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Four ways manufacturers can embrace a digital transformation strategy with limited resources

Oct 04, 2021

It’s clear that digital transformation is the future of manufacturing. Manufacturers across the spectrum are finding that investments in Industry 4.0 technologies are reducing waste and cost, improving supply chain resilience, driving higher profitability and creating a world-class customer experience.

However, despite its numerous advantages, developing a digital transformation strategy has been slower to gain traction in small and midsize businesses. To be sure, the market is growing, and investments are making Industry 4.0 capabilities more attainable and affordable. This is particularly true of industrial internet of things (IIoT) technologies, where economies of scale are beginning to drive down costs. However, the onus is largely on manufacturers to do the market research and determine where and how to invest in innovation for the long term.

Naturally, this is challenging for companies that have numerous investment objectives but limited human and financial resources. The manufacturing digital transformation journey touches all aspects of the business, from staff to technology infrastructure to cybersecurity. Moreover, it’s not a one-and-done task. In other words, there is no one place to invest or one-time capital expenditure to make. Digital transformation is an iterative process that can take years to fully realize.

How to start building a digital transformation strategy

Here’s the good news: digital transformation is not an all-or-nothing undertaking. There are tremendous benefits to be gained even at a smaller scale — provided the investments are prioritized according to an overall strategy. You may even have the building blocks in place to get started without realizing it.

Here are four ways that you can embrace innovation with limited capital, staff and time.

Resource challenge Solution
I don’t have the staff to lead our digital transformation efforts.

Ensuring you have a digital transformation champion who can focus on building and executing a digital strategy is absolutely essential. 

Manufacturers have three options to consider: 

  • Find a resource on staff who has the capabilities, skill set and potential to drive innovation on a full-time basis.
  • Recruit a leader with the right skill set to lead this effort.
  • Outsource the effort to a consulting firm that can augment your existing staff or work hand-in-hand with your team to lead the effort.

Keep in mind that digital transformation is not just an IT initiative or a shop floor project. Your digital transformation champion needs to be a bridge between IT capabilities and business operations. 

My employees are not appropriately educated or confident in using new technologies and data or analytics as part of their day-to-day operations. In many cases, existing employees can be retrained and upskilled to adopt new processes and technologies. The key is to put a change management, communications and training strategy in place to guide your efforts. Taking a strategic approach to developing your workforce will result in stronger returns through greater productivity and increased capacity.
There are too many competing priorities and not enough capital or time to undergo a full-scale digital transformation. There’s no need to go big right out of the gate. First create an overarching strategy to define where you want to be in the next three, five and 10 years. Then prioritize investments according to your strategy. 

By starting small, you can easily make course corrections without disrupting your entire operation. You can also use the revenues gained from improved efficiencies to reinvest in the next phase of deployment. 

At Wipfli, we recommend that manufacturers start with investing in IoT capabilities. This is where you will see the quickest, most cost-effective return on your investments.

I don’t have the capacity to replace legacy equipment with Industry-4.0-ready technology. This is a very real challenge for many manufacturers that are looking to leap the digital divide. But just because you your equipment predates Industry 4.0 doesn’t mean you can’t take advantage of IoT solutions.

The smartest strategy here is to engage an engineering firm (familiar with your machinery) to modernize legacy equipment. In some cases, your equipment may already be producing data that simply needs to be collected and distributed. In other cases, legacy equipment can be modernized with the addition of sensors and other capabilities at a relatively low cost.

Wipfli can help you prioritize next steps

Industry 4.0 offers exceptional potential for manufacturers. It can also be a disorienting landscape to navigate. As a digital transformation consulting firm, Wipfli helps businesses of all sizes develop unambiguous strategies for digital transformation that support their long-term goals.

Wipfli can help you transition from being a manufacturer that uses technology to a technology-mindset company that does manufacturing. It’s time to create your manufacturing digital transformation strategy, and we can help.

Next up, we dive into the top areas where manufacturers should invest to create an innovative customer experience. Don’t miss out on that and our other thought-provoking articles just for manufacturing leaders. Sign up using the form on the righthand side of this page to receive articles and our manufacturing newsletter directly in your inbox.

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Author(s)

Jake R. Rohrer
Senior Consultant
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