Digital Transformation in Manufacturing: How Tech Is Changing the Industry World

Anna Khrupa by Anna Khrupa on January 28, 2020

Digital Transformation in Manufacturing: How Tech Is Changing the Industry World

Digital transformation in manufacturing: key benefits and technologies

Digital transformation is on the rise. Companies change their business models, upgrade their products, find new ways of communication with their customers. They are ready to innovate and use new technologies to adapt to rapidly changing customer tastes and stay ahead of their competitors. Thousands of businesses within different industries have already followed that path. It seems that manufacturers are ready to start their digital journey too.

Digital transformation and Industry 4.O

The First Industrial Revolution is a story about the mechanization of production through the use of steam power. The Second Industrial Revolution began with the era of mass production driven by the spread of electricity. The Third Industrial Revolution was based on achievements in the field of electronics and information technology. Industry 3.0 was focused on the automation of single machines and processes.

The rapid pace of discoveries and ubiquitous innovations are the factors that triggered the start of the Fourth Industrial Revolution. It is characterized by unprecedented possibilities in the field of processing and accumulation of data and quick access to it, as well as blurring the boundaries between the physical and digital worlds. According to PwC, Industry 4.0 is an end-to-end digitalization and integration of processes across the entire company. It starts at the stage of product development and spreads to manufacturing, logistics, and service.

It’s no exaggeration to say that digital transformation is the key to Industry 4.0. Digitalization shortens the value chains and has a huge positive impact on industrial production. By utilizing digitalization, factories and plants transform into “smart factories” and “smart plants” thus opening up more and more opportunities for optimization of processes and revenue growth. For this reason, the “Industry 4.0,” is sometimes called “smart manufacturing”. It is also known as “Industrial Internet of Things (IIoT) as IoT is one of the most important elements that defines the digital transformation in this sphere.

What are the benefits of digitalization in manufacturing?

Digitization is revolutionizing the value chains of many companies within different industries. Improved products, connected services, and completely new business models provide countless opportunities for startups, SMBs, and big companies. According to a 2014 forecast by IDC, smart manufacturing could generate 371 billion dollars in net global value during the next four years. One of the surveys by PWC indicates that 86% of manufacturers believe they will reduce their costs and grow revenues over the next five years because of the implementation of the digitization processes.

Let’s have a look at the advantages of the digital transformation for the manufacturers.

  • Reduced cost and lower risks

Because of the high level of automation of digital processes, fewer manual interventions are required. As a result, companies get a chance to reduce their process costs. Digital improvements also introduce new tools for testing products, such as prototyping or simulation software. Those solutions, inter alia, allow manufacturers to mitigate the risks related to typical testing.

  • Faster response

As the communication effort along the value chain is greatly reduced, the reaction time is shortened. Manufacturers can respond to the market changes quickly that keeps them from losing their competitive advantages. Digitization and automation of the processes as well as the integration of the digital strategies within the workforce also guarantees businesses a quicker time-to-market.

  • Reduced downtime

Manufacturing companies, while implementing the digital strategies, get to know new concepts such as prescriptive maintenance and predictive maintenance. Those techniques are used by many businesses to reveal potential failures before they happen. This helps manufacturers to decrease their maintenance costs and optimize the downtime.

  •  Customer focus and higher product quality

Digital transformation makes production more flexible and allows producing small quantities at decreasing costs. Many companies receive a chance to offer customer-specific solutions, thereby improving client satisfaction. On one hand, such technologies as online paperwork, remote communication software, digital processing tools improve the productivity of the workforce. On the other hand, IoT tools allow monitoring the entire production process effectively. This all together provides enough opportunities to optimize workflows and produce better products.

  • New market opportunities

The implemented digital transformation strategy allows manufacturers not only to reduce their risks and improve their performance, but also to find access to new customers. Digital transformation tools help companies to integrate external suppliers, outsource some of their tasks, providing a more competitive position in the global market.

Industrial digitalization: What technologies are changing industrial production?

There are many revolutionary technologies that transform industrial production and enable new forms of cooperation in the industrial value chains, such as simulations, cloud computing, Big Data, robots, 3D-printing, and AR/VR.

One of the key elements of the fourth industrial revolution, powered by digitalization, is simulation and emulation. Everyone somehow connected to the industrial production processes knows that each downtime translates into immediate losses for the company. Therefore, production planning long before the assembling and each line is first simulated in the virtual space. Thereby the manufactures check all the materials, search for defective elements and test scenarios of typical failures.

VR and AR technologies are also used for simulation purposes. But both augmented and virtual reality can support a variety of services in manufacturing, such as selecting parts in a warehouse, providing real-time instructions and notifications, improving safety warnings, and searching the data. AR/VR usage can also help employers increase their productivity and skills. For example, General Electric’s experiment showed that a technician’s performance during wiring a wind turbine control panel with the AR headset was 34% higher than without it.

One more technology that already has a big impact on manufacturing – is cloud computing. The cloud resolves the problem of connectivity across multiple factories as well as decreases production times. It also helps manufacturers to cut deployment costs for software applications by allowing them to be accessed from any computer or mobile phone over the Internet. It is also helpful in a simulation project as companies do not have to buy a simulator for a single task, but to rent it for a particular amount of time.

RPA short for Robotic Process Automation is also one of the most powerful technologies that supports Digital transformation in manufacturing.

Advances in robotics are one of the main drivers of digital supply chain transformation. Traditionally robots perform the most routine tasks on the factories such as transporting semi-finished and finished products around the facilities, helping with logistics or working at the assembly line. But what is even more important that Robotic Process Automation frees humans from performing complicated or dangerous work, as well as work that takes place in a hostile environment.

The digital transformation in manufacturing would have been impossible without IoT. Industrial IoT or IIoT is a part of the bigger concept Internet of things which refers to the network of devices connected to the internet and communicating with each other. The IIoT systems help manufacturing companies to get access to a far greater amount of data and to enhance their business processes.

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