Top 5 Digital Transformation Trends for Manufacturers

At a glance

• The main takeaway: Manufacturers are embracing digital transformation as a way to stay competitive in the marketplace while filling gaps illuminated by the COVID-19 pandemic.
• Key areas of focus: From predictive analytics to ESG to the IoT, there are five prominent trends manufacturers are prioritizing as they start their digital transformation roadmap.
• Next steps: Contact Aprio’s Digital Transformation and Cybersecurity Advisory team to develop an action plan for incorporating more technology into your manufacturing business and processes.

Schedule a free consultation today

The full story:

2020 put organizations of all sizes to the test and created a host of unprecedented roadblocks. Manufacturing, in particular, is one of the industries that was hit hardest by the pandemic. Global shutdowns squeezed supply chains, and many companies still have not recovered.

In fact, according to Fictiv’s 2021 State of Manufacturing Report, a whopping 95% of industry leaders said the pandemic will have long-term effects on their businesses, while 94% expressed concerns about the stability of their current supply chains.[1]

So, how are manufacturers responding to these challenges and keeping their heads above water? The vast majority of them — 91%, according to the Fictiv report — are embracing digital transformation and increasing their investments in technology.[2]

Here are five digital transformation trends in manufacturing to watch out for.

1. “Industry 4.0” technology is leveling up in a big way

Over the past couple of years, many manufacturers have started implementing advanced technologies — including artificial intelligence (AI), 3D printing and machine learning — to increase automation and enhance their operations and efficiencies. But the pandemic has transformed these technologies from a “nice-to-have” into a necessity. Increases in e-commerce and online shopping fueled by the pandemic are pressuring production processes to move faster and more cost effectively.

Thanks to innovations in technologies like AI, for instance, manufacturers are introducing robotics on their factory floors, which contributes to decreasing costs and helps increase capabilities for production. In fact, according to the International Federation of Robotics, there are 2.7 million robots working in factories worldwide.[3] We can expect to see more of these innovative tools on factory floors as manufacturing technology advances over the coming years.

2. IoT will influence process integration

Supply chains were among the many aspects of the manufacturing industry that fell victim to the pandemic. To avoid future disruptions and keep production channels stable, manufacturers are leaning into the internet of things (IoT) to help boost process connectivity. According to a recent report from Mordor Intelligence, the global IoT market in manufacturing is expected to reach $575.36 billion by 2025.[4] From operational procedures and inventory to customer and employee communications, expect to see businesses rely on IoT platforms to digitize and integrate every aspect of the production process.

3. More manufacturers will embrace technology that helps reduce their carbon footprint

Another trend influenced and fueled by the pandemic has been the rise of environmental, social and governance (ESG) practices across industries, and manufacturing is no different. According to a report by the Manufacturers Alliance for Productivity and Innovation (MAPI), manufacturers expect their sustainability efforts to advance business objectives, with 73% seeing the influence reflected in product development.[5]

The move toward digitization in manufacturing is fueling more sustainable practices, and we can expect that they will only grow more popular and prevalent over the next decade. Digitization of product development and critical manufacturing processes boosts resource and information efficiency (especially through the introduction of smart technologies), while reducing energy use and waste and emissions from more traditional manufacturing processes.

4. Predictive maintenance will help decrease downtime

One of the biggest roadblocks in manufacturing is equipment failure. Not only is persistent machine downtime detrimental from a cost perspective, it’s also dangerous for factory employees. That’s why many manufacturers have embraced predictive analytics tools, which help companies keep their machines running smoothly, efficiently and safely by analyzing past machine errors to recognize patterns and solve them before failures happen.

5. Expect major supply chain shifts

Equipped with many important lessons learned from the throes of the pandemic, manufacturers are making some big changes to their supply chains to avoid crises in the future. Aside from expanding their supplier lists to avoid material shortages and building relationships with suppliers closer to home, they’re also leveraging technology to help shore up gaps.

For instance, some manufacturers are employing 3D printing to create more materials in-house, while others are introducing new supply chain monitoring systems run off AI technology to alert them to potential shortages and hiccups before they happen.

The bottom line

Aside from preventing potential disruptions and increasing efficiencies and cost effectiveness, embracing technology will be critical for manufacturers who want to stay competitive in the marketplace, especially from a talent and customer perspective.

At Aprio, our Digital Transformation and Cybersecurity Advisory team brings together deep experience in working with manufacturers and can help create a digital transformation roadmap to put you in the best-possible position for success.

Click here to schedule a free consultation with our team today.

• About Aprio’s Digital Transformation and Cybersecurity Advisory Services
• Get Set for Tech Transformation with the Right Manufacturing Investments
• Start at the Top When Hiring for Future Employment Skills in Manufacturing

[1] “2021 State of Manufacturing Report,” Fictiv, accessed August 2021.

[2] Ibid, 1.

[3] “IFR presents World Robotics Report 2020,” International Federation of Robotics press release, September 24, 2020, accessed August 2021.

[4] “Internet-of-Things (IoT) Market in Manufacturing: Growth, Trends, COVID-19 Impact, and Forecasts (2021 -2026),” Mordor Intelligence, January 2021, accessed August 2021.

[5] Maria Negron Kneib, “Intersecting Sustainability: ESG and Smart Manufacturing Trends,” Manufacturers Alliance for Productivity and Innovation (MAPI), January 23, 2020, accessed August 2021.