October 25

Benefits of Digital Transformation in Manufacturing


The benefits of digital transformation in manufacturing are numerous. Businesses worldwide are adopting artificial intelligence and machine learning technologies to improve efficiency and cut costs. In today’s world, adopting digital transformation is no longer an option for those who want to remain competitive and profitable.

What is Digital Transformation in Manufacturing?

Digital transformation involves integrating the latest technologies into every aspect of an organization’s functions, from internal operations to consumer interactions. At the most basic level, digital transformation enhances traditional manufacturing processes, products, and the workforce with digital technologies. The primary goal is to improve efficiency, reduce costs, and maximize revenue.

Industry Trends

Digital transformation goes well beyond adopting a few digital tools. It’s a reimagining of how you approach your business operations. Manufacturers are now using modern technologies, including:

  • Artificial Intelligence (AI)
  • Machine Learning (ML)
  • Internet of Things (IoT)
  • Smart Manufacturing
  • 5G Networks
  • 3D Printing

Digital transformation is no longer a new concept. 79% of global manufacturers have implemented advanced analytics, and 73% rolled out IoT systems as of late 2020. Digital transformation reshapes workflows and strategies around these technologies instead of simply adding them to older processes. Digital transformation takes time and a considerable investment, but it can yield impressive results for manufacturers.

Benefits of Digital Transformation for Manufacturers

Many manufacturers have heard that digital transformation can benefit them, but exactly how is often not clear. Here’s a look at five top benefits of digital transformation in manufacturing.

1. Higher Productivity

The most apparent benefit of digital transformation in manufacturing is often improved productivity. Manufacturing involves repetitive processes, which can lead to boredom and distraction, leading to errors and poor efficiency. Automated systems, by contrast, can eliminate mistakes leading to improved productivity.

In addition to improving production line efficiency, digital transformation dramatically improves the productivity of clerical tasks. Studies show that 76% of office employees spend up to three hours daily on data entry tasks, and 83% spend the same amount of time fixing errors. Automating these tasks, coupled with physical automation on production floors, can substantially improve the overall productivity of a manufacturing operation.

2. Lower Costs

In the past, manufacturers had to schedule routine maintenance on equipment to check for any unnoticed malfunctions. This resulted in lost production time and cost money. IoT sensors can now monitor machine health indicators in real-time, alerting workers when maintenance is likely needed. These predictive maintenance approaches save 30-40% rather than scheduling routine maintenance checks or reacting to unexpected breakdowns.

In addition, IoT devices, including smart thermostats, can adjust operations using real-time data analytics to reduce energy consumption. These savings may appear marginal initially, but they can amount to considerable savings over time. You can also track data usage trends to see which areas waste the most energy, informing future improvements.

Digital analytics can also help your organization better understand issues such as inventory levels, delivery status, and customer demand cycles. With real-time information, you’re better positioned to make informed decisions and reduce unnecessary risks and costs related to excess inventory or supply chain issues.

3. Improved Decision-Making

In the past, manufacturing, supply chain, and back-office information were usually siloed – available in only one application and used by one specific department. Modern technology breaks down barriers and readily shares data across departments. Manufacturers can make informed and accurate decisions with information sent to a centralized database, where key statistics are displayed side-by-side and updated regularly. Managers can reduce risk and control costs with better insight into inventory levels, delivery status, and customer demand cycles.

4. Higher Quality Products

Machine learning and sensors throughout the production process are vital parts of digital transformation in manufacturing. The change helps analyze and monitor performance regularly, leading to fewer errors and a better final product. Digital technologies enhance product quality leading to greater customer satisfaction.

5. Improved Customer Experience

Manufacturers have the opportunity to provide greater value to their customers by launching B2B eCommerce platforms with separate portals for specific regions, brands, or clients. Monitoring supply chains and identifying potential problems allows manufacturers to become forward-thinking rather than reactive. Manufacturers can use sales data to predict customer demand cycles more accurately and adjust production accordingly.

The Key to Successful Digital Transformations

The benefits of digital transformation in manufacturing are numerous. Lower costs and improved productivity are essential for any company. Today, businesses rely on increasingly complex and industry-specific processes to attract customers, grow sales, and react to supply chain issues. No matter where your business is in the process of adopting new technologies, there is always more to do.

Developing a comprehensive implementation plan begins with assessing your existing system, including the policies and operational procedures relevant to resource management. This evaluation can be handled by internal team members or a third-party consultant with the skills to optimize your digital transformation.

Implementing significant changes is impossible without the right tools, techniques, and experience. Many companies find that hiring an experienced consultant to assist with planning and implementing their digital transformation is money well spent.

Begin Your Journey With E3 Consulting

Working with an experienced consultant who can help you select the right tools and create a plan that meets your company’s unique needs and goals is essential. With over 35 years of experience, E3 Consulting can help your business implement digital transformation initiatives and create sustainable growth. We’ve helped Microsoft, Sony, Wastequip, Paramount Cosmetics, and more than 150 manufacturing companies achieve growth while reducing costs. We deliver solutions that increase efficiency and revenue by implementing better processes and technology. Book online or call (732) 334-3995 to schedule a consultation.


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