What is Digital Transformation?

Everywhere you look technologists and software experts are banging on about Digital Transformation, the Internet of Things and Cloud this, that and the other.

So what does this all mean for the future of a typical small to medium-sized manufacturing business? This seems to be quite a challenging question to answer.

Anyone in manufacturing understands that the industry is a slow beast to change, initial setup costs are high and machines and tools are often replaced in 10/15 year cycles. Infrastructure and IT investment is scarcely prioritized and manufacturing processes are often heavily governed by their own internal quality systems and external regulations such as Good Manufacturing Practice. These businesses are often family run by non-technical, time served manufacturing evangelists that are reactive and proactive. So, it’s no wonder that these factors combined result in change and embracement delays and an inherent struggle to interpret the effect of what appear on the face of it to be complicated technical whims from Microsoft.

Unfortunately, just like Uber came along and decimated the taxi industry with their technological advancements and embracement of today’s web accessibility, older manufacturing businesses are now suffering the same wave of disruptive technologies. Those manufacturing businesses that do not stop, evaluate and make strides to understand what Digital Transformation is all about and how it affects them, will lose the race to lower their operational costs and will become less relevant in their industries.

Imagine the competitive advantage that would be realized if a subcontract metal fabrication company could turn around a complex machine cutting requirement at a lower cost than their competitors in 30 minutes simply due to a Nesting algorithm software service on the web? Or a plastics manufacturer using online analytics and Inventory Optimization to guarantee their customer service levels which retains that lucrative contract? Or a stationary distributor with a flat line through their IT budget because all their ageing hardware is hosted and they rely on Office 365 to prevent software reinvestment capital expenditures and eliminate the need for an IT Manager.

Harsh on the IT Manager, you may think? This unfortunately is a consequence of the disruptive nature of today’s Digital Transformation and probably why you won’t hear your IT Manager advocating the immediate use of web-based offerings – such as public hosted solutions and Office 365 – despite the clear financial and competitive advantage that it would provide your business.

In summary, in order to drive down the operational costs required to remain competitive and relevant as a manufacturing company, it is now paramount that a business invests in the automation of processes, utilizes and responds to powerful analytics and embraces web-based software and solutions.

If these things are not part of your IT strategy today, you should be asking yourself why not, because it certainly should be.


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