Digital transformation in manufacturing is a hot topic today.
To be successful in manufacturing, companies must implement a successful digital transformation process. Being at the cutting edge of digital technology trends will enable them to be ahead of the manufacturing curve.
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We will discuss the importance of digital transformation in manufacturing in this article, looking at some key digital trends for manufacturers to bear in mind.
Digital transformation in manufacturing: background
Industrial revolution 2.0
Daniel Newman, writing in Forbes, says that we are entering into Industrial Revolution 2.0.
He believes that, as manufacturing revolutionized industry a couple of hundred years ago, digital transformation is having the same large-scale impact on manufacturing today.
He further believes that, as Henry Ford revolutionized manufacturing with mass production, digital transformation will positively impact every manufacturer that embraces it.
Mainly, digital transformation is manifesting for manufacturers as the move from traditional mass production to customized manufacturing. The digital laggards however are sticking with traditional mass production models.
If these slower converting manufacturers do not totally transform into the digital age, they will be left behind.
Currently, consumers are connecting with these manufacturers through phones and mobile devices. Manufacturers need to respond to customer demand rapidly with the right innovation, at the right time.
And it’s not just the big businesses that need to pay attention. The bottom line is digital transformation is impacting all levels of the manufacturing industry.
2 major digital trends in manufacturing
1. IoT and industry 4.0
In many ways, manufacturing is actually leading the way in terms of digital transformation across the board.
And that makes sense. After all, machines have been used in manufacturing for a long time.
Manufacturing is also the clear leader in the Industrial Internet and it tops all industries (including the consumer space) when it comes to IoT.
IDC reports that the manufacturing industry spent $178 billion on IoT in 2016, which is more than double what the second largest market (transportation) spent.
Below are some revealing statistics of how IoT is affecting large manufacturers:
- 76 percent of early-movers in manufacturing says IoT is increasing insight into customer preferences and behaviors.
- 66 percent of early-movers uses IoT to measure risks, protect company assets and improve staff safety.
- 60 percent of early-movers are improving the reliability or performance of products and services with IoT.
IoT is clearly a key force in manufacturing coming into the digital age — because it provides manufacturers with revolutionary methods to streamline and simplify manufacturing methods.
It can also provide real-time feedback, alerting companies of defects or damaged goods in the process.
Industry 4.0 has introduced hybrid virtual and physical warehouses, allowing personnel to be freed up on the production and collaboration side of things.
“[Industry 4.0] represents the vision of the interconnected factory where equipment is online, and in some way is also intelligent and capable of making its own decisions.”Daniel Newman, Forbes
2. AI and automation
Another major factor of digital transformation in manufacturing is artificial intelligence (AI), which is taking over manufacturing tasks that humans formerly performed.
A decade ago, an IBM supercomputer beat the world’s best chess player in a game. Since then AI has advanced significantly.
Today, advanced algorithms are changing the way manufacturers perform skilled labor, collect information, and predict consumer behavior.
Some manufacturers that have incorporated AI into the supply chain report increases in production of 20%.
Manufacturers are no longer sacrificing quality for efficiency. This is because AI has allowed machines to rapidly locate factors that effect and impact service and production processes.
Sensors and automation have now replaced human hands, eliminating wasted time and materials. This has allowed companies to ramp up production while simultaneously lowering manufacturing costs.
Robots have long been performing menial jobs for humans on the assembly line. However, digital transformation has allowed robots to take care of more complex tasks.
Machine learning has empowered robots to mimic human traits, such as memory, understanding, and dexterity. This has allowed manufacturers to use robots instead of employing staff, trimming their bottom line.
It’s no secret that automation increases speed and efficiency. This dramatically improves the overall manufacturing process, while also boosting the company’s overall workflow and inventory.
We’ve discussed a bit about the background of digital transformation in manufacturing, how it is revolutionizing manufacturing processes and mimicking the Industrial Revolution in terms of its impact.
Digital transformation is impacting manufacturing on a large scale. Major trends involving IoT, Industry 4.0. AI, and robots have helped to streamline manufacturing processes and dramatically improve the output of companies.
It’s also allowing companies to save money. The bottom line is that digital transformation is the future of manufacturing.