Skip over navigation

Contact us to learn more about OroCommerce's capabilities

Contact us

B2B eCommerce

Digital Transformation In the Manufacturing Industry: Trends, Challenges, and Examples

February 1, 2022 | Oro Team

Back to
navigation
back top

Originally published March 3, 2020, updated February 1, 2022

The impact that digital transformation in manufacturing has on businesses, their suppliers, customers, and other third parties is staggering. Whether you’re selling precision machinery or construction material eCommerce, there’s many ways technology can help you. Digital technologies help manufacturers improve operational efficiencies and optimize different business areas, from product development to the supply chain.  

Advanced manufacturing technologies have numerous advantages, such as helping companies unlock digital business models, adapt to changes faster, or even anticipate changes before they occur – all crucially important to manufacturing. It’s not surprising that IDC expects that by the end of 2022, half of all manufacturers will be invested in improved resilience, data analytics, and artificial intelligence to drive smart manufacturing. 

As the digital landscape shows no signs of disappearing, this article will answer some relevant questions about smart manufacturing: what is digital transformation in manufacturing, and which technologies are driving it? What makes it important? What’s holding companies back from investing in a digital transformation journey? And how can they prepare to take the plunge?

What is Digital Transformation in the Manufacturing Industry Today?

Digital transformation in manufacturing means enhancing traditional manufacturing processes, products, and workforce with digital technologies, such as automation software, eCommerce, sensors, industrial robots, and more.

The goal of digital transformation in manufacturing is to:

  • Improve operational efficiency, reduce costs, and maximize revenue
  • Increase the quality of manufactured goods
  • Improve customer experience (e.g. streamline the ordering process)
  • Enhance decision-making capabilities 
  • Adapt quickly to changes in the customer demands and market to secure competitive advantage

The state of manufacturing is constantly changing due to volatility in global, economic, and policy landscapes. Not to mention, many manufacturing businesses were severely hit by the pandemic and needed to adapt quickly to stay afloat.

Outside of these changes, we’re seeing many technological advancements promising to disrupt the sector. Greater network capabilities of 5G, a push for IoT, Industry 4.0, machine learning, and data-driven predictive analytics all leave a mark on manufacturing. They brought about a new concept of smart factories, driven by enhanced efficiency and sustainability. 

Customer expectations and solving customer pain points are equally important drivers for digital transformation of manufacturing. With eCommerce for manufacturers, CRM, ERP platforms, and manufacturing execution systems, customer data is more visible than ever, and poor experiences become too big to ignore.

Challenges of Digitalization in Manufacturing

Just like in any industry, many things can hold manufacturers back from digital transformation initiatives, whether it’s selling the idea to upper management, or fighting over fears surrounding business and personnel resources.

Nevertheless, starting the discussion can offer manufacturers a candid look at their inefficiencies, their resource allocation procedures, and open them up to new technologies. 

  1. Any digital transformation initiative can place demands on the IT department’s technology stack and development structure. This may require the use of new release cycles, processes, APIs, or innovating in other areas of digital infrastructure and performance.
  2. Digitalization in the manufacturing industry incurs costs on human resources: the workforce can feel disillusioned in the face of changing workplace realities and requirements. Employee reluctance and communication issues also pose a challenge to manufacturers.
  3. Being in a dynamic and cash-sensitive industry, manufacturers need to address any budget and investment limitations carefully. This can lead to reservations about sticking to the factory digital transformation strategy.
  4. Manufacturing operations are complicated with tight schedules and numerous resource constraints. As a result, management doesn’t take kindly to ill effects on operations before seeing any benefits delivered by their digital transformation for manufacturing.

Even though embarking on a digital transformation journey may be challenging, it’s not done alone. There are numerous digital transformation consultants and advisory services out there to assist manufacturers in their journeys. Additionally, countless digital transformation manufacturing success stories and case studies show how businesses capitalized on smart manufacturing.

Examples of Digital Transformation in Manufacturing

In the manufacturing industry, digital transformation is not just about automating the assembly line, better tracking inventory levels, or optimizing the supply chain. It involves a change in mindset, approaches, and new ways of problem-solving. Here are just some examples of how manufacturers benefit from digital transformation strategies:

Ecommerce

Selling to businesses is difficult, and it can be counterproductive with a platform that doesn’t address the needs of today’s business buyers. Wastequip, a leading manufacturer of waste handling equipment, started its digital transformation with the strategic goal to simplify the ordering process for customers. For this, the company implemented a B2B eCommerce solution to create an easy-to-navigate site, where customers can search, order, and track their purchases. Digitization through eCommerce has been successful for Wastequip: it enabled the organization to boost its online presence, with an 8x growth in web traffic.

Big data and data analytics

The impact of big data in manufacturing cannot be understated: NIST has demonstrated that General Electric increased production capacity up to 20% while lowering material consumption rates by 4% with machine learning alone.

One California-based fruit supplier increased production by 50% without hiring a single employee. What made the difference was an automation system that includes data-driven history analysis, alarm notification, and other big data reporting capabilities.

IoT

With IoT supported by cloud systems such as Microsoft Azure, Tetra Pak could use real-time data to accurately predict when their dairy processing equipment needs maintenance.

Furthermore, inefficient data processing from wearables directly translates to inefficiencies in the workforce. Honeywell and Intel created a Connected Worker Proof of Concept to merge sensor data with worker-worn devices.

Advanced manufacturing technologies

Innovative manufacturing methods such as additive manufacturing help manufacturers overcome the limitations of traditional production methods. For example, in the automotive industry, Ford is using additive manufacturing to produce polymer spare parts for its vehicles faster than traditional molding processes would allow. 

Benefits of Digitization in Manufacturing

As digital technologies evolve all around us, manufacturering companies are increasingly coming to crossroads: to step up their digitization efforts or stick with the tried and tested methods. Digital transformation for manufacturing creates a lot of value in the manufacturing sectorin the long term by unlocking many benefits, including:

Better data usage

Digitization in manufacturing is about optimizing data usage in operations, and manufacturers can utilize data more effectively – feeding it to their B2B eCommerce, ERP, CRM, finance, warehousing systems, and more.

Improved processes

Digital transformation in manufacturing has the opportunity to revolutionize operations. For example, real-time insights can help monitor, resolve and even predict situations to optimize machinery lifecycles. This helps maintain error-free operations and avoid costly rework and disruptions.

Increased innovation

Innovation encourages innovation, so a strategy for digital transformation in manufacturing sets the stage for a holistic approach to optimization. For example, deploying automated smart factory capabilities in your ERP helps you improve your business performance and the supply chain.

Smarter outsourcing

By introducing remote monitoring, troubleshooting, proactive maintenance coupled with data at their fingertips, manufacturers can prevent disruptions and eliminate risks of rushed solutions.

Customer-centricity

Manufacturers can provide greater value to customers by launching a B2B eCommerce platform with separate portals for regions, brands, or clients. Moreover, manufacturers can use sales data that accurately predict customer demand cycles and adjust their production accordingly. 

How to Prepare for Digital Transformation in Manufacturing

Just like manufacturing, information and technology is not going anywhere. Because suppliers and distributors are also being exposed to Industry 4.0, IoT, and machine learning, they have grown to expect the same from manufacturers.

To keep up with their partners’ and clients’ expectations, manufacturering organizations have no choice but to embrace smart manufacturing. The adoption of digital technologies empowers companies to achieve cost reduction in operations, deliver better customer service, and make operations more agile. 

Businesses looking to learn more about digitalization in manufacturing can explore the four-part blog series where we share business cases, success stories, best practices, and tips on succeeding in manufacturing digitization.

How can Oro help in your digital transformation journey?

Today’s businesses rely on complex and company-specific processes to attract customers, grow sales, and maintain all types of business relationships, such as quotations, contracts, and ordering functions. Thankfully, Oro, Inc. is perfectly positioned to help businesses harness the power of digitization in manufacturing.

Oro’s CRM, being fully integrated with OroCommerce, offers enterprise businesses a unified view of B2C, B2B, sales, and customer data. This leads to greater resistance to market forces, increased agility, and the ability to seize new opportunities. 

Furthermore, Oro’s smooth synchronization with ERP, PIM, and eProcurement and marketing systems gives you a single source of truth for the entire business. With connected systems, businesses can better work towards a common goal and offer omnichannel experiences, driving digital transformation in retail, wholesale, distribution, and more.

Lastly, Oro offers a time-tested platform with an ecosystem of developers, worldwide technology experts, partners, and solution integrators. This means the right solution to the most difficult B2B eCommerce challenges is never out of reach, as Oro partners are focused on helping clients succeed and ensuring the best ROI from their technologies.

Wrapping Up…

For the most part, digital transformation in manufacturing unlocks many opportunities, including customization, efficiency, agility, and automation.

However, any digital transformation strategy must never lose track of changing times. That’s why manufacturers should always remember that while digital transformation is inevitable, it should not be seen as a solution to any single area of manufacturing. Instead, creating a manufacturing digital transformation roadmap should be looked at as an ongoing process of getting and staying at the top of your market.

Questions and Answers

What is Industry 4.0?

Industry 4.0 describes a new phase in the evolution of technology that focuses heavily on interconnectivity, automation, intelligence, and real-time data. 

Industry 4.0 is about the integration of previously disparate systems and processes through computer systems and online networks to enable business agility, flexibility and operational performance. 

How is digitization transforming the manufacturing industry?

Digitization in manufacturing helps positively transform processes both on the factory floor and in the management operations. Digital technologies, like AI, IoT, 3D printing, digital twins change how products are designed, produced, and maintained, while helping businesses optimize the energy footprint of factories and supply chains. 

To streamline sales and operations management processes, manufacturers also invest in solutions, like eCommerce, CRM, and ERP. They help synchronize business functions, increase sales, and improve the overall customer experience.

How can manufacturing companies use industrial eCommerce to digitize their business?

B2B eCommerce software enables manufacturers: 

  1. Unlock online selling business models to increase sales
  2. Introduce self-service streamlining the ordering process
  3. Create personalized purchasing experiences for customers 
  4. Sell direct to customers without disrupting your current sales channel
Back to top

You will be redirected to [title]. Would you like to continue?

Yes No

You will be redirected to [title]. Would you like to continue?

Yes No