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What Is Digital Transformation in Manufacturing?

A company’s capacity to adapt to a changing business environment plays a major role in determining its ultimate success. Manufacturing companies constantly strive to improve their ability to respond successfully to customers’ changing needs and preferences, disruptions in their supply chains, ever-increasing competition, and similar challenges.

In the past, manufacturing companies relied on methodologies such as benchmarking, total quality management, and Kaizen to improve their business and production processes. These methodologiesmanual in naturehelped industrial firms to achieve only incremental improvements in specific areas. The major constraints of these methodologies are their inability to access all the necessary and comprehensive information, handle large amount of data, and effectively analyze them to take appropriate decisions.

Emerging digital technologiessuch as the industrial Internet of Things (IIoT), artificial intelligence, and so onhave the potential to help manufacturing companies overcome these constraints. An increasing level of awareness among manufacturers of the capabilities of these technologies is the main reason for the present buzz about digital transformation.

Digital transformation is the process of intentionally bringing about comprehensive changes, after due deliberation, by leveraging emerging digital technologies so as to achieve overarching objectiveswhich, in the business context, often includes improving a company’s business and production processes, enhancing customer and shareholder value, becoming more efficient and productive, and such other goals. Through such transformation, companies can overcome market challenges, ensure customer satisfaction, improve performance, and become future-ready.

Digital transformation is a powerful tool in the hands of companies who want to achieve transformative goals. The overwhelming industry consensus and expectation is that a manufacturing company will be able to achieve its performance improvement objectives through digital transformation.

Digital technologies are extremely powerful tools that companies can effectively leverage to enhance their capabilities to acquire a large amount of informationand then process, analyze, share, and visualize it. A physical entity, such as a pump or compressor, embedded with an internet-connected edge computing device and control components consisting of sensors and actuators, becomes capable of self-monitoring. It can generate information about its own functioning, and can share this information with other cyber-physical systems as well as on-premise and cloud computing resources.

While edge computing empowers the physical entity to process data that demands lower latency and faster response closer to the source itself, cloud computing enables more complex tasks to be performed and the internet provides communication connectivity. Internet-enabled and networked cyber-physical systems and computers are cost-effective and can efficiently share, process, analyze, and store massive amount of information.

One of the most prominent uses of digital transformation efforts is the field of data analytics. It helps companies examine datasets to discover previously hidden information and understand interrelationships among seemingly disparate areas. By using this technique, companies can uncover patterns and thereby extract valuable insights from raw data.

Within the field of data analytics, descriptive analytics studies data to describe what is happening, and predictive analytics predicts what will happen under a set of conditions. Artificial intelligence technology, with its cognitive capabilities, can be used to predict potential outcomes under a set of plausible conditions; hence, it can be useful for problem-solving and decision-making. Digital twin technology—another powerful tool—can be used to create a digital representation of a physical object, such as a power plant or a blast furnace; with its help, one can imitate the working of the physical object so as to study and improve its performance.

Digital transformation is the way forward for manufacturing companies to effectively and comprehensively evolve all their business and production processes and operations for marketplace success. Manufacturing companies have to adopt a digital transformation strategy to make a successful transition from the third era to the fourth era of industrialization.


This article is a product of the International Society of Automation (ISA) Smart Manufacturing & IIoT Division. If you are an ISA member who is interested in joining this division, please log in to your account and visit this page.

Rajabahadur V. Arcot
Rajabahadur V. Arcot
Rajabahadur V. Arcot is an independent industry analyst/columnist and digital transformation consultant, a life member of ISA and member of ISA's Smart Manufacturing & IIoT Division. He is an ISA accredited mentor and trainer, and authors industry and technology trend articles, market research reports, case studies, white papers, and automation and operational technology insights.

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