Two in three manufacturers say COVID-19 has accelerated their digital transformation

Rising numbers of manufacturing businesses are turning to digital technologies to help improve their operational resilience and efficiency and support their customer growth strategies.

 More than two-thirds of manufacturers (67%) have accelerated their adoption of digital technologies as a result of the Coronavirus pandemic, according to a major new report published today by The Manufacturer and IBM.

With just 16% of manufacturing organisations choosing to pause their adoption projects, it is clear that the majority of businesses now recognise the strong correlation between digital tools and increased productivity, efficiency and resilience.

Key Findings

  • 67% of manufacturing decision makers say their adoption of digital technologies has accelerated as a result of the pandemic
  • 92% say their most significant business imperative is improving operational efficiency
  • 88% say that COVID-19 has resulted in their organisation placing greater emphasis on operational resilience
  • Cybersecurity, data analytics and cloud computing are the technology areas the greatest proportion have already implemented or are working towards implementing
  • Carving out the time to focus on improvements (i.e. working ‘on’ the business rather than simply ‘in’ the business) is the most significant barrier to adopting new technologies currently
  • Looking ahead to the next 18 months, the most significant barrier to technology adoption is organisational culture
  • Greater support regarding determining the business case, identifying a benefits-backed roadmap and upskilling the workforce would help accelerate the adoption of digital technologies 

The 2021 DIGITAL TRANSFORMATION ASSESSMENT reveals that the vast majority of senior manufacturing professionals view cybersecurity and advanced data analytics as especially important to their business goals – cited by 92% and 90% participants, respectively.

Also ranked highly were digitising and automating many of the process involved with overall equipment effectiveness (OEE) and manufacturing/enterprise resource planning (M/ERP).

Alongside increased efficiency and visibility, this shift is being driven by businesses looking to free workers from time-consuming, monotonous tasks in order to focus on areas where they can add value.

This strategic importance is reflected in the top three technologies manufacturers have already implemented or are working towards implementing – cybersecurity (88%), advanced analytics (79%) and cloud computing (79%).

The report also highlights the increased focus organisations now have towards employee health and safety, with 83% of manufacturers saying their organisation places greater emphasis on worker wellbeing now compared to 12 months ago.


IBM - 2021 DIGITAL TRANSFORMATION ASSESSMENT Report


Commenting, Jonny Williamson, Editorial Director of The Manufacturer and author of the report, said: “As the report makes clear, the immediate focus has been on improving operational efficiency and resilience in order to achieve maximum output with minimum outlay – ultimately, to keep factory doors open. Businesses have faced disruption at every turn and the vast majority have demonstrated an incredible capacity to embrace change at speed.

“It’s encouraging to see cybersecurity, analytics and cloud computing as the most widely adopted technology use cases. This ‘Process Transformation’ represents the critical first step in a digital journey that enables future ‘Business Model Transformation’.

“If 2020 was the year for internal digital transformation, 2021 is when attention will turn to the external, customer-facing areas of an operation. That may present greater challenges for businesses, but equally it will provide greater rewards for those who get it right.”

Rishabh Arora, Industry 4.0 Leader at IBM UK, commented: “The pandemic was a wake-up call that disrupted the as-is more than anyone could have previously anticipated. For many, it has been a bitter reality: painful, costly, still unresolved. For a few lucky others, it has offered an unforeseen windfall.

“Either way, executives must accept that pandemic-induced changes in strategy, management, operations and budgetary priorities are here to stay. As seen in this report, the pandemic has made executives more trusting of what technology can do, and they are pushing ahead with investments to digital transformation.

“This presents an enticing opportunity for executives who can manage complexity and drive competitiveness by tying digital transformation to business priorities – while others are still waiting for things to ‘go back to normal’.”


IBM - 2021 DIGITAL TRANSFORMATION ASSESSMENT Spreads


According to the report findings, manufacturers are focusing their digital investments in four areas: IT and/or data systems, product and/or customer growth, efficiency improvements and collaboration.

However, a number of obstacles need to be overcome in order to accelerate industry’s adoption of new technologies. Manufacturing decision makers say that their most significant barriers include resourcing and time (58%), securing internal funding (52%) and organisational culture (50%).

Several respondents mentioned difficulties around finding the right stakeholder or champion to support a project and push it through. This is a particular challenge for UK-based businesses who need sign-off from overseas, especially with international travel restrictions in place.

Manufacturing organisations also face difficulties around successfully scaling pilot projects, taking something that has proven value in a particular workflow or cell and rolling that initiative out across the organisation.

It may be that project leaders are struggling to secure the larger budgets enterprise-wide transformations require, an issue not made easier by budget holders having to juggle a growing number of seemingly competing priorities.

In order to accelerate their adoption of digital technologies, manufacturers say they need the greatest support in three areas: determination of business case, identifying a benefits-backed roadmap and upskilling their workforce, all cited by three-quarters (75%) of respondents.

Click here to download your copy of the 2021 DIGITAL TRANSFORMATION ASSESSMENT


*This report is based on a survey of senior manufacturing professionals conducted in November and December 2020 by The Manufacturer and commissioned by IBM. A number of respondents were interviewed to add qualitative content to the quantitative research.