It’s clear that even though manufacturers understand the impact of digital transformation on their operations, there's still much to do.
By Peter McDonnell, Chief Transformation Officer, ServiceNow
It’s not an easy time to be a manufacturer.
Everything from global supply chain issues to inflation to factory worker shortages to geopolitical uncertainty is causing the industry to feel the financial pinch.
In response, leading manufacturing executives are prioritizing cost reduction and factory floor efficiency to avoid operational disruptions that impact overall equipment effectiveness (OEE) on the factory floor. These disruptions are costly. They can slow or stop production and then ripple across the value chain, threatening supplier relationships, customer loyalty, and financial stability.
Manufacturers are ramping up investments to automate their plants and resources, but they still face fundamental challenges. Operational complexity and siloed data prevent optimized performance. A reliance on nonstandardized and error-prone manual processes for factory workers leads to downtime and inefficiency. Further, high labor costs and a retiring workforce are widening the skills gap.
In early 2023, ServiceNow and Dynata surveyed more than 1,900 manufacturing executives and business leaders. Incredibly, 89% report that a lack of digitization for factory processes has a medium to high impact on OEE. At the same time, while 82% of respondents acknowledge digitally enabling factory floor workers is a high priority, only 37% say they’ve made significant progress on this transformation.
It’s clear that even though manufacturers understand the impact of digital transformation on their operations, there's still much to do. And beyond simply improving processes for efficiency’s sake, digital transformation initiatives also offer concrete competitive advantages.
There will always be a need to prioritize the basic needs of the factory floor, which keeps equipment operational, timelines on track, and factory workers productive. However, if companies ignore the opportunity to both digitally transform their factory processes and digitally empower their people, they may also place their businesses at risk.
Related
Related