Despite the clear advantages, many manufacturers still face significant barriers to fully embracing digital transformation.
AI, the Internet of Things (IoT), robotics, advanced data analytics and more can enhance production capabilities, reduce waste, improve quality control and boost operational efficiency. Additionally, manufacturers can gain better visibility into their supply chains, optimize logistics and predict equipment failures.
The pandemic also accelerated the need for digital transformation, as remote work and distributed production have highlighted the importance of connected, adaptable and automated systems. Yet, despite these advantages, many manufacturers are moving cautiously.
A joint survey between Sikich and Manufacturing Dive shed light on the challenges, revealing that concerns surrounding cybersecurity, interoperability with existing systems and a lack of cohesive IT strategies are holding companies back.
More than a third of executives cite security and cyber risks as significant barriers
As manufacturers adopt more connected devices, integrate IoT sensors and link their machinery to cloud-based systems, they expose themselves to new risks. Many legacy systems lack the security they need, making them vulnerable as they integrate into more complex, connected ecosystems.
Cybersecurity breaches can have severe consequences, including operational downtime, data loss and financial damage. In some cases, attacks can slow or halt production.
- Regular vulnerability assessments and penetration testing can help manufacturers identify weaknesses in their systems.
- Implementing multi-factor authentication (MFA) and encryption for all data transmissions can provide an extra layer of protection.
- Employee training is critical to prevent human error, which remains a significant vulnerability in many organizations.
- Manufacturers should also ensure that their cybersecurity measures are scalable, allowing them to protect their systems as they expand.
Nearly half report the absence of a cohesive IT strategy
A common roadblock to digital transformation is the absence of a unified IT strategy. When systems don’t communicate, it can lead to inefficiencies, security gaps and misaligned priorities. The lack of direction also results in siloed systems, where different departments operate independently, preventing the integration of data and processes across the organization.
For digital transformation to succeed, manufacturers must develop a comprehensive strategy so that all systems align and work toward the same goals.
- Manufacturers should start by auditing their current systems and processes, identifying gaps and redundancies.
- A centralized data system, or single source of truth, enables departments access to critical information in real-time.
- Clear communication channels and cross-departmental collaboration are essential to working toward the same digital transformation goals.
- Change management initiatives can guide employees through the transition and increase adoption.
47% struggle to integrate new systems with existing technologies
The issue of interoperability, the ability of different systems to communicate and work together, has long plagued manufacturers. Manufacturers must upgrade their legacy systems to fully embrace the promises of Industry 4.0 and beyond, a movement characterized by smart factories, automation and advanced data analytics.
However, for many manufacturers, replacing legacy tech is hindered by high costs and concerns about potential downtime. Instead, where possible, they must find ways to make these older systems compatible with modern digital tools.
- Modularity can help manufacturers add new technologies incrementally without disrupting current operations.
- Data integration platforms and middleware solutions can bridge legacy systems with newer technologies, ensuring that data flows smoothly between different parts of the operation.
- Establishing industry-wide standards for data formats and communication protocols can promote compatibility between different systems.
- Long-term planning is essential. Manufacturers need to evaluate which legacy systems are still adding value and which should be upgraded or phased out.
It’s time to move forward
The future of manufacturing lies in the integration of advanced technologies, the ability to leverage data and the agility to quickly and efficiently respond to market changes. But manufacturers can’t reap these benefits if they don’t proactively address these challenges head on.
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Bob Buechel is a solution architect and enterprise sales executive for Sikich. He is skilled in business process, sales, supply chain, Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM). He has a bachelor’s degree focused in operations management and a master’s in business administration from the University of South Carolina.