Digital transformation is a priority for many manufacturers across the UK. Through digitalisation, manufacturers can achieve greater productivity, faster delivery and better customer service. Thanks to the Internet of Things (IoT), manufacturers can collect additional data and then act on what that data reveals.
For manufacturers, data generated by IoT devices provide real-time information which gives them increased visibility and control over their processes, meaning they can make improvements quickly, plan more effectively and build products faster.
Connecting manufacturing with IoT
Despite wide-ranging benefits, typical barriers to adopting IoT include a lack of knowledge of how to deploy low-cost IoT systems, a lack of understanding of the variety of possible IoT solutions available and uncertainty as to how IoT can generate value. To address these barriers, a number of projects led by researchers based at the Institute for Manufacturing (IfM), University of Cambridge (funded via Pitch-In through Research England’s Connecting Capability Fund) are working to help the manufacturing industry connect with IoT. These projects look to help a range of manufacturing companies overcome the barriers to IoT adoption, offering practical and applicable routes for manufacturers of all sizes.
Top benefits of IoT to manufacturing
There are many benefits of IoT in the manufacturing domain, including:
- Efficiency on the factory floor: IoT solutions help monitor and predict machine breakdowns, so manufacturers can schedule maintenance in advance and avoid unexpected problems. Digital work instructions can help workers find and fix issues more effectively, improving workforce productivity.
- Product design: Another benefit of IoT in manufacturing is that customer feedback and product usage monitoring can be more easily incorporated into the design process. This results in better products and improved customer satisfaction.
- Efficiency in logistics and supply chains: IoT solutions can help transform supply chains, resulting in more seamless and coordinated operations. Sensors provide multiple real-time information points, for example when used to track a truck’s location and the humidity and temperature levels inside its storage area. Combining IoT data can help handle uncertainty across the supply chain.
- Product quality: Using sensors to monitor production processes can provide insights into how fine-grained processing conditions relate to product quality. With IoT-enabled technology, the quality of a product can be predicted with more confidence, reducing the need for costly manual inspections.
Digitalisation strategies that work
As digital technology continues to open new opportunities for customer engagement, one IfM team has developed a digital transformation strategy blueprint for manufacturers to help companies understand how to formulate a digitalisation strategy that works for them.
New technologies and business models have already changed the way organisations interact with their customers, and soon, developments such as AI, robots and virtual reality will be a completely normal part of the customer experience alongside face-to-face engagements. However, despite the growing accessibility of data that enables companies to go beyond traditional metrics to track customer experience in more sophisticated ways, there is a lack of guidance on what a successful IoT digitalisation strategy looks like.
Digitalisation can be both an opportunity and a threat for firms, and the need to take decisions in a constantly shifting landscape means that deciding what to do and how to do it is hugely challenging. For those companies that do make the right decisions, the rewards are significant, whether through incremental improvements (better products and services and lower costs) or through a complete reinvention of their business model to create new value for themselves and their customers.
Since each firm is different and there is no ‘one-size-fits-all’ solution, companies need to know how to formulate a digitalisation strategy that works for them. This is where the IfM came in, working with other researchers at the University of Sheffield to develop a digital transformation strategy blueprint for manufacturers.
To understand the key factors that enable a successful formulation of IoT digitalisation strategy, the research team carried out in-depth interviews with 20 manufacturing companies and surveyed a further 290, ranging from some of the world’s largest multinationals, with up to 80,000 employees, to firms with fewer than 50 members of staff.
The companies covered a wide range of sectors, including aerospace, chemicals, food and drink, machine and equipment manufacturing, and pharmaceuticals. By looking at the determinants of IoT adoption such as the strategy formulation roles, the organisational context and the environmental context, the team categorised the firms according to where they were in their digital transformation journey. They found that firms take very different approaches to digitalisation, with some eager to exploit new technologies to achieve ‘first mover’ advantage where others prefer to minimise their risk by taking a more incremental approach.
Using the data, the team developed a framework to show how key dimensions of strategy formulation affect the strategising process, which in turn affects the content of the strategy and, ultimately, a firm’s performance. Their analysis showed that for firms in early digitalisation phases, the nature of the strategising process has an important impact on its outcome. The comprehensiveness of the process, how well structured it is, and the speed with which it is developed and executed, have a significant impact on the extensiveness and comprehensiveness of the strategy itself.
For those firms at a more advanced digitalisation stage, the same results were seen, but with less of an impact on speed. As a result of the project, the researchers produced a report for manufacturers with guidelines that can enable them to develop successful IoT strategy formulations. An executive training programme was designed and launched at the IfM to help firms to strategically design and manage their future digital services and customer experience. A new course, The new era of customer experience: Optimising engagement across digital, physical and social channels, aims to help attendees understand how new technologies and business models are changing the way organisations interact with their customers, and how companies can navigate the new era of customer experience.
- Digital transformation represents a top priority for manufacturers across the UK
- The Internet of Things (IoT) can hold the key to unlocking increased visibility, security and a better customer experience
- A good digitalisation strategy can help companies overcome the barriers to IoT adoption by helping them go beyond traditional metrics to track customer experience in more sophisticated ways
- There is no ‘one-size-fits all’. Companies need to know how to formulate a digitalisation strategy that works for them
- Researchers from the IfM, University of Cambridge, have developed a digital transformation strategy blueprint for manufacturers which shows what a successful IoT digitalisation strategy looks like
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