September 23

Digital Transformation Challenges For Manufacturing


Adopting digital strategies for manufacturing processes allows small and medium-sized companies to remain competitive in a global marketplace. Digital transformation enables manufacturers to leverage digital technologies to increase production, improve efficiency, decrease costs, and increase customer satisfaction. This transformation is much more than just digitizing paper-based processes.

Digital transformation is the integration of technology into all areas of business. It redefines business strategies and creates new business models by harnessing the power of technology. Customer demands have risen, and competition is higher than ever. After the challenges of the COVID-19 pandemic, manufacturers can no longer ignore the need to digitalize production and supply chain activities.

Small and medium-sized manufacturers can leverage digital technology to build sustainable and successful operations. However, digital transformation can present fundamental challenges for manufacturers unrelated to the new technology.

Common Challenges to Digital Transformation

Financial Costs

The initial investment capital required can be a significant barrier for small and medium operations. Although there will be investment costs upfront, the cost of not adopting the technology may be even higher. As customer demands change, all business owners have to adopt new technologies and processes to keep up. Those that don't aren't likely to survive in today's environment. With the right investment plan, manufacturers of all sizes can adopt new technologies over time.

Lack of Experience

As manufacturers increase their technology capabilities, many efforts seek to use advanced data analytics, machine learning, automation, and artificial intelligence. A lack of knowledge about these technologies can hold back progress. Manufacturers may not have access to a dedicated, in-house technical staff to answer questions or suggest operational solutions, so finding outside assistance can help reduce the stress of adopting new technologies. Outside consultants can guide manufacturing companies through logical investment plans, help make the shift more manageable, and provide expert guidance for finding solutions that merit adoption.

Technical Barriers

Existing legacy applications, the cost of new technologies, and a lack of software knowledge can hinder the transition to digital manufacturing. Existing software and hardware and traditional IT thinking do not readily adapt to a digital transformation. Developing an ecosystem that responds to current needs rather than existing software is essential to overcome challenges, migrate to cloud-based digital manufacturing, and take advantage of the many benefits available to those that make the switch.

Resistance to Change

It's not just the technology. Employees may initially resist change, so companies must shift their culture to help ease the transition. Adopting a continuous improvement and innovation culture helps with any change. Highlighting the benefits of the shift and addressing any privacy concerns or job security issues also go a long way to facilitating a positive mindset toward the transition. Ensuring all employees receive the proper training to work with new technologies is essential to easing fear and ensuring a smooth transition.

Leadership Issues

The key to implementing digital transformation lies with upper-level executives and staff. Buy-in is essential so that processes are thoughtfully developed, executed with care, and correctly managed. Not only that, but leadership is needed to create new partnerships with providers and customers. Manufacturers should consider appointing or hiring a Chief Digital Officer (CDO) to oversee the implementation of the digital transformation. CDOs can manage the transition from analog to digital, use data to transform business processes and work closely with team leaders to address implementation issues or concerns.

Digital Transformation is a Journey

These are just a few common issues manufacturers face when making a digital transformation. It's important to understand that switching to a digital manufacturing process takes time. It's not a matter of installing new software and hitting the ground running. Unfortunately, many digital transformation projects fail, but careful planning and guidance from a trusted expert will help ensure your success. For information about why digital transformation projects often fail, check out our recent blog post on this topic.

Why Digital Transformation is Essential

No matter your industry, it is impossible to ignore technological changes. Numerous new tools and technologies are already shaping how manufacturers do business. Many companies are experiencing the benefits of their digital transformation activities at sustained speed and scale. You may be wondering why you should adopt these new technologies. The potential is enormous. Using advanced software technologies to connect your processes offers significant cost savings through improved productivity, reduced waste, and optimized maintenance processes.

Begin Your Transformation 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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