IBM: digital transformation in manufacturing 2021
In a study conducted by IBM and The Manufacturer titled , the multinational technology company provides insight for those in the manufacturing industry on the current digital transformation landscape.
During its analysis, the organisations discovered three key findings:
- 67% of manufacturers have accelerated digital projects as a result of COVID-19
- 92% rank ‘Improving operational efficiency’ as their greatest priority
- Time was identified as the primary factor impeding digital adoption
Immediate priorities and long term growth strategies
First up within the report, reflects that in the short term in response to a highly volatile, unpredictable trading environment, manufacturers should prioritise three interconnected factors “the human impact; data gathering to support decision making; and acting swiftly yet shrewdly.”
Long term, “if 2020 was the year for internal digital transformation, 2021 is when attention will turn to the external, customer-facing areas of an operation. That may present greater challenges for businesses, but equally it will provide greater rewards for those who get it right,” adds IBM.
Growth and efficiency
When discussing the topic of growth and efficiency with those in the manufacturing industry, one participant stated “COVID-19 has illuminated the weaknesses in our business and our focus is on patching those holes, over and above anything else.”
Going forward, the top five factors that are high on the agenda for manufacturing decision makers are:
- Improving operational efficiency (92%)
- Customer growth (87%)
- Customer retention (85%)
- Supply chain integrity (81)
- Operational resilience (81%)
The impact of COVID-19
“Pre-2020, the majority of manufacturers were focused on a handful of core strategic imperatives: improving operational efficiency and resilience, identifying cost savings, customer growth and strengthening supply chain integrity/visibility,” commented IBM.
While such priorities have mostly stayed the same, post-COVID an additional strategic imperative will be work wellbeing.
“Due to the nature of industrial workplaces, health and safety is a keystone of any manufacturing operation. COVID-19 has brought that importance to new heights.”
With this in mind, the top five priorities that have received greater attention since the outbreak include:
- Operational resilience (88%)
- Wellbeing/ working environment (83%)
- Supply chain integrity & resilience (75%)
- Supply chain visibility (71%)
- Improving operational efficiency (65%)
With most industries adopting digital technologies to tackle the challenges of COVID-19, the manufacturing industry is no different. Looking to 2021 and beyond, manufacturing decision makers are focusing their investments on four core areas, IT and data systems, collaboration tools, product and customer growth, and efficiency improvements.
When asked about the impact of adopting digital technologies as a result of COVID-19, manufacturers report that the adoption has:
- Accelerated our plans/ adoption projects (67%)
- No change to our plans (17%)
- Delayed our live adoption projects (10%)
- Delayed our plans (6%)
Smart tech adoption and the barriers
“The concept of ‘lean’ has been around for decades and almost every manufacturing operation now has some form of lean programme, whether bespoke or a more widely adopted methodology. These programmes have been consistently delivering strong, double-digit gains around productivity, waste reduction and cost savings,” said IBM.
The top five technologies helping manufacturers meet their goals include:
- Cybersecurity (92%)
- Advanced data analytics including predictive/prescriptive analytics (90%)
- Automation/robotics (85%)
- IIoT/IoT data from devices (83%)
- Artificial intelligence and machine learning (77%)
However, the top five barriers that manufacturers are facing when it comes to adopting new technologies include:
- Resourcing/time (58%)
- Securing internal funding (52%)
- Adoption/Culture (50%)
- Implementation (40%)
- Selecting the technology to adopt (37%)
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.