Manufacturers of all kinds have significant progress still to make as they move toward a digitally enabled future.
Outliers such as California-based electric car-maker Tesla, which uses in-vehicle data analytics, advanced automation and robotics, and even a custom enterprise resource planning (ERP) system, remain by far the exception, not the norm.
For most other manufacturers, this research highlights clear gaps across all six core digital categories (see below), with no one sector scoring 60 or higher out of 100.
In particular, areas such as connectivity (embedded sensors to connect equipment and output) and adaptability (digital design and modeling, and the ability to customize production) need further improvement.
The Six Dimensions of Digital
Our research evaluates manufacturers’ digital capabilities across the following core dimensions, using their relative progress in each to provide an overall score out of 100.
Our research shows that manufacturers fall into two camps of adoption: the ‘Efficiency Experts’ and the ‘Revenue Re-inventors’.
Both groups are deploying digital technologies to improve productivity and efficiency, but the latter is leading the way in exploring how digital can be progressed even further – to transform their business model and unlock new markets.
Firms in the Revenue Re-inventors group are more likely than Efficiency Experts to say that their financial performance is ahead of their peers.
In particular, Revenue Re-inventors are more likely to create new revenue streams from the provision of digital services – as Rolls-Royce has done through its Engine Health Management service, which uses onboard sensors and live satellite feeds to track the health of thousands of engines operating worldwide.
One key reason for manufacturing’s relatively slow progress on digital is fears over cyber-risks.
This is especially true now, following various high-profile breaches, and some industry experts point to manufacturers as prime targets for hackers.
“Security is another breakpoint keeping manufacturers from moving faster with digitalization,” explains one industry expert.
As a result, leadership on digital issues among the companies polled for this research is often strongest from a risk perspective – as opposed to being more focused on the upside opportunities.
Data remains a blind spot for many manufacturers.
While a plethora of companies in other industries have exploited data to create significant new revenue sources, there is little evidence that industrial firms have got to grips with their data.
As one executive puts it in this report, “Data is the gold of the 21st century”– yet few manufacturers have learnt the art of prospecting for this precious resource.