top 10 digital transformation challenges in manufacturing

Digital transformation is the way to achieve competitive advantage for manufacturing companies who follow traditional business models and are facing fierce competition from the more agile and flexible start-ups that use emerging technologies for manufacturing. AI-powered robots, 3D printing, the Internet of Things (IoT)…there are a lot of trends in the world of advanced manufacturing technology and innovation just waiting for manufacturers who want to step up their digital journey. However, manufacturing digitization can present some fundamental challenges that can hold manufacturers back from digital transformation initiatives.

Here are top 10 challenges that you should learn in order to plan ways in advance to overcome them if you’re considering digital transformation:

1. Resistance to change

Traditionally, each stage of manufacturing operated separately, unaware of the changes happening at other stages. Due to the lack of integration, there are many problems that companies have to deal with such as heavy inventories, wasted work-hours, and consequently wasted expenses.

Conversely, the emerging technology business model is far more agile and flexible – being able to adapt to changing demands quickly. However, this type of model challenges companies to ensure these things for it to work:

    • End-to-end integration of the whole supply chain
    • Efficiency and agility at each stage, including suppliers
    • Open and speedy communication among organization

Those require the whole process on the assembly manufacturing line to adapt to a new way of thinking and a new perspective. Thereby leading to the resistance comes from both labor and middle management. They might question if the new way will be surely better than the existing business model?

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2. The initial investment capital

Small to medium organizations may not have the budgets to invest in new technologies and adapt existing ones. This can be a barrier when organizations intend to move towards the era of digitalization, but manufacturers must learn to see the wider vision. There will be investment costs upfront, but what is the cost of not investing in the technology to keep up with the global movement? That requires a good investment plan to help manufacturers know how much to set aside and when, what improvements to make and how to measure the outcome.

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3. Lack of knowledge and experience

One of the biggest manufacturing digitization challenges is the lack of relevant knowledge to implement advanced manufacturing technologies in a safe and secure manner. When increasing their advanced technology capabilities in manufacturing, it’s required that manufacturers have to make many efforts to learn to use advanced data analytics, AI and machine learning, digital twins, and automation. Otherwise, the lack of knowledge in these and other areas can hold back progress. Manufacturing companies may not have their own tech team to answer all questions or suggest good operational plans, so outsourcing will be helpful to reduce the stress of adoption.

External consultants like Kyanon Digital can guide manufacturing companies through investment plans, provide guidance and help make the transformation easier.

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4. Security

As digitalization becomes a global trend and growth factor, more and more equipment is connected through IoT. Human workers are being replaced gradually by robotics, AI and autonomous machines are taking over administrative tasks – often unsupervised. Loads of data are generated through all this, so security of all data – both personal and professional – has been a big challenge as well as a growing concern for years.

Certainly, employees and management alike are having concern over the security of personal data within the system. Any violation can potentially lead to substantial losses – or worse, whole business collapse.

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5. Rigid Infrastructure

In order to start going digital, manufacturers’ efforts need to overcome existing infrastructures which are rigid and likely incompatible with advanced technology capabilities. And digital transformation requires the organization to transform in every aspect, beginning with training. Training may include, for example:

    • New robotic operations;
    • Flexible production line configurations, or
    • Cloud-based resource planning.
6. Employee Errors

Human errors are one of the most common challenges for manufacturing digitization. They relate to the most common risks facing organizations, including safety, quality, and cybersecurity risks. For example, humans can configure machines incorrectly or insecurely; disclose business sensitive information to outside parties for quoting; mishandle equipment, or open unknown attachments.

Additionally, new processes and operations can potentially increase the risks of human factors. Unfortunately, humans may be highly resistant to change or adapt to something new at first. Therefore, if possible, change should not be imposed. Instead, it should be highlighted the rewards of the shift to digitization; thereby empowering employees to self identify room for adaptation and improvement.

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7. Outdated Systems

Technology changes much faster than traditional manufacturing equipment, usually with an estimated lifetime of about 10 years. Therefore, dealing with an outdated infrastructure is way more challenging than a rigid infrastructure. The older a technology system is, the more difficult it is to make it compatible with a digitized manufacturing environment.

As known, with a modern digital technology environment, appropriate data can be shared between a variety of systems and equipment. However, it might be impossible if business platforms and technologies are over five years old. And updating technology can be definitely challenging since various interdependencies must be considered.

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8. Privacy Concerns

Privacy concerns are also the big challenge of digital transformation, including operational security, personnel security and physical security as data can be shared easily in a fully realized digitized environment. Whenever information is collected to be used to identify a person, there should be considered as a privacy concern. This could be just employee or customer contact information, or even any kind of  data collected by certain IoT sensors, cameras, or biometric authentication devices. And it is important to know that while data from one device might not present a privacy concern, that data combined with data from other devices could.

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9. A Lack of Organizational Change Management

Rigid organizational structures, inefficient workflows, and unsuitable leadership styles can hold back digital transformation success. This was never more obvious than in 2020 when companies struggled to quickly adapt to a remote or work-from-home business model.

Simply navigating new technologies and processes is hard enough, but there is change resistance added to the mix, transformation absolutely begins to look impossible. Therefore, it is important to note that instead of just focusing on the technical side of digital transformation, you need to consider the humans it directly affects by developing a comprehensive change management plan.

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10. Lack of Overall Digitization Strategy

Digital transformation is far more than just saying or discussing. Yet, it has been told a lot out there without any clear definition. This leads companies to a situation in which they are confident they need to be transforming but not quite sure where and how they’re starting. Therefore, a strategy in place is a must; without it, your transformation could fail to get off the ground. Before writing down your plan, ask yourself: What are my company’s goals and priorities? Are they consistent across the organization, or are some areas on completely different pages?

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CONCLUSION

Each of these 10 digital transformation challenges can be addressed with an implementation plan that works with current processes, while enabling future growth opportunities to stay competitive. And in order to do so, manufacturers can take the first step towards advanced manufacturing technology integration by reaching out to external consultants experienced in providing guidance and resources.

Contact Kyanon Digital today, we’re ready to help ensure your digital transformation journey goes smoothly.