Digitising a manufacturing operation is a daunting proposition without an obvious starting point. Taking this seemingly herculean task and dividing it into phases and aspects helps you eat the proverbial elephant called digital transformation. One way to look at digital transformation for manufacturing is to divide that elephant into two halves: process transformation and product & service transformation.

Process transformation means converting traditional processes to more efficient digital systems that can increase efficiency dramatically, improving all aspects of the operations. Product and service transformation means creating new value-add services that can both improve the manufacturing environment and the customer experience while opening new revenue streams.

Getting clear on the type of transformation you are going to focus on (or identifying that both types make sense, given your objectives) is an important starting point. Each has the potential to dramatically improve your trajectory of future growth and performance.

Optimising efficiency through process transformation

Process transformation is critical for companies with legacy paper-based systems or digital systems. Without a modern digital information backbone, there are inevitably inefficiencies, such as manual processes, siloed data, and duplicative efforts. This results in limited access to information for employees, hindering their productivity. Entrenched practices and procedures may also be sources of inefficiency, necessitating retraining.

First, converting and optimising general operational processes to digital workflows can deliver immediate results, such as unifying email, calendar, messaging, voice and collaboration. This type of streamlining is highly valuable, as it makes a major difference in how efficiently an organisation functions. Giving employees more access to actionable information enables them to do their jobs more effectively. From there, more advanced workflows can be developed, such as analytics-driven decision support and digital field service processes.

 >> Read related: The Digitisation Opportunity for Manufacturing Operations

These new digital capabilities give employees better, more timely information, directly supporting objectives like higher first-time fix rates. The long-term benefits of process change can be wide-ranging. For instance, advanced analytics paired with remote device monitoring can analyse a wide range of systems and predict when maintenance will be needed before a component fails and causes disruption. Another benefit is better allocation of human resources, like field service engineers. Digital workflows can ensure that the optimal resource is assigned to the highest-priority activities. Insights from digital workflows pave the way for reduction in time and waste, as well as improvements in quality and production efficiency.

Creating new opportunities with product and service transformation

Product and service transformation is about using digital technologies to deliver innovative services and experiences, which translate into new revenue potential. This often involves the computerisation of entire product platforms and the monetisation of data-driven services.

In some cases, manufacturers have been offering these types of services for a while but without the speed, agility and analytic capabilities offered by today’s cloud-based technologies. Aircraft engine manufacturer Rolls-Royce, for instance, has been using data models for years to determine when aircraft engines require maintenance. Grounding an aircraft for maintenance is incredibly costly for an airline, so being able to schedule it precisely was a major improvement over previous methods. Now Rolls-Royce can analyse larger data sets which increases the accuracy of predictive maintenance recommendations and enables the company to respond quickly to customer demands for new business or operational insights.

Beyond jet engines, products of all kinds are becoming increasingly computerised, or “smart.” Smart products are built with a computing platform that makes them dynamic. For instance, a washing machine might download a new power efficiency program to reduce water or power use and the customer’s bills – and similar kinds of feature enhancements could be delivered over the lifetime of the product therefore retaining its value. 

>> Read Rolls Royce customer case study: Data is the New Gold

Adding digital components to products not only makes it possible to update them over time – it also enables new service delivery and improves the customer experience. For example, a smart power generator set can examine historical data to know when demand will be lower and reduce its fuel consumption automatically. The smart power generation solution can also offer other advice aimed at reducing costs, emissions and maintenance needs.

Digital technology has played a vital role in the manufacturing industry for years. Compared to other industries, manufacturers are ahead of the curve when it comes to incorporating digital technology into business processes. Today though, digital is no longer simply a tactical aspect of the manufacturing business – it’s becoming vital to pursue end-to-end digital transformation in order to achieve objectives like improving efficiency and quality, reducing costs and waste, and creating innovative products and services.