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Manufacturers Trending to Digital

Lisa AndersonBy Lisa Anderson

According to the Hackett Group, 77 percent of companies have strengthened their commitments to digital transformation because of the COVID-19 crisis. In fact, not only are the commitments strengthening but also the pace of adoption is increasing. A McKinsey survey found the pandemic has significantly accelerated the pace of adoption of digital transformation technologies. Clients and colleagues are seeing the critical importance of using technology for a win-win-win, creating a safe working environment that is efficient, cost-effective, resilient and responsive to customer needs.

Even before COVID-19, executives were gaining interest in the digital transformation and Industry 4.0. The Amazon Effect has been driving the need for quicker deliveries, 24/7 accessibility, customizable products, easy returns and a superior customer experience. Achieving these increased standards while maintaining margins had manufacturers searching for solutions. Thus, automation, digitization and Industry 4.0 concepts gained in popularity. Large companies pursued these strategies, but small and medium-sized companies were more challenged with the upfront investments required and not knowing if they would yield returns on investments near-term so they could justify moving forward. Yet not investing and being passed up by the competition was not attractive, either.

The pandemic has proven that those companies that were better prepared and further down the digital transformation roadmap fared better. These companies had better visibility into their supply chains, were better able to respond to changing customer requirements, were able to accommodate for social distancing and could flex capacity more quickly than their counterparts. All is not lost. It is time to jump into the deep end of smart manufacturing and the end-to-end digital supply chain journey.

Should companies immediately purchase robots and 3D printers? Not necessarily. Start by understanding the new business environment. What will the next normal look like for the industry? Adapt strategies to thrive with changing customers, new buying behaviors, an evolving competitive landscape and with the end-to-end supply chain. Think through how these changing conditions will impact talent needs and adapt the talent strategies to accommodate. These will drive changing digital and technology needs, which will require adapting the technology strategies to align.

Although the technology roadmap will need to be reevaluated to determine what will best support the business objectives, a modern base infrastructure to support scalable, profitable growth will no doubt be needed. Look at the enterprise resource planning (ERP) system. How does it support changing customer requirements and the ability to grow the business rapidly and profitably without hiring an army of people? Begin with a modern base, just like starting with a solid foundation when building a house. Add customer differentiators and profit drivers by thinking about the broader digital customer journey in addition to how to increase operational effectiveness with concepts such as robotics, automation, IoT and predictive maintenance, augmented reality and the like. Big data and predictive analytics will tie it together with an advanced business intelligence solution to not simply analyze data but also to predict areas for future focus to increase business value.

The most successful executives will focus on those technologies that best support the successful execution of their strategies. Instead of jumping on the latest fad bandwagon, take a brief step back to realign the strategies and evaluate what will provide the greatest return on investment. On the other hand, do not delay for lengthy studies. Those companies that succeed post-COVID will be those geared for speed, agility and responsiveness simultaneously. Align the technology roadmap and take tangible steps forward with the digital transformation.

Lisa Anderson is the founder and president of LMA Consulting Group Inc., a consulting firm that specializes in manufacturing strategy and end-to-end supply chain transformation that maximizes the customer experience and enables profitable, scalable, dramatic business growth. She recently released “Future-Proofing Manufacturing and The Supply Chain Post COVID-19” as an ebook that can be found at

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