Ready, set, go: The digital transformation journey for manufacturers

Transitioning manufacturing operations from a traditional labour-based model to one that incorporates greater technology innovation is an individual journey for every Canadian manufacturer – and some are further along the path than others. We’re seeing the greatest investment among larger manufacturers, global companies with Canadian facilities, and newer small- to medium-sized businesses, while long-established and labour-intensive, small- to medium-sized manufacturers are following further behind.

Most manufacturers, however, have made some inroads in their digital transformation journeys including implementing ERP systems for the back office, or online portals for employees, suppliers, and customers.

74% of Canadian manufacturers say driving digital transformation is critical to attracting and retaining talent and customers.

80% of Canadian manufacturers say they have an aggressive digital investment strategy

Our surveys found that 74% of Canadian and 69% of global manufacturers say driving digital transformation at a rapid pace is critical to attracting and retaining talent and customers. In fact, 80% of Canadian and 75% of global manufacturing companies say they have an aggressive digital investment strategy, intended to secure first-mover or fast-follower status.

At the same time, almost three quarters (72%) of Canadian respondents indicate that deciding on the right technology, managing risk and compliance of the transformation, and measuring and reporting on the benefits, are holding them back from making progress.

The digital transformation landscape is broad, complex, and constantly changing. Manufacturers are challenged to address shifting regulations, risks including cybercrime, and the wide range of technology innovations available to them. Often, the overwhelming question from manufacturers is, where do we begin?

Before considering a large, transformational journey, manufacturers need to understand what they’re trying to achieve and why.

• Look at areas of the business that are underperforming compared to your company or peer benchmarks. Are there areas where you haven’t invested, but you think investment would be valuable?
• Think about the key challenges you have to overcome to meet your strategic goals. Do you need to lower costs, increase productivity, improve quality, enhance process visibility, address rising costs of raw materials, optimize inventory management, or attract a new customer base?
• Consider the parts of your business that will be key drivers for growth going forward. Will technology help you get to market faster, differentiate you from your competition, or enhance your R&D efforts?

Use this information to map out a clear strategy. Then break your strategy down into smaller, mini projects that are attainable and beneficial. And ensure you set goals for each project that are tied to your business plan so you can measure success – for example, reducing downtime or machine failures by “x” or increasing output by “y”.

Digital transformations can take several years or longer to complete, so to ensure employee and shareholder engagement, it’s important to have key milestones to show progress and success along the way. It demonstrates that the strategy is working, and that the changes each project delivers are adding value to and financially benefitting the company.

Artificial Intelligence (AI) and Robotic Process Automation (RPA) – Automates repetitive, paper-based processes and can be implemented in as little as three months, thereby reducing data-entry errors and freeing up your employees’ time to spend on higher value work.

Internet of Things (IoT) / 5G Technology – Can be used to remotely monitor machinery performance, automate testing, etc., thereby helping you move from preventative to predictive maintenance, and potentially 24/7 operations with remote monitoring.

3D printing – Brings agility to your production with rapid prototyping, onsite design, and mass customization, making R&D and innovation faster and easier.

Robotics – Incorporates everything from introducing robots in large numbers across the warehouse to increase efficiency, to smaller-scale applications, such as using a robotic solution in a targeted area of production to reduce safety risk or improve quality.

1. Cybersecurity should be a component of every manufacturer’s risk management plan. It’s important to understand the risks to each system or type of data, what the implications of a cyberattack are, and ensure you’re focusing your resources effectively to mitigate them. What can cybercriminals do to your manufacturing process? How could they stop your production? What will your response be to a ransom attack?
2. Every manufacturing company should be using data to make informed decisions for their business. The data can be collected from large scale, Internet of Things connectivity and/or existing customer, supplier, and operations systems. The right data can provide valuable insights that can have a significant and valuable impact on the strategic and operational decisions you make for your business.
3. Moving from preventative to predictive maintenance of machinery and systems helps ensure you reduce the risk of lengthy and costly downtimes, so production can continue uninterrupted.