The Digital Transformation in Manufacturing

April 13, 2016
What is the best strategy to take advantage of a more connected, digital industrial world? Are you ready?

Manufacturing has had a long history of change. From the early days of steam-powered machines to high-volume assembly lines to automation and computer systems, technology has played a central role in driving innovation. This transformation has impacted the way products are designed, built and consumed. In fact, the effect has been so widespread that it has redistributed the world’s wealth—and is expected to continue to do so.

The world of manufacturing has entered a Fourth Industrial Revolution—a time when the Internet has enabled unprecedented levels of communication between machines, products and people. At the same time, a digital revolution is underway. Manufacturers can now virtually model any design, production and distribution process to improve agility or optimize performance to achieve operational excellence. The combined effect of these two megatrends is now creating unprecedented new challenges—and opportunities—for manufacturers, suppliers, investors and consumers.

From a manufacturer’s perspective, the top-of-mind question today is: What is the best strategy to take advantage of all these new opportunities? Where do you invest? How do you get started?

A great first step

Executives and academics have suggested the world of manufacturing is transforming from one of mass production to one characterized by mass customization—the proverbial “order of one.” This transformation is here. Not only must the right products be delivered to the right person for the right price, the process of how products are designed and delivered must now be at a level of sophistication.

Increasingly, the strategy manufacturers are now embracing to accommodate this unprecedented level of complexity is to go digital. This means more than just removing paper-based processes. New ways to design, go to market and support products are emerging that can scale and deliver the necessary visibility and control to stay on top of all the demands today’s manufacturers now face.

What might not be apparent is that the pressure to go digital is only increasing. The digital twin and the digital thread are two examples that illustrate how much further digital technologies can advance.

The digital twin

The concept of a digital twin simply suggests the need for not only a virtual design of products, but of creating a second virtual simulation of how a product was actually built. Think of the power behind comparing these two models to quickly ascertain whether quality standards were enforced? How about the impact on regulatory compliance or audit trails or traceability requirements?

Virtual models are already quite sophisticated, and will only grow from here. Nearly any metric, physical property or other product attribute can be modeled or soon will be. From there, the potential of having a quality test sample of 100 percent could realistically exist.

The digital thread

Digitization across manufacturing ideally starts with equipment design, and continues through product design, production process improvement and, ultimately, monitoring and improving the end-user experience. A smart, connected enterprise can embrace the digital transformation of an Industrial Internet of Things (IIoT) world by creating a digital thread—a single, unbroken collection of data that is woven throughout the value chain.

A digital thread could facilitate end-to-end tracking of global production processes, closed-loop quality management and an enterprise approach to continuous process improvement. When managed from an enterprise perspective, what could result are new levels of collaboration, operational excellence and agility. Beyond these performance improvements, the establishment of a digital thread can usher in a new approach to how manufacturers operate, bringing new business models to life that might not previously have even been considered.

The digital experience

In today’s experience economy, the new innovation model suggests products and services must offer buyers a unique experience, thus guiding manufacturing from global mass production to local mass customization. According to the Massachusetts Institute of Technology’s Smart Customization Group, “Leading manufacturers will be those that can help customers identify or build solutions to their own needs, and reuse or recombine existing organizational and supply chain resources.” Producing goods and services to meet individual customers’ needs is already difficult to achieve, but doing it with near mass production efficiency is still an unmet challenge.

Increasing reliance on digital technologies and strategies could be the way best-in-class manufacturers effectively address these challenges and come out ahead of the competition. Given the reasonable likelihood this strategy has merit, where are you with your digital strategy?

>>Gordon Benzie, [email protected], is a board member for MESA International. As a director of brand marketing at Dassault Systèmes, he created the Manufacturing Transformation blog, and is now responsible for keeping its content fresh and interesting. His other responsibilities include managing awareness, analyst relations, demand generation and content needs for the company.

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