More and more manufacturers are integrating digital technologies into their operations. For some, it’s in response to workforce shortages, for others it’s a desire to be more efficient, and for many, it’s about being more competitive.

Recently, IndustryWeek and Dassault Systemes released key findings from their 2021 digital transformation report for the small-to-medium business (SMB) market. Most respondents were in the early to mid-stage of the digital transformation process. The insights showed the dramatic impact that technologies are having on manufacturing efficiencies, supply chain transparency, productivity and profitability.

Factors Preventing Adoption

Two big factors cited as preventing greater adoption of technology and automation among manufacturers were adequate funding and a lack of understanding about the benefits and the implementation process. Additional guidance and education with these factors could assist companies in their digital journey.

The most common type of technology currently being used by about half of the SMB respondents is digital document management which is basically electronic filing cabinets your organization can use as a foundation for organizing all digital and paper documents. And about one-third of the companies report using cloud computing, robotics, and automation.

Roughly 40% of the respondents cited Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) as essential applications for their businesses, with over half still relying on spreadsheets. About half of the SMB’s have retooled a small technology portion of their operations or product offerings to meet changing customer demands.

Technology Transformation Business Drivers

What are the SMB drivers behind the decisions of this technology transformation? The top three drivers cited in the report are (1) growth and profitability; (2) changing customer demands; and (3) competitive pressure.

As customer requirements change, manufacturers indicate they must also deal with a variety of competitive challenges. These include:

• Controlling costs and maintaining competitive pricing
• Scaling to meet customer demands
• Adapting to evolving market conditions with manufacturing flexibility and agility

Despite the challenges and barriers facing small and medium-sized manufacturers, increasingly adopting technology and automation for their businesses is virtually a mandatory requirement in order to meet customer demands and competitive pressure.

Impact of Digital Technology Implementation

Among the report respondents, manufacturers who have initiated the introduction of digital technologies in their transformation efforts are seeing positive impacts on their business metrics. Key metrics which have somewhat to greatly improved include:

• production efficiency
• manufacturing cycle times
• quality, defects & rework
• on-time delivery

Manufacturers who have turned to digital transformation technologies are poised to receive numerous benefits by becoming Industry 4.0 ready. The outcome of such implementations results in an increase in output and better utilization of assets, including the labor force.

The skilled workforce shortage is not going to improve anytime soon and combined with the efficiencies realized from digitally transforming some or all of their operations with new technologies, SMB’s will be better positioned to grow their business, remain profitable, meet customer needs, and sustain their competitiveness.

CONNSTEP offers the Smart Industry Readiness Index (SIRI) assessment for manufacturers. SIRI is designed to help manufacturers understand Industry 4.0 and its tangible business benefits, determine the status and readiness of technology implementation within their organization, and provide a roadmap for targeted and incremental improvement.

For help with scalable digital solutions for your business or to discuss a SIRI assessment, contact the digital transformation experts at CONNSTEP.