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Industry 4.0

Demystifying Digital Transformation in Manufacturing



To stay competitive, manufacturers must continually reinvent themselves and find new ways to improve—whether by delivering differentiated products, controlling costs, or improving quality. So, it should be no surprise that manufacturers’ pragmatic, practical need for results presents a perfect proving ground for digital transformation techniques, technologies, and processes.

New digital technologies that promise to transform manufacturing must provide improved business outcomes if they are going to become engrained in the daily operations of any organization.

Today, three factors are accelerating the adoption of digital transformation techniques, technologies, and processes: the chronic labor shortage of workers in manufacturing, customers’ requests for more product quality data on each production run that includes their orders, and customer expectations for price breaks over time.

This article looks at pragmatic strategies for applying digital transformation approaches in order to turn the industry pressures faced by manufacturing into opportunities for gaining a competitive advantage.

It’s All About People

It is easy to focus too narrowly on the word “digital.” However, real digital transformation is all about empowering people. That is particularly true at the core of manufacturing, where the goal is about improving how people get work done and how information technologies can help employees to streamline and improve the daily processes of producing high-quality products.

In my experience, 80 percent to 90 percent of a given enterprise resource planning (ERP) system implementation’s costs are for customizing a system to match how teams work. This includes change management programs, training, and continual support of new technologies that support the core ERP platform. Spending on software is a mere 10 percent of a total implementation.

The same holds true for manufacturing’s adoption of the latest digital transformation technologies, including additive manufacturing, analytics, 3D printing, the Internet of Things (IoT), machine learning, and manufacturing intelligence, to name a few. Adopting these new technologies has everything to do with change management, and the first goal is to define how they improve people’s ability to get more done in less time while capitalizing on their core strengths as contributors. (Source:

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