In 2017, the terms “IoT” and “digital” seemed to be the most trending topics within the manufacturing sector. Although most manufacturers are talking about IoT and digital, far fewer have implemented a comprehensive digital strategy. Those manufacturers without a digital strategy could be hindering their business strategy in 2018 and beyond.
While we understand that moving toward a digital transformation is overwhelming, the reality is that digital is the future for manufacturers both big and small.
In 2018, manufacturers need to start or continue their digital journey and set specific goals to help move their strategy forward. Digital transformation can be seen as two separate steps: (1) internal digital transformation looks at how companies can change or shift their internal processes to increase efficiency and produce higher quality products; and (2) external digital transformation asks how a company can embed IoT-enabled technology in their products to potentially add more features or functionality and provide new services for their customers.
For those companies that have only started to dabble in thinking about their digital strategy, the time is now to put it in action. Get away from an “if it’s not broken right now, why fix it” mentality or more forward-thinking businesses will compete for your customers. A good way to start to develop and implement the right digital strategy is to talk to your customers to gain their insight into functionality they want to see. Those insights will be valuable in determining your goals and how a digital transformation can help facilitate those results.
Larger and more diversified companies in the manufacturing space have invested more resources and are further along in executing their digital strategy, but they should not become complacent. Instead, they need to continue to progress on their digital transformation journey and think about how to take it to the next level.
In the end, it’s important to realize that it’s not just a digital strategy, it’s your business strategy – a strategy that must be supported and championed from the top of the organization. A supported tone-at-the-top is a key component to the holistic digital transformation. Companies need to start training their current employees and looking for new talent with the capabilities and expertise to execute their digital strategy.
Another key item for manufacturers in 2018 will be assessing the impact of the new tax laws on their business strategy. Although a decrease in the corporate tax rate should free up money to invest in their digital transformation, manufacturers should also understand how the new laws will impact their business strategy. Any time there is a significant change in rules that affect a company’s business, executives should reassess their strategy in light of these new rules. The companies who quickly adjust their strategies will win big.
Change doesn’t happen overnight – it’s a process. We’ll be providing timely updates on how progress is coming along in the domestic manufacturing industry in the year ahead.