Thanks to the pandemic and everything moving online, companies have experienced the same amount of digital growth they expected in the next five years in about eight weeks.
For the most part, mechanical equipment manufacturers haven’t been the ones to keep an ear to the ground when it comes to tech trends. But that needs to change—and fast.
Given the industry’s digital growth thus far—and the incredible amount of potential it has for growth in the future—Mechanical Equipment Manufacturers (MEMs) as well as distributors and packagers will need to pay much closer attention to where technological innovations are moving in order to incorporate them and pivot when needed. In other words, they’ll need to become more agile.
When is a great time to start implementing such a shift? Right now. The sooner you start investigating, investing in, and deploying new technology, the more growth you’ll have because the more efficient and effective your processes will be. What’s more, these digital tools won’t only work for how you sell—through both direct and indirect channels—but can assist with process improvements and scalability.
But before diving in, it’s important to understand how COVID-19 has disrupted business at large, as well as how it’s affected the manufacturing industry specifically.
Where We’re At
According to McKinsey & Company’s survey, “How COVID-19 has pushed companies over the technology tipping point—and transformed business forever”, COVID-19 has sped up the adoption of digital technologies by several years—and that many of these changes could be here for the long haul. If anything, the benefits from adopting new technologies/processes are here to stay! Here were some of their remarkable findings:
- Executives say their companies have accelerated the digitization of their supply-chain and customer interactions, as well as their internal operations, by three to four years.
- The share of digital or digitally-enabled products in their portfolios has accelerated by seven years.
- Executives at organizations that experimented with new digital technologies during the crisis—including those that invested more capital expenditures in digital technology than their peers—are twice as likely to report outsize revenue growth.
- Viewing cost savings as one of the most important priorities for digital strategies dropped from 48% of executives in 2017 to 10% in 2020.
- More than half of executives say they’re investing in technology for competitive advantage or refocusing their entire business around digital technologies.
The Manufacturing Industry
In the manufacturing space, Engine Insights reports that global supply chain experts with manufacturing expertise named “accelerating the adoption of technology” a top strategy to mitigate the supply chain impacts of the pandemic. This is a smart move, as another report by McKinsey & Company notes that manufacturers are actively developing plans for “lights out” factories and supply chains.
Other reasons why adopting technology will prove useful in manufacturing?
- Employing automation technology to move manufacturing closer to end markets alleviates supply chain challenges.
- Logistics that allow for the intelligent routing of manufactured goods will help build more resilient supply chains.
Now that you know how COVID-19 has spurred digital transformation in business at large as well as for manufacturers, what can you do about it?
Stay tuned for our next post to learn how manufacturers will need to refocus and accelerate digital investments, use new data sets and enhanced modeling techniques to manage assets and forecast demand, and more.