Image: McKinsey

Few companies have realized the full potential of digitization of manufacturing at a large scale, a survey by the McKinsey & Company management consultancy has found.

Its fourth annual Digital Manufacturing Global Expert study claims that while 92% of the respondents from firms around the world felt that their company was at the forefront of digitization or on a par with their rivals, many of these firms are still in “pilot purgatory”: a situation in which they have significant digitization activity underway, but are yet to see meaningful financial or operational benefits. There has been progress in China and India, it says, but regression in Japan.

McKinsey’s subsequent report, titled ‘Digital manufacturing – escaping pilot purgatory’, adds that “most manufacturers are struggling to take the digital-manufacturing successes they have experienced in limited pilots to a scale that would bring the full benefit of the technology.”

The report notes important activity in three key areas: connectivity, for information flow such as the application of AR in operating procedures and digital performance management; intelligence, applying advanced data analytics and AI to generate insights, such as in predictive maintenance and quality management; and flexible automation, using new robotic techniques and products such as autonomous guided vehicles and assembly ‘cobots’.

Getting out of purgatory

It goes on to identify six ‘success factors’ to achieve at-scale impact of digitization in the realms of process, infrastructure, and organization. For process, these are to approach an opportunity from the point of view of value, rather than ‘technology forward’; and to establish a clear vision of how digitization will create competitive advantage, with a phased road map and business case.

For infrastructure, companies need to form an early view of a scalable target technology stack that supports the road map; and then build and lead a focused ecosystem of partners to manage its build. Finally, on an organizational level, the transformation must be driven top-down and the implementation coordinated widely, not treated as an isolated IT project; and firms must build the necessary skills and culture to sustain it.

The report concludes that: “A holistic approach to digital manufacturing — one that considers the fundamentals of the organization and the business as much as it focuses on the technology-related factors — can help manufacturers get over the hurdles that stand between pilot success and company-wide rollout.”

-Farah Alkhalisi