Digital transformation has been one of the key industry themes for several years, but recently it has become a major strategic priority for most organizations. As an impact of the pandemic, and the operational and IT weaknesses that were brought into sharp relief as a result, digital transformation of legacy systems and processes is now seen as a critical and urgent requirement. Indeed, many industry analysts and pundits suggest that we may see decades of innovation in this area occur over the next five years.
But what is the situation like currently and what does the future hold?
Digital transformation within manufacturing
While we are seeing more and more manufacturers invest in digital transformation initiatives, the reason for them doing so is shifting. Prior to the pandemic, it was almost entirely focused on business performance outcomes – improvements in efficiency and productivity, for example – and the impact of those on the bottom line. In other words, the motives where solely framed around mostly commercial benefits.
However, during the pandemic, the driving force swiftly changed to the mitigation of risk – either from an operational perspective or a strategic perspective. For example, is the organization able to withstand significant disruption across the supply chain and cope with volatility in demand or logistics? Is the organization flexible and agile enough to respond to uncertainty that was changing on a weekly, if not daily basis? Is the organization able to cope with large numbers of employee absences or remote (offsite or off-shopfloor) working requirements, yet still maximize output?
While both drivers remain an important and valid case for digital transformation, another will begin to take center stage in 2022 – and that is sustainability.
Sustainability leading the way
Organizations across every industry and of all sizes are now recognizing the responsibility and scrutiny being placed on them by governments, consumers, and society at large to become much more environmentally responsible in their business activities. A recent global sustainability report by Nielsen found that 81 percent of respondents feel strongly that companies should help improve the environment by implementing new technology programs. From waste, resource usage, carbon emissions and recycling, for example, organizations will increasingly turn to digital transformation initiatives to optimize efficiency and productivity and this significantly reducing unnecessary environmental impact.
For manufactures to truly make an impact they must rethink not only how they design their products but also how they design, manage and monitor their end-to-end production processes. But they also must not overlook how by optimizing their production processes to minimize waste and maximize efficiency and productivity will also contribute significantly to the mitigation of any negative environmental impacts.
Having a productive and efficient production system has always been an important aspect of manufacturing operations, with the aim being to secure profits, growth, and stakeholder value. Yet, if a product does not meet the correct specification it goes to scrap, waste or for rework. While many manufacturers recognise that has a negative impact on performance, the unused resources that go into making that product in the first place are also wasted, whether human resource, machinery or tool wear, energy and natural resources or raw materials. While this approach to quality is important to ensure organizations continue operating well and keep their customers happy, their mindset must evolve to also understand how that waste is impacting the overall environment footprint of their operations. Efficiency and productivity in manufacturing is now quite simply becoming more about corporate, social and environmental responsibility than just business performance.
The drive towards optimizing manufacturing efficiency and productivity should no longer center solely around performance and profit but equally revolve around sustainability, with sustainable practices being at the forefront of any manufacturer’s digital transformation strategy.