While the term “digital transformation” —commonly shortened to DX—is becoming ubiquitous in the business world, what may not be entirely clear is just what DX means. While the term is widely used to a point where some deem it unhelpful, the business mandates behind it remain. These include rethinking old operating models, experimenting more, and refining agility in responding to both customers and rivals.
At its core, DX refers to the integration of digital technology into all areas of a business, which then results in fundamental changes to the ways businesses operate and deliver value.
Manufacturers are under relentless competitive pressure to deliver better goods at lower costs while also streamlining processes in their supply chains and factories. At the same time, customers are asking for more unique features in the products they buy. Customization versus standard products are often difficult trade-offs with implications in design processes, production costs, and schedules.
Digital transformation for manufacturers can make great differences in all these areas. But for many small to medium-sized manufacturers struggling to navigate economic and market shifts, DX seems risky and the value unproven. The technology might seem out of reach or even unnecessary.
The Technology of Digitization, Digitalization, and Digital Transformation
Digitization, digitalization, and digital transformation are a confusing mix of buzzwords that seem to suggest something new but instead, describe what manufacturers have been doing for years: using technology to plan, procure, produce, and distribute products.
- Digitization is the act of converting analog information into zeroes and ones that can be stored, processed, and shared by computers.
- Digitalization refers to “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities.”
- Finally, digital transformation(DX) involves the strategic application of digitalization to not only improve a business’ entire system of production, procurement, sales, operations, human resources, and financial management, but also completely transform the way a manufacturer produces revenue and delivers value to customers.
To begin to understand strategic digital transformation, manufacturers need to look no further than current and available technologies:
- AI and ML Improve Supply Chain Efficiencies: Artificial Intelligence (AI) and machine learning improve supply chain efficiencies by offering predictions on supplier reliability and cost variability. AI models are also used to improve process quality through real-time anomaly detection.
- Bots Enhance the CX: Another example is the use of bots to more easily (and more cheaply) accommodate customer demands into quoting, design, and customer service processes. Customer service AI-enabled bots can work on product configuration, order taking, and query handling, allowing companies to easily scale up without adding overhead.
- IoT Advances Connectivity: Or a manufacturer can use an Internet of Things (IoT) platform to create opportunity by installing network-connected sensors in their products so that operational performance data (and anomalies) can be stored in the cloud. This data can unlock tremendous value to both the manufacturer in terms of anomaly detection, preventative maintenance, quality, and their customers who can understand how these assets are utilized.
Remake, Redefine, and Broaden Business Operations With DX
In connecting these technologies, ERP systems for manufacturing—such as SYSPRO—now offer manufacturers the opportunity to integrate all of their chosen digital transformation technologies (AI, IoT, etc.) to remake, redefine, and broaden their business operations. With integrated digital transformation, businesses can become more profitable and productive with the resources they already have at hand.
The key to successful digital transformation for manufacturing is aligning these kinds of initiatives to the overall business strategy. In developing a digital transformation strategy, manufacturers find cost-saving value in their operations, generate new revenue streams from customers, and even look ahead to monetizing new data being collected through digitalizing products and operations. All of these transformations ultimately function to enable positive change for long-term business success.
Integrate Digital Transformation With PVI
Not sure where to start with DX? Start with PVI. PositiveVision Inc. is a full-service consulting firm dedicated to getting small and mid-sized businesses the software technologies they need for profitability and longevity. By leveraging strategic partnerships with ERP manufacturing software providers such as SYSPRO, PositiveVision ensures that every customer has access to the most relevant resources and expertise.
Find out how PositiveVision can help you streamline inefficient processes, grow revenue streams, and reduce costs through DX and ERP manufacturing software. Contact us today.