The digital factory concept may seem a new one, yet it offers manufacturing and logistics companies massive potential to transform profitably and crush their competition.
Digital leaders in the manufacturing sector outperform their competition by a wide margin. By setting up a digital factory, manufacturers can unlock massive potential for their business and keep them one step ahead of the competition.
The digital factory is a catalyst for injecting new processes, new technology, new working methodologies and a more customer-centric strategy, within the factory walls.
It’s why, according to research from PWC:
- 91% of industrial companies are investing in creating digital factories
- 98% expect to increase efficiency using digital technologies
- 90% believe that digitisation offers more opportunities than risks
More importantly is ensuring that these factors result in a higher-performing manufacturing business and critically, a better experience for your customers.
What is a digital factory?
A digital factory is a manufacturing facility in which workers, machines, components, raw materials and products immediately share information during each stage of the manufacturing process.
Within a Digital Factory, the production is mostly automated by machines using Robotic Process Automation (RPA). RPA provides a perfect solution for many issues that usually arise from more manual human work.
Additionally, manufacturers can track each product stage to the smallest component by controlling the product life cycle.
With so much data available during the production processes, manufacturers can automate improvements to the production cycles by creating safer products, boosting output, increasing revenue and reducing manufacturing costs.
Why the need for a digital factory?
Most large manufacturers have deep-seated processes around their manufacturing methodologies of getting products to market.
Implementing change, or merely the suggestion of it causes shivers amongst those with ingrained ways of working.
However, failure to adopt or transform digitally leaves the door wide open for competitors to catch up and take over your market position.
Startups and new market entrants can acquire massive market share and disrupt leaders faster than ever before.
Digital factories not only provide a leaner operation for those who embrace it, it makes it easier to respond to ever-changing customer needs and opportunities.
Fostering a digital environment promotes agility and values customer experiences. It reduces disruption throughout the entire logistics and supply chains in a rapidly changing world.
How can a digital factory transform company culture?
Setting up an innovation lab dedicated to digital transformation creates an environment where anything is possible.
A digital factory often calls for a whole new set of rules, including increased agility, new technology solutions and cross-functional teams.
These teams are often the ones attempting to expand company parameters and push out new digital capabilities quickly.
They can take on new digital initiatives not previously open to them and find more productive ways of working that benefit the digital factory overall.
Digital manufacturing companies become a sort of industry 4.0 incubator with the opportunity to take on manufacturing digital transformation, tackle business problems and explore the ability to do more.
Workers are empowered to approach obstacles differently and from a digital perspective centred on building digital manufacturing the right way.
Not only building better manufacturing processes, but utilising new technologies throughout the entire digital supply chain, including:
- machine learning,
- artificial intelligence and,
- digital factory software hosted in the cloud.
What’s more, this atmosphere yields results and fast.
In part, this is achieved by gathering real customer insights to understand customer journeys.
Businesses who leverage customer feedback can validate feature development and scale their agile processes to manufacture products faster and leaner.
Digital factories bring more success
Defining success varies on what the manufacturer believes is critical for their business.
For instance, maybe it is to increase efficiency – an easily quantifiable metric. Most factory owners see a 12% increase in factory efficiency.
Yet this is only limited success. To quantify the successes of setting up a digital factory, there is much more to consider.
Revenue-only KPIs are only focused on producing one end-goal. Digital factories do so much more.
A digital factory is an opportunity to adopt a more customer-centric approach to delivering products to your customers. It does not only impact the digital factory alone but the entire supply and logistics industry.
For instance, if your digital factory product output increases – can you ship them quickly and efficiently to your customers to sell?
Suppose you don’t have a digital logistics solution. In that case, the advantages of a digital factory could be lost within a bottleneck.
It is imperative that when considering digitisation, a business considers the entire supply chain operation.
Doing so will ensure that the concepts of digital factories and automated logistics benefit the foundation behind this approach – being customer-centric.
Digital factories improve the customer experience
A customer-centric approach is about improving the customer experience. When understanding customer needs and their touchpoints, businesses can increase their offering over their competitors.
Digital factories accumulate data, and thus promote innovation through incremental progress. This in turn drives organisational efficiency and new product development.
The entire digital journey brings a positive experience for both the factory owner and the customer.
Whilst this is positive for the factory and customer, some challenges arise surrounding innovation.
Obstacles to manufacturing digital transformation
Although digital transformation provides a fertile breeding ground for innovation, some obstacles can hinder it – a resistant workforce.
Specific segments of a factory workforce welcome the opportunity to radically overhaul existing inefficient and ineffective practices.
Others will view this as a threat to their job roles.
Recognising the impact on the workforce in the company is necessary as calculating the financial impact of implementing a digital factory.
Not doing so can impact the latter.
Employees who feel marginalised by the prioritising of new technologies or who are not adept at working in new digital environments will compromise the factory’s chances for success.
To combat this problem, manufacturers will need to retrain their ablest workers. They must become more data-orientated and able to handle more factory automation systems.
Another solution is to recruit employees who are more adept at belonging within a digital factory environment. Or, those who can aid existing team members to be more digitally conversant.
Manufacturers cannot afford to sit by and be idle. They must lead the way in reorienting their workforce and upskilling their skill sets using the latest automation tools.
But that will not be enough. Digital manufacturing companies and their leadership must embrace this new strategy themselves, actively encouraging digitalisation.
Doing this will encourage other members of the workforce to accept the digital transformation strategy.
Furthermore, the leadership must encourage and reward this behaviour. Aligning those goals with the team’s KPIs will ensure focused investment and faster ROI. A good leader leads the front line and is the driving force behind workforces and teams.
Digitising the entire manufacturing logistics chain
The digital factory journey is a transformative one.
And as with any transformation, managing the change — particularly how it impacts those you do business with — is vital.
The foundation of digital factories is embracing new technology and digital solutions. These solutions must ensure its impact on the supply chain is minimal.
In today’s post-COVID world, it is now even more imperative to ensure that supply chains remain resilient.
Thus it’s as important to develop all the other aspects of the digital supply chain. Otherwise, the transformation is not sustainable.
If possible, be ambitious about your digital factory strategy.
Consider integrating digital features into products to offer services that deliver more tangible value.
Consider automating beyond the factory into the supply chain. Factory automation is more than what happens within the four walls of a factory.
The increase in digital logistics companies means that more manufacturing companies must become digital to keep supply chains smooth for customers.
For example, a machine manufacturer might use sensors and artificial intelligence to sell enhanced predictive maintenance packages.
The digital factory concept is the future
Opening up your organisation to allow for innovation isn’t straightforward.
Striking the right balance is not easy, but not doing it will miss out on the enormous potential that digitalisation can provide.
The benefits of digital manufacturing is obvious.
Not only does it ensure that manufacturing supply chains remain resilient. Digital factories empower industrial businesses to prioritise their customers and generate a better customer experience.
In that case, the digital factory concept can both boost internal innovation and disrupt their competitors.
Written by David Bailey-Lauring