Challenges of Digital Transformation in Manufacturing and What They Mean To Your Business

The manufacturing industry has recently experienced fundamental changes thanks to the Fourth Industrial Revolution.

Pioneers that embraced digital transformation strategies across the board are already reaping the benefits—increased production capacity and minimized material losses, streamlined operations, supply chain optimization, higher customer satisfaction rates, and happier workforces.

But that’s only half of the story. Thousands of manufacturing companies are still behind in their digital path, jeopardizing their survival.

Here are the main challenges in the manufacturing industry and how they affect your business.

The Main Digital Challenges in the Manufacturing Sector

Not Offering Online Transactions (B2B) For Suppliers and Clients

In recent years, eCommerce has evolved beyond standard product management.

B2B businesses must now streamline their purchasing workflows and transactions to account for diverse ways of pricing and make the buyer’s journey easier.

Just like in the B2C environment, business clients want to browse multifaceted digital product catalogs, obtain bulk discounts, place orders and reorder goods with a few simple clicks and in real-time.

Statistics show that 32% of B2B buyers in the US expect easy payment options. To this end, large manufacturing companies can benefit from implementing a modern B2B eCommerce platform that connects all enterprise systems to offer a unified omnichannel experience to their customers.

B2B customers don’t have reservations and are prepared to switch to your competitor if they can offer a more seamless and hassle-free purchasing process.

Siloed ERP and Legacy Systems

Data and technology orchestration in manufacturing is critical. Each R&D cycle feeds on new data to improve and make adjustments. Working seamlessly with vendors sometimes requires technology integrations with their equipment to save important time and effort. Still, you can’t get there if you continue relying on outdated, disjointed systems that don’t talk to each other and slow down decision-making.

Stand-alone ERP solutions are not only rigid; they can’t integrate every element of the manufacturing process, from inventory to procurement to production staff management. 

They also can’t analyze profitable trends or help in production planning. This means you aren’t unlocking new efficiencies, streamlining procedures, or gaining 360-degree visibility into operations, which hinders the creation of a platform ecosystem that solves modern challenges and predicts disruptions.

Lack of Quick Collaboration Spaces Curbing Growth and Innovation

The impact of Covid-19 and prolonged economic uncertainty have made it more difficult for manufacturers to collaborate, which is essential for growth and innovation.

More manufacturers must recognize the value of partnering, as it helps enterprises navigate common challenges, lower costs by sharing supplies and machinery, and better serve customers. Moreover, collaboration can eliminate redundancy in non-differentiating activities that aren’t part of a company’s value proposition.

Toyota and BMW, for example, are working together to develop fuel cell systems and lightweight automobile body technology. This allows them to exchange knowledge and learn from one another, minimizing R&D costs and driving innovation.

However, the avenues for collaboration are still limited, making it challenging to harness the intrinsic value of cooperation. Manufacturers desperately need to establish regional partnerships and micro-networks to propagate innovation and build resilience in the ever-changing global economy.

Lack of Vision Around a Responsive Supply Chain Powered by Technology

Finally, manufacturers are still failing to leverage technological capabilities to boost supply responsiveness. Many companies are relying on consensus forecasting, which takes several weeks and before you can draw any conclusion, the data is outdated.

In recent times, supply chains have been fragile. Disruptions caused by the Covid-19 pandemic and the difficult political landscape have forced companies to find ways to maintain business continuity, yet look for flexibility. Manufacturers can leverage machine learning to consolidate and analyze multiple data points faster and in real-time. This will help them predict changes and protect themselves from threats.

The Key Takeaway

The question is no longer, “When will you begin the digital transformation of your manufacturing business?”. Instead, we should ask, “Why haven’t you already?”.

At Base22, we can show you how to integrate your ERP and legacy systems to provide customer self-service and strengthen your supply chain through real-time supplier interaction. Get in touch with our team today.

1024 683 Base22 Staff
Start Typing