Digital Transformation in Manufacturing: Top 10 Challenges 

Challenges in Digital Transformation

Digital Transformation Challenges in Manufacturing

When Mckinsey surveyed around 700 manufacturing companies, a big majority said that ‘digital manufacturing’ was at the top of their operational plan. Yet, far fewer, in reality, succeed at digitizing themselves.

This is not surprising. Digitization is a tiring process. It is full of challenges that need speculations, insights, and a keen eye for attention. Companies must address them to plan potent strategies and prepare for contingencies.

This article, therefore, encapsulates the top ten challenges that every manufacturing company faces in its transition. 

Inspired by a 2020 survey on industry 4.0, we have divided the challenges into three broad categories:

  • Financial Hurdles
  • Organizational problems
  • Technology roadblocks

Organizational Problems

 

organizational problems in digital transformation

Unclear Vision for Value

Digital Transformation is not about implementing new tech but about delivering more value. Enterprises often lack this vision. They lack a vision about how these implementations will make their value delivery easier, quicker, and more efficient.

They do not have a clear plan on how digitization will fit into their Value Jigsaw.

This is a big problem. Because if the transformation is not directed toward adding value, it is bound to fail in one way or another.

Therefore, companies must be clear about their ‘Whys .’ They should know the key areas where value creation can be enhanced. Knowing so, they must invest strategically for maximum ROI.

Related Blog: Digital Transformation: Why Your Supply Chain Needs It?

 

Stakeholders and Employees’ Resistance

People resist change. Be it workers, employees, or even top-level managers, we see ‘resistance to change’ everywhere. 

This resistance is visible at different levels and forms. This resistance is visible at different levels and forms. It could be a direct opposition or, in other cases, something as subtle as a productivity drop.

Therefore, enterprises must focus on the education and retraining of their employees. The retraining should begin with top-level managers and then continue throughout the hierarchy. 

The aim should be to change the employee mindset. Everyone must get educated and retrained.

Lack of a clear roadmap

Lacking an implementation plan is the surest way of killing a project. It not only makes the process slower and more expensive but also brings down the chances of success. 

To make the transition seamless, enterprises need a well-planned roadmap. A good roadmap considers vision, budget, and timescale and is practical. 

Roadmap For Digital Transformation in Manufacturing

 

However, not many enterprises have a well-planned roadmap when they begin. It is normal. They can overcome this challenge simply by consulting with experts with digitization experience.

 

Financial Hurdles

Financial Problems in Digital Transformation

Cost of Initial Upfront-Investments

Small and medium-sized manufacturers often lack the deep pockets as their giant counterparts. For them, Initial investments are big hurdles they usually cannot afford to cross.

On the contrary, non-adoption costs are also huge and too significant to ignore. Inability to keep up with competition and to fail to fulfill the market expectations are big risks that companies always want to avoid.

To get past this dilemma, enterprises must prepare an execution strategy and investment plans based on accurate insights and predictions.

ROI assessment and optimization

Return on Investment(ROI) is one of the most important metrics for a transitioning enterprise. After all, benefits such as production jumps, profit increments, and cost reductions inspire firms to transform their manufacturing process. 

However, measuring accurate ROI for manufacturing technologies is a big challenge. It requires pinpointed insights and a clear vision for the future. 

In such scenarios, CIOs should help the decision-makers solve this problem. They must suggest ways for them to test different tools and measure their ROI.

Digitizing without interruption

Transforming plants without output interruption is a challenge that even some big firms face, let alone SMBs. However, it is not something unachievable. The solution could be something as painless as consulting with an outside consultant.

A consultant can help you prepare a well-laid execution plan to transform the plant without stopping the current production.

Change management is another key here. The enterprise must focus on its change management strategies to make the transition seamless.

 

Technology Roadblocks

 

Technological Problems in Digital Transformation

Cyber Security Concerns 

As per research, more than 60% of manufacturers have faced at least one data breach attempt in their smart factories. 

For a manufacturing company, ensuring the safety of its Informational assets is a big concern.

Data security should be the number one priority when Implementing new technology.  Therefore, all tech implementations should begin with a sound cyber security plan. A company must:

  • Identify the most important assets
  • Identify the potential data leakage points
  • Use preventive measures to prevent leakage

Lack of digital expertise

Digital transformation transforms a business in every aspect, including the employees.  Big size of the workforce, however, still lacks the skills to work with new technologies. Skill sets for tools such as AI, digital twins, and Internet of things(IoT) are still scarce.

Sourcing and training such employees is a big challenge that companies must address before digitizing themselves.

For this, they should seek guidance from trainers and consultants who can train the existing employees. Services such as consultation, training, and talent management can help them significantly.

 

Outdated Systems and Machines

Along with introducing new tech, digitization must weave other complimentary machines needed for the transformation.

Doing so, however, can be extremely challenging since multiple intermediaries like budget, stakeholders, and employee skills are to be considered.

It requires a firm to adopt a carefully tested and piloted approach to upgrade its entire production facility.

Inflexible Legacy Infrastructure

Replacing old legacy systems is tiresome. After all, dismantling the old system and replacing it with a new one is both expensive and hard. Yet, brands need to make such hard decisions to enable future growth.

The emerging technologies need cloud infrastructures, fast computers, and high-speed internet. To use them, companies need to transition their data infrastructure before the factories.

To know more about how Elysian Corptech can help you tackle these challenges, visit our Manufacturing Industry Service page.

Share on:
Scroll to Top