The year of digital transformation
From February issue of NZ Manufacturer
-Adam Sharmer, Senior Partner, Dsifer
If 2023 was the year of Generative AI, 2024 looks set to be the year of digital transformation. A recent survey of manufacturers found that 70% of those surveyed planned to increase spending on digital transformation in 2024.
This is perhaps no surprise as organisations continue to review their operations to improve production efficiency, optimise supply chain and leverage data and analytics to shift to predictive, rather than reactive planning and improvement disciplines in response to high production costs, supply chain instability, workforce challenges and data security concerns.
As industries transition towards Industry 4.0, defining a comprehensive digital manufacturing strategy is crucial, yet 42% still collect most or all of their data using non-digital processes and 63% collect less than half their data using digital processes.
Through our engagement with organisations in New Zealand and the UK, we have identified 10 factors that are critical to the success of digital transformation.
- Clear Business Objectives
Before diving into the world of digital manufacturing, it is essential to establish clear business objectives. Whether the goal is to enhance operational efficiency, reduce costs, or accelerate time-to-market, having a well-defined purpose will guide the entire strategy. Understanding the unique challenges and opportunities of the organisation lays the foundation for a tailored and effective digital manufacturing approach.
- Data Management and Integration
In the digital era, data is the lifeblood of manufacturing. Efficient data management and integration are critical components of a successful strategy. Organisations need to invest in robust systems that can collect, analyse, and leverage data from various sources such as sensors, machines, and enterprise software. This enables real-time decision-making, predictive maintenance, and improved overall visibility into the manufacturing process.
- Technology Infrastructure
Building a strong technology infrastructure is essential for implementing digital manufacturing solutions. This includes investing in advanced hardware such as IoT devices, robotics, and smart sensors. Additionally, organisations should adopt a scalable and flexible software architecture that allows seamless integration of new technologies as they emerge.
A well-designed infrastructure forms the backbone for a future-proof digital manufacturing strategy. Designing a technology infrastructure around a standard framework (e.g. ISA-95) supports integration, compatibility and scalability of the architecture.
- Cybersecurity Measures
With the increased connectivity in digital manufacturing, the risk of cyber threats also rises. Protecting sensitive data, intellectual property, and ensuring the integrity of manufacturing processes are paramount. Integrating robust cybersecurity measures, such as firewalls, encryption, and regular security audits, is crucial to safeguarding the digital ecosystem.
- Skill Development and Workforce Training
The transition to digital manufacturing requires a skilled workforce that can navigate the complexities of advanced technologies. Providing training programs for employees ensures they have the necessary skills to operate and maintain digital systems. Moreover, fostering a culture of continuous learning and adaptability is key to maximising the benefits of digital manufacturing.
- Collaboration and Connectivity
Digital manufacturing is not a siloed effort; it thrives on collaboration and connectivity. Organisations should explore partnerships with technology providers, suppliers, and other stakeholders. Creating a connected ecosystem enhances the flow of information across the value chain, leading to improved collaboration, streamlined processes, and better responsiveness to market changes.
- Scalability and Flexibility
A digital manufacturing strategy should be designed with scalability and flexibility in mind. As business requirements evolve, the strategy should be adaptable to incorporate new technologies and accommodate changes in production volumes. Scalability ensures that the digital infrastructure can grow with the organisation, avoiding the need for frequent overhauls.
- Regulatory Compliance
Compliance with industry regulations and standards is non-negotiable in manufacturing. Organisations must ensure that their digital manufacturing strategy aligns with relevant regulations, certifications, and quality standards. This not only mitigates legal risks but also builds trust among customers and partners.
- Return on Investment (ROI) Assessment
Implementing a digital manufacturing strategy involves significant upfront costs. Therefore, organisations must conduct a thorough ROI assessment to justify these investments. Identifying key performance indicators (KPIs) and measuring the impact of digital technologies on productivity, cost reduction, and product quality are essential for demonstrating the value of the strategy.
- Continuous Improvement
Digital manufacturing is a dynamic field, with technology evolving at a rapid pace. Organisations must embrace a culture of continuous improvement, regularly assessing the effectiveness of their digital manufacturing strategy and identifying areas for enhancement. This iterative approach ensures that the strategy remains aligned with business goals and adapts to the ever-changing technological landscape.
In conclusion, defining a digital manufacturing strategy requires a holistic approach that considers the unique needs and goals of the organisation. By addressing these key considerations, companies can navigate the complexities of the digital landscape, unlock new opportunities, and position themselves for success in the era of Industry 4.0.
