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Social Innovation

Smart manufacturing

Integrating digital technologies into business operations is the best means for a manufacturer to both operate and deliver optimal results to customers. This does not require a complete revolution of company infrastructure, however. In fact, digital transformation is closer and less expensive than people think. Earnings and customer value can be increased via incremental change and by utilising investments that have already been made in both the digital and physical value streams.

Companies that are leading the way in digital transformation see tangible benefits. According to a recent study by Harvard Business School, of the businesses which invest in digital technologies, 49% have obtained better gross margins and 57% report higher net incomes compared to slower moving competitors. Importantly, the evolutionary nature of these changes means that these companies aren’t spending much more on IT than their competitors.

Digital transformation is ultimately all about incremental changes, and these can be broken down into six simple steps that manufacturers can take to drive value across the manufacturing and supply chain.

6 steps to undertaking a digital transformation

1.Set clear goals to create a connected, near real-time operating system

The objective behind adding a digital element to physical assets like machines, known in the industry as building a data bridge between digital and physical value streams, is to know what is happening before something goes wrong.

Predictive analysis is a much more proactive, and thus effective, approach than the reactive strategy of waiting for a problem to occur and then trying to decide how to deal with it.

2.Saving time and money with improved data and real-time analytics

This starts with first identifying the areas of the business that are causing money to be lost and performing a “proof of value” assessment. Areas commonly used for this are the rate that assets are depreciating, and quality issues. Again, predictive analytics are then the key to providing solutions in the form of predictive maintenance, predictive quality and dynamic scheduling.

3.Select proof-of-value use cases that can show wins and create organizational engagement

To win support within the business, a you need to get everybody on-board early and create a company-wide-culture that embraces digital transformation. In order to do this, show the value of the technology to the people who have hands on experience such as with operators, supervisors, production and maintenance.

4.Create a group of senior people who understand and support the digital journey

Again, this step is about creating a culture that is company-wide and transcends not just levels of hierarchy but geographies too. These advisors must therefore include representative leadership, from across offices and locations.

5.Focus on delivering results

The fundamental purpose of digital solutions is to solve business issues and drive real value. If they don’t achieve this, they will fail. Considering again the objective of the digital stream being to prevent problems with physical assets, the business impact and clear return on investments of doing this needs to be demonstrated.

6.Learn from organizations that have embraced digital transformation successfully

Building on the example of others removes a lot of unnecessary teething issues. Strategic relationships with other companies who have been through this transformation and are willing to share their insights will help to accelerate the digital transformation of your company.

Much of the groundwork for the digital transformation already exists. It is simply a case of evolutionary changes to unlock the potential that has already been created by the big digital investments that companies have been making for decades.