By Ankit Gupta, Managing Director, Protiviti Member Firm for India
In the contemporary landscape, organisations are currently undergoing a dynamic shift towards digital transformation, particularly within the realms of manufacturing and distribution. Recent statistics reveal that nearly 70% of manufacturers and industrial entities are actively planning, executing, and implementing digital transformation initiatives in various capacities within their operations. This statistic underscores the profound impact and undeniable significance of AI and digital transformation within the spheres of manufacturing and distribution.
According to reports from “Market Research.Com,” the anticipated growth rate of Industry 4.0 in India is projected to reach INR 774.90 billion by FY 2027, expanding at a rate of 13.32% during FY 2023 – FY 2027. The integration of IoT in the manufacturing market has played a pivotal role in fostering the adoption of smart manufacturing practices in India. Essentially, digital transformation serves as a catalyst for revolutionising the manufacturing industry and distribution processes, providing a roadmap for long-term success.
Digital Transformation: The Need of the Hour!
In an era defined by relentless competition and soaring customer expectations, Digital transformation is no longer confined to a buzzword but has rather converted into a business imperative. In simple words, Digital Transformation in manufacturing signifies the progression from analogue operations towards the integration of digital transformation and processes. Embracing Digital Transformation allows organisations to keep pace with the evolving environment and industry trends.
In today’s world, Digital Transformation holds the key to unlocking efficiency, seamless growth, and Increased competitiveness between organisations. It provides a platform for companies to streamline operations, respond swiftly to market shifts, and deliver best-in-class services to customers. In essence, it’s the cornerstone for strategic sustainable growth and development by opening new avenues for revenue growth and business models ultimately expanding financial opportunities; it empowers businesses to stay competitive, agile, and customer-centric while ensuring security and excellence.
Pillars of Digital Transformation:
1. IoT and Sensor Technologies: The Internet of Things along with sensor technologies has emerged as a game changer for manufacturing and distribution. Apart from providing valuable insights, IoT facilitates real-time monitoring of equipment, products and supply chains which furnishes data for informed decision-making.
2. Data Analytics and AI: Data Analytics and AI are changing business today, by eliminating errors and offering a greater level of accuracy compared to traditional business tools. Manufacturers and distributors today can optimise processes, offer customers personalised solutions, and predict demand by transforming the raw data into valuable insights ultimately increasing the potential growth.
3. Automation and Robotics: Robotics and Automation are the driving forces for any organisation providing efficiency, speed and precision while minimising human error and maximising output. From automated assembly lines to robotic warehouse management, technologies like these are cost-cutting, automating repetitive work and boosting productivity without the need for additional resources.
4. Cloud Computing and Edge Computing: Cloud and Edge Computing have led the way for seamless data access along with the processing of large amounts of unstructured data while allowing real-time interaction with users. They enable remote monitoring and control, rendering operations more flexible and responsive.
5. Overcoming Challenges: Businesses today have left no stone unturned for increasing their efficiency, to maximise profit. Organisations unable to act responsively or unable to accept are failing miserably since sticking to the traditional regime is no longer serving the business needs. Alongside the benefits of Digital Transformation, various challenges need to be tackled, some of which might present themselves as concerns in cybersecurity accompanied by the imperative need to upskill the workforce. To navigate through these challenges there’s an overbearing need to invest in cybersecurity measures, prioritise data protection and provide constant development opportunities for employees. Some challenges and their mitigation are mentioned below:
o Cyber Security Concerns: As the operations are becoming more integrated, cyber threats and attacks have escalated. To protect sensitive data and ensure the integrity of digital systems organisations must invest in robust cybersecurity measures along with establishing comprehensive security protocols to fortify their digital infrastructure, alongside conducting regular security checks and vulnerability assessments to identify and mitigate possible threats.
o Workforce Upskilling: With the transition into the digital-centric environment there’s a constant requirement for a skilled workforce. Training programs, workshops, internships, and access to specialised courses have become the essential components of making employees equipped enough to leverage the new digital landscape. Identifying the specific digital needs and developing the programs catering to those needs should be initiated on a high-priority basis.
o Technological Integration: It is very important to ensure seamless communication and compatibility between different digital tools, at times the complexities of integrating new technologies with existing ones become a problem. Adequate knowledge about the software provides a clear perspective while choosing the right solution for your organisation.
o Resistance to Change: At times there is constant resistance from employees who are accustomed to traditional processes. The fear of Job displacement due to automation has been a recurring issue within the people of the organisation. Encouraging continuous learning and providing a platform to practice and apply newly acquired digital skills reduces the reluctance towards digital transformation.
o Change Management: Effectively communicating the goals and benefits of digital transformation to all stakeholders is very necessary, accompanied by adequate support and resources for the employees to adapt to new processes and technologies. Foster a culture of openness and transparent leadership, involving employees in the process by their inputs as feedback.