers' changing needs during the process. Realizing that customer evolution will likely take place, you need to plan to be flexible when it happens and adopt new digital technologies to accommodate it.
Instead of assuming you know what your customers want or don't want, take the time to perform market research or solicit customer feedback, so you'll know which technologies you'll need to meet their demands. Doing so will help you to avoid unpleasant and expensive surprises.
Many customers are looking for a partnership with their suppliers. To be a good partner, manufacturers must make quick changes to their production process, re-calibrate their equipment, change their raw materials suppliers and conduct staff training. Planning and expecting to be agile is one of the ways to make your switch to digital a success, while ensuring you have happy customers during the process.
5. The costs associated with digitalization can be overwhelming
Your investment plan should consider the cost and benefit of implementing digital manufacturing, including when you will make those changes and how much money you should set aside to prepare for them. As you look at the costs of adding technology, consider the cost of not making the digital transformation, such as not meeting current market expectations and falling behind your competitors.
Without a plan, your efforts to digitalize your manufacturing operations can incur out-of-control investment costs. Implementing digital technology can take on a life of its own. Without careful planning, the project can snowball into something you don't recognize. Some call it scope creep, and it refers to the subtle increases that occur along the way of an extended project. It comes about as manufacturers respond to customization requests and ever-changing customer needs.
Once a plan is in place, you can strategically invest in manufacturing technology to solve targeted problems, delivering ROI benefits for the organization while allowing you to stick to a budget. However, without a strategy to guide you, you're more likely to make decisions resulting in little or no benefit, yet increasing your budget and timeline.
Eric Whitley is senior account manager at L2L. He has 30 years of experience in manufacturing, holding positions such as total productive maintenance champion for Autoliv ASP, an automotive safety system supplier that specializes in airbags and restraint systems, and he is also an expert in lean and smart manufacturing practices and technologies. Contact him at [email protected].