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Welcome to the official blog of the International Society of Automation (ISA).

This blog covers numerous topics on industrial automation such as operations & management, continuous & batch processing, connectivity, manufacturing & machine control, and Industry 4.0.

The material and information contained on this website is for general information purposes only. ISA blog posts may be authored by ISA staff and guest authors from the automation community. Views and opinions expressed by a guest author are solely their own, and do not necessarily represent those of ISA. Posts made by guest authors have been subject to peer review.

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Breaking Barriers to Digital Transformation in Manufacturing

Focusing on digital transformation in manufacturing opens significant opportunities for growth, improved profitability and enhanced resilience. However, individuals throughout an organization may resist making the changes necessary to succeed. Fortunately, knowing about some common obstacles and objections can help you be prepared to overcome them.  

A Lack of Executive Buy-In 

When people at the highest levels of an organization feel excited and motivated to make a digital transformation, those feelings tend to ripple through the workforce at large. However, when executives need more convincing of the need for digital transformation in manufacturing, people at other levels of the organization may have more doubts, too.  

One way to overcome this frequently seen barrier is to show reluctant executives that other leaders are moving ahead with their digital transformations. Then, people are more likely to realize they must act quickly to keep pace with peers.  

Consider a 2021 Deloitte study that revealed how more digitally mature companies performed better than less-mature ones. Those entities were approximately twice as likely to make annual revenue growth and net profit margins significantly above the industry average. 

Moreover, nearly two-thirds of private-sector respondents believed those that did not digitally transform within the next five years would be “doomed.” Another finding was that more than three-quarters of those polled said their organizations’ digital strategies accelerated their recoveries from the COVID-19 pandemic.  

It’s impossible to know for sure when the next major challenge may strike. However, these results highlight how digital transformation can be essential to preparedness and enable manufacturers to bounce back faster after difficulties. 

Challenges Ensuring Security 

All manufacturers have different goals for their digital transformation strategies. However, almost all their plans include more internet connectivity. Moving ahead with a digital transformation might mean installing smart sensors on critical machinery to get early alerts of issues. It could involve investing in a data analytics platform to identify bottlenecks.  

Many company leaders use digital transformations as opportunities to utilize manufacturing process analytics. Then, they can get actionable data to reduce accidents while tightening quality control and achieving more consistent workflows. No matter which directions manufacturers choose with their digital upgrades, those changes typically require connecting more things to the internet.  

That reality could put organizations at a higher risk of cyberattacks. A 2022 industrial security report by Barracuda indicated 94% of organizations had security events within the last year.  Moreover, 87% of such facilities experienced impacts that lasted at least a day.  

Two other interesting takeaways from the study suggested people should anticipate difficulties when strengthening their security. More specifically, 94% of respondents had failed security projects. But, there’s good news because 75% of organizations with completed security initiatives did not experience major impacts from cyber incidents.  

All these findings reinforce why any digital transformation in manufacturing must include a comprehensive security strategy. People can improve the likelihood of getting great outcomes by following well-known security frameworks and best-practice checklists. It’s also often advisable to hire security consultants. Those outside experts can assess what a manufacturer is already doing well and identify where gaps remain.  

Not Recognizing How Digital Transformation Can Support Sustainability 

Like those in many other industries, manufacturers are under increasing pressure to set and meet targets associated with more sustainable operations. However, a 2022 global report from Schneider Electric suggested many industrial companies are not where they should be in working towards those goals.  

It indicated 57% of respondents had set net-zero targets. Unfortunately, only 30% believed they were on track to meet them. Moreover, 23% of people said competing organizational priorities prevented them from making enough progress. It’s easy to imagine how a leader might think their company cannot simultaneously work on sustainability and digital transformation. 

However, separate 2022 research from ABB showed a digitalization focus often promotes sustainability. It showed how 96% of organizations polled viewed digitalization as essential to sustainability. However, there’s still work to do since only 35% of respondents reported launching Industrial Internet of Things (IIoT) products at scale.  

It seems survey participants have identified the gap, though. Nearly three-quarters of them (72%) said they were increasing IIoT investments specifically to support sustainability. Additionally, 46% cited future competitiveness as the most compelling reason to focus on operating more sustainably with the help of digital technologies.  

When people approach leaders about becoming more committed to a digital transformation in manufacturing, they may get pushback about how that approach would become a distraction rather than a business builder. The results here prove that’s not necessarily the case. Digital transformation often complements other goals.  

Failing to Connect Digital Transformation to Organizational Goals 

Embarking on a digital transformation in manufacturing must be a thoughtful and well-controlled exercise. However, some manufacturing leaders mistakenly decide to decrease digitalization investments primarily to keep up with peers that already have. When that happens, they often fail to achieve the greatest potential due to the need for a clear plan and concrete reasons for digital transformation. 

The ideal approach is to tie digital transformation to an organization’s overarching goals. Identifying some current pain points is a good way to get started. At LG Chem, which inspected the glass substrates for televisions, a difficulty arose due to how long the quality control process took. Every production line had five to six inspection processes within quality control.  

However, people at the company relied on Google Cloud to build an artificial intelligence inspection solution that significantly accelerated product checks. It could study 200 images in just 0.8 seconds. This improvement saved $20 million per year, or $1 million per production line.  

That example shows how it’s often worthwhile to focus on known problems with the organization before unveiling and implementing a plan for digital transformation in manufacturing. It then becomes much easier to determine if technological or process improvements are getting the desired effects.  

Choosing areas of focus and relevant metrics also ensures organizations stay on track with their digital transformation initiatives. Once executives start seeing the measurable payoffs, they often become more open to making further investments, too.  

Overcoming Barriers to a Digital Transformation in Manufacturing 

You’ve just learned some of the most common reasons people resist putting resources into a digital transformation for their manufacturing facilities. A final thing to remember is that humans typically dislike change, even with ample evidence in favor of doing things differently.  

It’ll likely take multiple discussions to start making headway with people nervous about starting or continuing a digital transformation in manufacturing. If you’re part of those conversations or can influence those attending them, recognize the necessity of listening to the worries or viewpoints that shape people’s beliefs.  

When individuals realize others hear and respect how they feel, they’ll be more open to having productive conversations. That’s often the first step in changing opinions.  

Emily Newton
Emily Newton
Emily Newton is the Editor-in-Chief of Revolutionized, an online magazine celebrating advances in science and technology.

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