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5 Challenges to Digital Transformation in Manufacturing

September 8, 2023
By Ron CrabtreeSeptember 8, 2023

A manufacturing employee uses technology as part of an overall digital transformation

Digital transformation is helping carry many industries into the new era, and manufacturing is no exception. As more manufacturers make the shift toward digital, there are certain aspects to consider to make the transition smooth and effective.

Here, we'll go into the different challenges that manufacturers face and the best ways to overcome them as they affect a digital transformation.

Digital Transformation Challenges for Manufacturers

Overcoming Resistance to New Technology

In the attempt to make a complete digital transformation, manufacturers face certain challenges. For example, many businesses in this industry rely on legacy systems that are more resistant to change. Integration of new technology and digitalization will need to spread across the entire supply chain, which can be difficult to facilitate.

Change management can also be difficult, as everyone on the manufacturing line must be on the same page regarding the transformation, requiring effective communication. Some may be resistant to change because they prefer the current business model.

Integration and Connectivity

One potential challenge that many manufacturers face has to do with integration and connectivity, but businesses can overcome this with the right solutions. 

Manufacturers will want to integrate different types of digital tools, platforms, and data sources to help streamline operations and provide data-driven insights. For instance, tracking software can help keep a close eye on all inventory and manufacturing processes, monitoring for any inefficiencies. Analytical tools can also provide meaningful data to gauge productivity and reliability, with insights that can help guide improvements to continually optimize manufacturing efficiency across the production line.

Smart Manufacturing and Industry 4.0

A growing number of manufacturers are attempting to facilitate effective digital transformation through the use of smart factories, the Internet of Things (IoT), and automation to revolutionize many manufacturing processes.

For example, Tesla's Gigafactory in Berlin uses various innovative technologies to make it the automotive industry's most advanced production plant in the world. The Berlin facility uses solar panels to allow for more sustainability while artificial intelligence allows for a process referred to as "automating intelligently."  

Meanwhile, non-profit healthcare organization BJC Healthcare's facility in St. Louis, Missouri uses IoT technology in its processes, including an innovative inventory management solution and radio frequency identification (RFID) technology that enables the tracking of all medical supplies. As a result, the organization has benefitted from improved performance and efficiency.

Cybersecurity Considerations

Another concern is that of cybersecurity as businesses become more reliant on potentially vulnerable digital technologies. 

Effective cybersecurity solutions will be able to protect systems from various types of attacks. For instance, systems should have protection against attacks on control systems that help manage all operations. These elements could include IoT devices and logic controllers that must have security measures in place to prevent exploitation. 

Critical data should also remain safe from unauthorized parties with password protection and encryption, with backup and disaster recovery solutions in place.

Empowering the Workforce

The workforce also benefits from digital transformation in a few different ways. Examples of this could include real-time data access that provides them with valuable insights allowing them to take action fast as needed. Remote monitoring can also help employees identify any potential issues and inefficiencies in manufacturing operations to assist with decision-making for further improvement.

The Future of Manufacturing

There are certain trends that have come about to help bring the manufacturing industry into the digital era, including innovations such as:

  • 3D Printing — This technology will help eliminate the current constraints in production capabilities to allow for optimized low- and high-volume manufacturing, with more agile development and faster production rates for physical parts.
  • AI-driven Production — Artificial intelligence in the manufacturing industry can help with the analysis of sensor data across operations, identifying potential issues and allowing for the prediction of potential incidents for continual improvement.
  • Virtual Reality — VR technology allows management teams to visualize assembly and production lines to better analyze them and identify any problem areas or room for improvement that can help optimize operations. VR can also assist with product design and development, safety training, maintenance, communication, and other operations.

Tackling the Challenges of Digital Transformation in Manufacturing

With the right approach, many organizations in the manufacturing industry can experience a complete digital transformation and overcome any hurdles they're likely to face along the way. 

Ultimately, a complete digital transformation will be the key to improving manufacturing operations and maintaining competitiveness.


About Ron Crabtree

Ron Crabtree, President of MetaOps, Inc., is an organizational transformation coach/trainer, operational excellence (OpEx) adjunct facilitator at Villanova University, Lean and Six Sigma (LSS) speaker, author and thought leader in business process improvement/re-engineering (BPI/BPR). He is a consultant to private industry and government agencies in supply chain management, design of experiments (DOE), statistical process control (SPC), advanced quality systems (AQS), program evaluation review technique (PERT), enterprise resource planning (ERP), demand flow, theory of constraints, organizational change management, and value stream/process mapping and management. Ron has a BA in Management and Organizational Development, is a Master LSS Black Belt, and is Certified in Production and Inventory Management (CPIM), Integrated Resource Management (CIRM), and Supply Chain Professional (CSCP) by American Production and Inventory Control Society (APICS). If you are an executive and would like to chat with Ron about anything related to business process improvement and operational excellence, please get on his calendar here:


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