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The State of Digital Disruption in Manufacturing

digital disruption manufacturing

The manufacturing industry is going through some major changes.

The market itself is now split in two:

  1. The “old”: Small to medium enterprises (SMEs) and certain manufacturing sectors with legacy systems that are trying to make the most of older capital investments.
  2. The “new”: High-value manufacturers, agile startups, and challenger brands that operate with new tech standards—some unburdened by prior thinking and systems.

Let’s take a look at those in the “new” party, those taking digitalization by the horns and how you can follow suit.

Digital Disruption in Manufacturing

There’s a lot of digitalization going on around the world in manufacturing. Advanced pockets exist in high-tech economies such as Germany, other areas of Europe, South Korea, Japan and parts of North America, while other countries have plans to upgrade their capabilities.

Made in China 2025 is a blueprint for Beijing's plan to transform the country into a Fourth Industrial Revolution (4IR) powerhouse, as is Industrie 4.0 in Germany, Factory 2050 in the UK, Society 5.0 in Japan and Smart Nation in Singapore. While expertise and developments exist in digital islands, the technologies of the 4IR don’t recognize national borders and are likely to disrupt manufacturing sectors on a global scale.

Some examples of such disruption include:

  • Rolls Royce in the UK is in the next generation servitization model of the 4IR with its civilian aircraft engines.
  • Siemens of Germany is at the forefront of the wholesale industrial change, if not spearheading it.

At the global level, we’re still at the beginning of this journey of transformation. No country—even the most advanced, nor any particular sector, has completely digitized or cracked it. That’s because there’s no one-size-fits-all solution when it comes to the model for digital manufacturing in the 21st Century. If you look at leaders such as Kone, Emerson, or Michelin in this sphere, all are taking different paths.

In many ways this presents a significant opportunity to make a fresh start and re-configure your business for decades to come. And we believe it starts with the customer.

How to Embark on Your Digitalization Journey

For those companies who have yet to start their 4IR journey, it’s important to 1. Look to these forward-thinking companies and 2. Avoid common digitalization mistakes.

When it comes to the former, take stock of your manufacturing sector and ask yourself:

  • Where are those beacons of 4IR success?
  • Who are they?
  • Which of them align with our business?
  • What are they doing?

This is one of the key steps in the transformation process.

What to Avoid

When it comes to the latter, many in the industry are investing time, effort, and money on transforming how products are made, with a well-meaning, yet inward-looking, approach to digitizing the warehouse floor, production lines, and processes.

However, it won’t be enough to simply manufacture and produce a great product in this new, digitally driven era. Smart factories and easily-configurable production lines will allow many rivals to produce best-in-class goods, which means you’ll need to find ways to do it cheaper, faster, and with better quality than the competition, competition which will also be more globalized and fierce.

Yes, the answer is better technologies. But they will also become easier to employ, more affordable, and more accessible.

Where to Look

Ultimately, there will be a more pressing focal point than better technologies for manufacturers: The customer.

Delivering the optimal user experience is what digital transformation is really about. It's focusing your new processes, technology, culture, etc. around the customer and on delivering the best experience possible. After all, experience is what drives customer interest, engagement, satisfaction, and loyalty.

Yes, getting into the digitalization game is important—by 2025, the economic impact of smart factories could reach up to US $2.3 trillion per year, and 80 percent of manufacturers in the UK say the 4IR will be a business reality—but if you don’t focus on the right objective when laying your foundation, all will be for naught.

Matt Noyes

Matt Noyes

Matt is the Director of Product Marketing at FPX. He focuses on the evolution of CPQ from a traditional sales tool to one that delivers value across the enterprise.

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