Digital Transformation in Manufacturing and Overcoming Resistance to Change

The rise of technology ushered in an era of change and innovation, inspiring industries to transform and move from traditional methods to a digitally inclined society.

As professionals in manufacturing industries, it’s necessary to be involved with tech tools and anticipate changes to build a more resilient environment. It becomes vital for you to recognize and embrace digital innovation and transformation in the workplace.

The Rise of Digital Transformation

Digital integration has improved operations, processes, and overall performance in many industries, with the manufacturing industry standing out as a prime example.

According to Mordor Intelligence’s research, the market size for digital transformation in manufacturing is estimated to increase over time. With a compound annual growth rate of 19.40 percent, it’s expected to reach 876.10 billion dollars by the year 2029.¹

Through improved assembly lines and real-time data collection, digital transformation is undoubtedly present in the manufacturing industry. Technologies like AI and advanced robotics have shifted from buzzwords to becoming core components and strategic investments. According to Gartner, 80 percent of CEOs have been seen financing digital technologies in preparation for possible challenges and economic pressures.²

Benefits of Digitalization

Naturally, there are reasons behind the unprecedented rise of digital transformation. Incorporating the latest technology available massively improves many aspects of the manufacturing process. The following are examples of benefits companies, leaders, and professionals can experience:

1. Improved Production Efficiency and Quality

Implementing intelligent manufacturing solutions like automation, artificial intelligence (AI), machine learning (ML), and advanced analytics enables accurate tracking of all production and quality data. This real-time access creates visibility across the entire organization.

With the help of digital transformation, you can quickly identify critical areas for improvement. Using data analytics, teams can spot bottlenecks and quickly resolve problems. Digital technologies also lead to consistent production quality, as professionals report around 20 percent growth in labor productivity.³

2. Enhanced Flexibility and Responsiveness

Digital technology helps manufacturers transition from linear production to dynamic and flexible manufacturing capabilities. IoT connectivity and advanced analytics aid in gathering customer demand signals and monitoring inventory levels across the supply chain.

Thanks to digital transformation, manufacturing companies gain the flexibility and agility to be responsive to market needs, allowing demand-driven production schedules and improved decision-making.

3. Increased Workplace Safety and Sustainability

Implementing digital technology improves workplace safety by reducing human intervention in many dangerous production activities. Powered by ML and AI, automated systems allow complex machinery to take over tasks involving extreme temperatures, chemical exposure, or other hazardous scenarios.

Moreover, digital transformation offers valuable tools for professionals. For example, IoT wearables track employee movements and vitals to alert supervisors of any issues or dangers. These types of technologies minimize workplace injuries and overall exposure to health risks.

The Resistance to Change

While the potential benefits of going digital are undoubtedly compelling, some manufacturing companies may still be reluctant when it comes to actual implementation.

At its core, digital transformation requires a radical evolution of systems and processes that have been around for decades. Although there is existing proof of its advantages, it can still be difficult for professionals to rely heavily on emerging technologies without absolute proof of assurance or success, along with the necessary adjustments and modifications to their existing systems.

Challenges of Digital Transformation in Manufacturing

The resistance of manufacturing professionals to embrace tools such as data analytics and predictive maintenance is rooted in valid concerns and points of view. Some examples of challenges that cause friction for digital transformation are:

1. Legacy Mindsets

Manufacturing has traditionally prioritized hardware expertise and perfecting repeatable processes. Many senior leaders may have successfully risen to positions of authority rooted in dated capabilities, making them prone to dismissing the need for digital means until the disruption is blatantly evident.

2. Employment Displacement

As industrial robots, AI, and automation rise, the manufacturing workforce worries about being replaced with machines that can do their job with improved accuracy. This fear leads to an aversion to the idea of digital transformation.

3. Cybersecurity Threats

Connecting operational systems and opening them up to external data flows greatly expands the possibility of attacks for cybercriminals. This may make leaders reluctant to implement digital initiatives in their company processes.

Keys to Successful Implementation

Embarking on the digital transformation journey within the manufacturing industry requires a strategic approach that acknowledges and addresses the unique challenges professionals face. To navigate the complexity of digital initiatives and strategies, consider the following tips to achieve a more successful digital implementation.

1. Communication and Transparency

As a manufacturing leader driving digital transformation, it’s vital to maintain frequent and transparent communication between all teams.

Concerns about job displacement or inability to adapt to new technologies often stem from challenges in change management and unclear decision-making. To support change, companies and leaders can engage in and provide learning opportunities such as forums, meetings, and newsletters to share the rationale, progression, benefits, and plans of digital transformation and automation.

Emphasize how new technology can transform processes and aid employees—not replace them. Highlighting the full intention to retain and support the current workforce can significantly ease the roadblocks of digital adaptation within supply chains.

2. Employee Inclusion and Feedback

Actively involving all employees during the initiation of digital change strategies can improve efficiency in long-term cross-functional plans. Whether it’s production floor workers, supervisors, or engineers, gaining their insights can help generate inclusive frameworks for implementation.

Engage employees at all levels and encourage them to share their perspectives and concerns. Actively seek feedback on the proposed changes while incorporating the collective wisdom of the workforce into the implementation strategy. Document concerns in change management plans for future reference.

This inclusive approach not only makes employees feel valued but also increases the likelihood of identifying potential challenges early on, resulting in more effective problem-solving and a smoother transition from traditional to digital.

Read Article: 8 Great Questions For a One-on-One With a Manager

3. Demonstrate Clear Benefits

To embrace digital transformation, it’s imperative to obtain a clear understanding of the tangible benefits it brings to the organization and overall manufacturing process.

Leaders must explicitly communicate these benefits by illustrating how adopting digital technologies will enhance efficiency, reduce errors, and create new growth opportunities. Providing real-world examples and case studies specific to your industry can also help professionals visualize the positive impact of digital transformation on their daily tasks and long-term career development.

4. Incentives and Shift in Management Strategies

Change can be challenging, which makes it all the more necessary for companies to implement effective management strategies.

Consider complementing new digital tools and work statement changes with monetary or non-monetary incentives to motivate teams to embrace digitalization. Recognizing milestones and celebrating them can significantly ease the transition from traditional processes.

Make learning digital competencies rewarding beyond just maintaining job stability. Company leaders can make implementations smoother by allocating change management resources like floor walkers and user assistants.

5. Hire Digital Transformation Leaders

Although adapting to digital systems is slowly becoming widespread in the manufacturing industry, not every professional is an expert. Most still require specific guidance when it comes to the digital transformation process.

One of the keys to successfully implementing digital transformation is equipping people with the proper knowledge. Consider hiring dedicated program managers, data scientists, and technology specialists to spearhead your company’s transformation.

When internal employees are uncertain about transformation, it’s essential to reach out to external resources to accelerate modernization.

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References

“Digital Transformation in Manufacturing Industry Size & Share Analysis – Growth Trends & Forecasts (2024-2029).” Mordor Intelligence, 2024, www.mordorintelligence.com/digital-transformation-market-in-manufacturing.
Gartner Team. “2023 CIO Agenda Insights for the Manufacturing Industry.” Gartner, 2023, www.gartner.com/manufacturing-digital-transformation.
Jaumotte, Florence, et al. “How Pandemic Accelerated Digital Transformation in Advanced Economies.” IMF, 21 Mar. 2023, www.imf.org/how-pandemic-accelerated-digital-transformation-in-advanced-economies.