digital transformation in manufacturing

The International Data Corporation (IDC) has recently predicted major digital transformation (DX) in manufacturing around the world.

The most notable changes highlighted by IDC for 2018 to 2021 concerning new ways to deliver value. They say that the converging roles of people, processes, and technology will change how products and services are created and delivered. Personalisation and increased coordination with business partners will be at the heart of successful DX.

The beginning of the New Year is an ideal time to look at how this changing landscape can give manufacturing businesses of all sizes opportunities to create more efficient, sustainable and scalable operations.

The numbers game

A fairly bewildering array of numbers is used to describe the key components of continuing DX in manufacturing. The Third Platform technologies that will allow manufacturing businesses to accelerate this transformation have four pillars:

  • big data and analytics
  • Cloud-based solutions
  • mobile
  • social

There are also six innovation accelerators – the internet of things (IoT), artificial intelligence, the next generation of security, three dimensional printing, virtual and augmented reality and robotics.

Many manufacturers are already implementing some of these technologies alongside their enterprise resource planning (ERP), ecommerce, finance, warehousing and distribution systems. IDC says that this growing integration and convergence of technologies will revolutionise how businesses develop and behave.

In a nutshell

New ways of doing business, enabled by flexible, scalable Cloud-based ecommerce platforms like Cloudfy, are at the forefront of a period of rapid change for all manufacturers.

Manufacturers investing in the Third Platform technologies have high expectations of the value they will deliver to their business. For those that optimise their business performance through innovation and end-to-end integration there are significant opportunities to grow, improve profitability and gain competitive advantage.

Transformation by scale

By 2020 IDC predicts that 60% of top manufacturers will rely on digital platforms to enhance their systems and improve user experiences for employees, suppliers, and partners as well as customers. They will be supporting up to 30% of their overall revenue with digital platforms that will underpin collaboration and process coordination.

Large-scale information exchange and big data will be used to simplify connectivity, improve decision-making and enhance the security. Blockchain, best known in connection with crypto-currencies like Bitcoin, is expected to be part of this transformation. It’s already being used in the supply chain to securely store and record transactions. There are also proposals to use blockchain to support collaborative prototyping and production in manufacturing.

Operation-wide integration

These converging technologies will enable integration of sales, distribution, production and innovation. The whole manufacturing process can be streamlined to optimise a ‘just in time’ approach that will minimise risk and waste and improve efficiency.

IDC says that, by 2021, 20% of the top manufacturers will be increasing integration of their ERP, sales and distribution systems. They predict the use of secure spines of embedded intelligence, using IoT, blockchain, and artificial intelligence. They say that this phase will allow large-scale processes to be more fully automated, speeding-up delivery times by as much as 25%.

Intelligence in the Cloud

The flexibility and scalability of Cloud-based platforms are expected to be at the heart of DX. New intelligent systems will allow high volumes of information to be managed and interrogated. This will allow multiple organisations in the manufacturing supply chain to collaborate. Machine learning and artificial intelligence will improve decision-making and deliver robust, secure end-to-end manufacturing operations.

Talk to one of our experts today about digital transformation for your manufacturing business.

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