Why Manufacturers Need a Phased Approach to Digital Transformation

Manufacturer’s Approach to Digital Transformation

Author: Laila Meraj

25 September, 2024

Digital transformation has become a necessity for operators because of the rapid advancements in the fields of Artificial Intelligence (AI), Machine Learning (ML), data analytics, the Internet of Things (IoT), and other automation. Due to these advancements, the manufacturing sector is undergoing a major transformation. Although majorly implemented with known benefits of greater output, manufacturers still struggle with how to implement the changes effectively. Here comes the role of a phased approach.  

A phased approach to digital transformation allows for the right implementation at the right time. It helps manufacturers to adopt new technologies, processes, and strategies to maximize the profit or ROI while minimizing disruptions.  

In this blog, we will identify the following: 

• Why do manufacturers need digital transformation?
• What are the benefits of such approach?
• How to implement this phased approach successfully?

The Challenges of Digital Transformation in Manufacturing  

Before understanding why the phased approach is beneficial for manufacturing, first, we need to understand the challenges that are faced by manufacturers when implementing this approach:  

1. Complex Operations: Manufacturing operations are complex by nature due to multiple interconnected processes, systems, and stakeholders. So, implementing the digital transformation process in the entire organization at once can be challenging, leading to costly mistakes.  
2. Legacy System: Manufacturers often rely on legacy systems that have been in use for decades. Adapting to new digital technologies with these outdated systems can be challenging, requiring careful planning and execution. 
3. Readying the Workforce: A shift towards digital manufacturing systems requires training the employees or upskilling the workforce which takes time to do so. Adapting to new technologies, tools, and workflows can be slowed down by this if not managed appropriately.  
4. Risk Management: Implementing digital processes often leads to new and greater risks such as cybersecurity and operational risks. A streamlined approach to manufacturing enables the management of these risks more effectively through proper quality inspection tests before scaling them to the organization at once.  
5. Cost Considerations: Initiatives of Digital transformation can be costly, especially for small and medium-sized manufacturers. An organized approach allows organizations to spread out costs and achieve quick wins that can fund further investments. 

The Benefits of a Phased Approach to Digital Transformation  

This approach to digital transformation provides several benefits that can help manufacturers overcome the challenges mentioned above: 

1. Increase in ROI: It helps manufacturers focus on the key areas first, delivering wins that illustrate the value of digital transformation. The early success of this can further generate momentum to justify further investment in digital transformation initiatives.  
2. Improved Change Management: Digital transformation is as much for people as it is for technology. Such a streamlined approach provides enough time for the manufacturers to implement the change effectively, ensuring that the workforce is trained, engaged, and prepared well for the new ways of working. 
3. Risk Mitigation: It helps the manufacturers in the identification of potential risks earlier in the process. As discussed earlier, this approach to manufacturing enables the management of these risks more effectively through proper quality inspection tests before scaling them to the organization at once. 
4. Flexibility: Starting smaller and then scaling up can help manufacturers experiment with different technologies and strategies and adjust as required. As a result, this flexibility can reduce the risk of failure, ensuring that digital transformation efforts properly align with business goals.  

Implementing a Phased Approach to Digital Transformation  

Implementing such an approach to digital transformation requires careful planning, prioritization, and execution. Here’s a step-by-step guide to help manufacturers get started: 

Analyze the Current State to Define Goals  

The first step while starting off with the digital transformation journey is to analyze the current state of your company. This includes analyzing your existing processes, systems, and technologies, as well as identifying loopholes and areas for improvement. Seek advice from stakeholders or engage them across the organization to better understand your needs and challenges.  

After careful consideration, define your goals for digital transformation answering the question “What do you want to achieve?”. Whether it’s improving operational efficiency, cost reduction, improving product quality, or increasing agility, your goals should be specific, measurable, achievable, relevant, and time-bound (SMART). 

Prioritization  

Based on your goals in mind, prioritize your digital transformation plan based on their potential impact and feasibility. Focus on areas where digital technologies can deliver the most value, such as automating repetitive tasks, optimizing production processes, or improving supply chain visibility. 

Mapping  

Such an approach requires a clearly defined map to outline the sequential step-by-step process of the implementation, the time required, milestones, and cost. This map should be flexible to integrate changes with progress, but it should be clear in terms of guidance needed.  

Employee Training 

Digital transformation is not just about technology, rather it’s more related to people. The success of this is highly dependent on the training and engagement of your workforce. Hence, provide enough training and support to the employees to develop the skills and competence they need to succeed in the digital environment. This training could be both technical and non-technical. 

Evaluation of the process 

Digital transformation is a continuous process that requires regular monitoring and adjustment. Track your progress against the goals and milestones outlined in your map, regularly. Use data and analytics to measure the impact of your initiatives and identify areas for improvement. 

Always be prepared to adjust your strategies based on the insights gained during the implementation process.  

Conclusion  

Digital transformation is both a complex and challenging task, but manufacturers need to remain competitive in today’s rapidly changing market. A phased approach offers a practical and effective way to implement digital technologies while minimizing risks, maximizing ROI, and ensuring long-term success. 

For those looking to set on their digital transformation journey, Xorbix Technologies offers the expertise and solutions needed to succeed. From AI-driven analytics to IoT integration, we provide the tools and guidance to help you achieve a phased and successful digital transformation. 

Read more related to this topic: 

1. Manufacturing Revolution: AI Analytics and Databricks. 
2. How Digital Transformation is Driving Innovation in Manufacturing. 
3. Transforming Manufacturing Data: The Power of Xorbix and Databricks Together.