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In Focus: Digital Transformation in the Manufacturing Sector

To drive market gains in today’s rapid pace of digitization, organizations must move decisively to align technology and digital with strategy and culture, choosing continuous improvement, agility, automation and transparency over business-as-usual.

Directory 2017
In one of his last keynote speeches before his retirement, John Chambers, Cisco’s CEO of 20 years, predicted that more than one third of businesses today will be dead in 10 years: “The only ones that will survive will turn their companies into digital, techie versions of themselves, and many will fail trying.” Today even the most analog of businesses are working to close the digital gap. Data drives business and companies that don’t act on it decisively while preparing for digital inevitability face extinction. The important question is how ready are you to capitalize on this trend?

Results from an August 2016 survey conducted by North Highland of more than 200 C-suite business leaders in the U.S. and U.K. stressed the importance of investing in and establishing more - and smarter - data sources, and in carefully and quickly harvesting that data to use it to manage by evidence.

For example, Boeing, the 100-year-old aerospace company and America’s biggest manufacturing exporter, announced in July 2016 a partnership with Microsoft to build a cloud-based platform for its portfolio of commercial aviation analytics tools. Traditionally known for developing and building state-of-the-art jet airliner technology, this move helped Boeing take advantage of more robust data intelligence. As a result, data in the cloud now helps Boeing manage inventory and optimize maintenance to help reduce flight delays caused by last-minute system malfunctions. By analyzing a large set of information, ongoing and in real time, Boeing gains insight on repetitive and redundant processes and is even able to build predictive models that can support planes from manufacturing through commercial operations. Companies leading digital evolution have embraced the following operating tenets: giving authority to data, organizing around products and objectives rather than functions or geographies, and designing processes to continuously transform.

In a recent Area Development interview, MAPI President and CEO Stephen Gold noted, “…manufacturing is in the midst of a new revolution, driven by digitalization and the integration of cyber and physical systems. The most important new technologies being developed have the potential to dramatically increase productivity in the coming decades.”

One area where productivity is increased by digitization is reduction of distance between the manufacturing site and the end consumer. Take, for example, the innovative, on-demand dental crown manufacturing process developed by dental supplier Henry Schein. The traditional process for dental crowns used to involve taking an impression of a patient’s teeth and shipping the impression to a lab where it was turned into a mold. Artisans then applied white enamel powder to the crown to match color and finally it was shipped back to the dentist for insertion in the patient’s mouth. The whole process could take weeks, even months to complete. Today, Henry Schein has digitized much of the crown-making process. A 3D-mapping image of affected teeth is taken and a dental assistant then designs the crown on a tablet. The design file is sent to an on-premise drilling machine about the size of a large toaster. Thirty minutes later, the crown is complete and ready for patient insertion. The entire design and manufacturing process takes less than an hour — and the dental chair gives patients a back rub while waiting.

To drive market gains in today’s rapid pace of digitization, organizations must move decisively to align technology and digital with strategy and culture. Companies leading digital evolution have embraced the following operating tenets: giving authority to data, organizing around products and objectives rather than functions or geographies, and designing processes to continuously transform. Robotics, automation, IoT, 3D printing and other disruptors will continue to promote digitization in the manufacturing sector.

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