A recent global study by PwC highlights that investments in digital transformation are on the rise within manufacturing companies, but that is not necessarily reflected in their implementation.
Named Digital Factory Transformation Survey 2022, the study was conducted in the second half of 2021 and managed to get responses from more than 700 global corporations from at least 23 different countries. The study results show the focus and status of the digital transformation of manufacturing industries, their technology priorities, and their use cases.
This data can shed light on companies that have not yet begun their digital journey, those that are just starting out, or those that have already made progress and need to know the advantages that their investment will bring.
Here are the highlights of this study.
Faced with Covid-19-related challenges, manufacturing industries have had to rethink their operating model. The results, while encouraging, leave work ahead. Industrial companies are investing $1.1 trillion a year in digital transformation solutions, but two-thirds of them are still in the first stages of their digital journey.
However, the most effective ones are those that are seeing double-digit ROI. They achieve this by implementing a full suite of digital technologies at a factory level that drives manufacturing flexibility and efficiency and reduces operational costs through automation.
64% of companies are at the beginning of their digital transformations and only 10% have completed their program or are in the final phase. Although this is low, it is remarkable that digitization is still high on the list of priorities for manufacturing companies.
Along with the well-known cost and efficiency, new key drivers for digital transformation have appeared: resilience, transparency, and sustainability. The latter will continue to gain importance in the coming years as the study results show that digitalization has been identified as the ideal tool to address sustainability challenges.
The $1.1 trillion that manufacturing companies are investing in the digital transformation of their factories seems to be not enough. At least 3% of revenue need to be invested for high and rapid returns to digital investment. This is 50% more than what companies currently invest.
The digital transformation backbone for each company is different. It is revealed that each company can use different use cases depending on its particularities, so there is no specific formula.
Although each path is different for each company, for most managers it is necessary to know when and how much the ROI will be. There are certain use cases or technologies that help to have a faster payback in a record time (less than a year for some companies).These are quality analytics, drones, and 5G applications.
The most effective digital transformations occur within organizations that have agile operating models. If companies prioritize flexibility in local implementation based on user needs and preferences in different factories, a perfect balance can be achieved that will result in a fully integrated digital organization.
If you are at an early stage, advanced stage, or even if you haven't started your digital journey yet, don't worry. At AG Solution Group we help you complete your factory's digital transformation no matter what stage you are in.
For 20 years we have been helping our clients to successfully plan, execute and complete their digital journey, prioritizing their needs and those of their production.
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