Digital transformation in manufacturing, digital manufacturing, digital transformation, manufacturing, industry 4.0

It’s said change is the only constant, and the manufacturing industry is proof. It’s an industry that faces consistent disruption, causing manufacturers to be in a permanent state of adaptation. They now face the biggest change the industry has seen in decades, what many are calling the fourth industrial revolution. Industry 4.0, as it’s known, has crept up on manufacturers for the last several years, with many slow to get on board. Now that it’s officially here, many manufacturers are looking for new ways to stay agile and competitive, and at the center of it all is digital transformation. 

What is Digital Transformation?

Digital transformation in manufacturing refers to integrating the use of digital technologies into all areas of a business, which profoundly changes how that business is able to operate and impacts what it can deliver. Digital transformation is a primary driver of Industry 4.0, the latest wave in the evolution of the manufacturing industry. It combines traditional manufacturing processes with new, advanced technologies to greatly reduce inefficiencies. A cornerstone of optimizing efficiency in the industry is improving collaboration among both people and technologies. People are better connected, technologies are better connected, and relationships among manufacturers, suppliers and customers are enhanced. 

What Are the Effects of Digital Transformation in Manufacturing?

When incorporated well, digital technologies have immense value for manufacturers. They can fundamentally transform operations in a way that provides better health to every area of a business. Let’s look at the areas digitization can affect.

Challenges Facing the Manufacturing Industry

Those in the manufacturing industry are constantly faced with four main issues:

  • Competition
  • Disruptors
  • The need to reduce costs
  • The need to increase profits

For those reasons and more, manufacturers can never get complacent. They must always be ready for disruption with new and innovative ways to stay ahead of competitors and meet customer demands, all while limiting expenses. The use of resources, including people, needs to be efficient. Machines need to be high-performing. Maintenance ideally needs to be preventative. Data needs to be collected to inform decisions. And it all needs to be connected so business owners can see both the big picture and the specifics of each operation. Enter smart manufacturing.

What is Smart Manufacturing?

Smart manufacturing refers to using various digital technologies to perform work in a more streamlined and connected way. Primary technologies in the smart manufacturing movement include big data processing capabilities, industrial connectivity devices and services and advanced robotics. The goal of smart manufacturing is to create smart factories that utilize automation, machine learning, networked machinery, cyber-physical systems, the Internet of Things, and other digital technologies to optimize adaptability, efficiency, ergonomics, and the integration of customers and business partners.

What Are the Benefits of Smart Manufacturing?

Though the cost and effort to transform a traditional factory into a smart, efficient factory can be a barrier to entry for some, the resulting benefits greatly exceed the initial investment. 

For instance, utilizing a manufacturing ERP system, which digitizes and connects operations across the business, a manufacturing company can expect to experience:

  • Increased Productivity: Smart technologies can share information up and down the supply chain in real time. Because of that, data can be used to adjust ordered quantities so that only the inventory needed arrives, and it arrives just before it’s needed. Thanks to this Just in Time (JIT) style of ordering, manufacturers face less unplanned downtime from a lack of production materials, leading to more productivity and profitability. 
  • Reduced Overhead and Operating Costs: Greater efficiency regarding inventory and production lines reduces operating costs. Better use of resources does as well, even when it comes to personnel. Instead of staffing machines, for example, automation can replace certain roles and allow for employees to be better utilized in more innovative and revenue-driving positions. 
  • Better Product Quality: With inefficiencies greatly reduced on production lines, product quality tends to increase, leading to fewer items returned as defective and happier customers. Quality management can improve savings to the business, which can be funneled back into the business and used in more worthwhile ways. 
  • Predictive Maintenance: Machine downtime brings an operation to a grinding halt. Factories using smart technologies, like ERP systems, have greater visibility into their machines and can identify when maintenance needs to be performed before a time-consuming and costly breakdown occurs. 

What is the Future of Digital Transformation in the Manufacturing Industry?

Global supply chain disruption has been overwhelming and eye-opening for many manufacturers over the past year and a half. If they weren’t aware of the need for smart manufacturing to streamline operations and reduce issues prior to 2020, they are now. The industry is still struggling with supply chain resilience, a key area to overcome, and many believe another big supply chain disruption is coming. 

To prepare for future disruptions, manufacturers are encouraged to make the move to digital manufacturing. Being able to digitally connect with a pre-vetted network of global suppliers allows manufacturers to route around disruptions and get what’s needed when needed. The industry will see more digital transformation in the years to come as a result, forcing all manufacturers to realize that the “someday” they planned to improve their operations on has come and gone. Businesses will now require a data-centric architecture. Many manufacturers have data; it’s just not connected yet. With smart data collection, manufacturers can gain greater visibility that can be used to make more strategic business decisions. 

Digital manufacturing capabilities are no longer a “nice to have” for businesses. The use of digital technologies are now imperative not only for business growth but for survival in today’s fast-moving market. QAD Adaptive ERP solutions help businesses stay agile and thrive through turbulence. Assess how adaptive your manufacturing enterprise currently is, and see how our ERP solutions are designed to fill those gaps.

Kristin is a member of the QAD marketing communications team. She is responsible for highlighting customer success as well as jumping in to help with social media and blogging. Outside the office, Kristin enjoys travelling, cooking and chauffeuring two active boys between basketball, karate and everything in between!

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