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The changing digital landscape of Manufacturing

The digital revolution is hard to ignore, but how has its trajectory changed over the last year? Barclays’ Lee Collinson, Head of Manufacturing, Transport and Logistics, discusses the accelerated adoption of digital technologies through the pandemic.

Reacting to the crisis

To say that this year has been a strain for manufacturers is somewhat of an understatement. When the UK went into lockdown in March 2020, manufacturers, along with most industries across the country, had to adapt quickly to keep production lines moving and get essential goods to where they needed to be.

The crisis caused shocks to the market, which would usually result in stagnation in investments in new equipment, as seen after the 2008 financial crisis. Instead, manufacturers have actually accelerated their investments in digital technologies to keep their business moving.

According to a study by Deloitte and MAPI^1, despite the pandemic-related market shocks, 62% of global manufacturing leaders say they are investing, and even beefing up that spending, in digital factory plans. A separate MAPI survey^2 said that 85% of leaders agreed or strongly agreed that digital factory investments would rise by June 2021.

“The companies that are able to make the right kind of strategic investment at the time when their competitors might be retrenching, are the ones able to come out on top” says Paul Wellener, vice chairman of Deloitte and leader of their US industrial products and construction practice.

Even though they were going through market shocks back in the spring, a lot of organizations are committed to smart factories and investing at increasing rates.

Virtual conferencing and driving sustainability

The rapid acceleration and adoption of new technologies took on a whole new level of importance during the pandemic, and digital technology has played a crucial role in this transformation. Companies who maybe had once shielded away from the use of digital tools in their businesses were left with no choice – innovate their processes or dissipate.

Platforms such as Zoom, Webex or Microsoft Teams became vital for the everyday running of companies, to keep colleagues in touch, to keep order books churning and, most importantly, to keep businesses around the world connected. Microsoft Teams alone went from 44 million users to 75 million in the space of one month and is now a staple of working life.

Rina Ladva, Head of UK Manufacturing at Microsoft explained in an interview with The Manufacturer^: “We are having a lot more conversations with customers about their transformation and what they’re trying to achieve. One of the areas the pandemic has strengthened is the focus on sustainability and the right strategies for manufacturing. How do they really drive real efficiency and cost saving whilst also meeting their sustainability goals that they have?”

Looking to the future

Tom Leeson, Senior Industry Strategist at OpenText, spoke with The Manufacturer^ earlier this year, detailing his first hand experiences of investments into new technologies. He said “We were very quick to pivot on the situation; it was a really good learning curve. The safety of employees was imperative so first you make your employees safe and then you start to see some of the gaps that are actually in your business.”

He continued, “When we were not connected to the business, physically, that’s when the acceleration happened. We were already seeing an advance towards the cloud from our customers, but going forward it will be increasingly cloud based as manufacturers move from on-premise applications to putting information in the cloud which will be secure.”

There seems to be a lot of evidence to say these investments and transformations are happening on a rapid basis. Not only that, but it’s clear that the manufacturing landscape has permanently changed, and companies will need to keep up in order to remain competitive.

References

1Accelerating smart manufacturing: the value of an ecosystem approach https://www2.deloitte.com/us/en/insights/industry/manufacturing/accelerating-smart-manufacturing.html^
2Ten Trends Shaping U.S. Manufacturing in the Next Twelve Months https://www.mapi.net/forecasts-data/ten-trends-shaping-us-manufacturing-next-twelve-months

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