Fail-proof: overcoming challenges in factory digitalisation

Many manufacturing companies dream of the day when they’ll truly become an “Industry 4.0” enterprise through digital transformation. Unfortunately, that’s easier said than done.

A wide range of consulting agencies, from Bain to McKinsey, have determined that between 70% and 95% of all digital transformation efforts fail.¹ It’s not for lack of trying: close to half (about 44%) of manufacturers in Asia-Pacific (APAC) plan to adopt smart manufacturing within the next year, a Rockwell report found.²

Given that digital transformation spending is expected to rise to US$1.05 trillion by 2026,³ smart manufacturing adoption is only likely to grow in the years ahead.

Digitalised manufacturing promises to yield a goldmine of benefits for companies that decide to take it on. A BCG study found that wider adoption of digitalised manufacturing in Southeast Asia “can generate up to $600 billion a year in additional manufacturing output, increase annual foreign direct investment in manufacturing by up to $22 billion, and create up to 140,000 new jobs a year.”⁴

It’s a mouth-watering prospect for manufacturing companies, to be sure. But why are so many of them trying to digitalise – and failing?

The key obstacles (and solutions) to manufacturing digital transformation can be summarised into three key points:

Most legacy manufacturing infrastructure is simply incompatible with digitalisation: lacking the reporting and analytical tools of today’s Industry 4.0 platforms, they might as well be a black box for managers. And even if they get started somewhere, they might have trouble untangling the legacy system’s varied interdependencies.

As a result, managers often lack the insight needed to pinpoint problem areas that will benefit the most from digital transformation – or act on the limited information they do have.

Solution: After conducting an inventory of all the equipment, machinery, and systems currently used at the plant, managers should determine the parts of their manufacturing value chain that stand to gain the most from a digital-manufacturing transformation.

By zeroing in on the parts where digitalisation can exert the most leverage, managers can use this data to build a digital-manufacturing strategy and deployment roadmap that identifies a priority list of technology use cases.

It's all about getting up to speed: managers should "find opportunities for big wins, and quick wins can create significant momentum for a digital transformation," a McKinsey paper explains.⁵

Digitalising an existing manufacturing operation calls for understanding individual elements that might get in the way. And the more complex your operation, the more factors you must consider.

How reliable are your existing internet connectivity, network infrastructure, and communication systems? How well can your cybersecurity measures protect your systems, data, and intellectual property? Is your workforce equal to the new digital technologies and automation you plan to implement, or would you need to train or hire new talent to implement and maintain new digital solutions effectively?

Solution: Transformation leaders should get in touch with their teams individually to identify challenges. “Staff who have intimate knowledge about what works and what doesn’t in their daily operations” may have deeper insights into internal challenges and their solutions, explains the Harvard Business Review.

“New technologies can fail to improve organisational productivity, not because of fundamental flaws in the technology, but because intimate insider knowledge has been overlooked,” the article concludes.⁶

Digitalising manufacturing will inevitably run into resistance from both management and rank-and-file – the former worry about retraining for new processes, while the latter worry about potential costs and outcomes of the transformation.

This resistance might be even more apparent in companies where departments are siloed from each other – each working in isolation and worry about how the new technology might remove the boundaries that set each of their departments apart.

Solution: Instead of just focusing on the technical aspects of digital transformation, change leaders should include leadership and rank-and-file in conversations on the transformation process, engaging all levels of the enterprise to guarantee buy-in.

Start by getting the company’s C-Suite executives on board, then use their influence to persuade other decision-makers at every level of the organisation. Getting your stakeholders involved in the process of discovery increases the likelihood of a digital transformation concluding successfully, where outcomes are optimised to everyone’s benefit.

It factors in potential roadblocks and increases your ability to think of creative solutions in response. It measures and evaluates results – allowing you to make adjustments along the way.

For example, Singtel can help determine your digitalisation roadmap based on your industry-specific needs, data collected internally, and desired results. To ensure optimal outcomes, Singtel also provides solutions like:

● 5G connectivity & Singtel Paragon

● Internet of Things (IoT)

● Multi-access edge computing (MEC)

● Cyber security

Let’s talk about overcoming the obstacles that stand between your manufacturing facility and digital transformation.