How Manufacturers are Preparing for the Future Through Digital Transformation

In a recent report commissioned by Microsoft, Building A More Resilient Future For Manufacturers Through Digital Transformation, Forrester Consulting surveyed over 600 manufacturing supply chain, distribution, and operations decision-makers from companies across North America, EMEA, and Asia Pacific (APAC). In this blog, we highlight the major findings of the report.

The report found that the more proactive business leaders are not simply content to respond to the challenges of today but also are preparing to be more resilient in order to manage disruptions to their business in the future. These businesses are implementing digital transformation emphasizing greater visibility over their supply chain, better data analysis for improved decision-making, improving the end-to-end customer journey, and addressing potential distribution issues. These data-driven initiatives will ultimately lead to improvements in operations, systems, and process. And roughly one third of these manufacturers expect to reduce their environmental impact as they transform.

Topping the list, nearly one third of the survey respondents expressed challenges with visibility over their inventory, material, work-in-progress, and finished goods inventory. And another third noted trouble effectively analyzing available data for better business decisions. The respondents identified their major objectives for digital transformation include implementing technology to address internal productivity, aggregate and mine data more effectively, and improve all phases of the customer journey, from presale through post sale and support.

Addressing the customer journey, a significant number of respondents cite the problem of too much data and the inability to analyze it effectively. Data collection through edge devices and effective use of artificial intelligence to drive decision-making is also a priority. Manufacturers are changing the way they engage with customers, particularly with a move toward more subscription and consumption models. And almost half are adjusting their distribution channels to meet the changing needs of their customers.

In the end, the report suggests that the successful manufacturers in the future will learn to:

• Leverage data. By managing their data through artificial intelligence and machine learning, they can anticipate their supply chain effectively. In this way, they will be able place the inventory into their supply chain ahead of demand.
• Move away from focusing solely on cost for sourcing. They should not only source from the lowest cost suppliers, but also ensure their suppliers can respond quickly to supply shortages or peak demands.
• Understand the environmental impact of the business. Consumers are demanding that businesses be more transparent about their environmental, social, and governance (ESG) impact and are willing to put dollars behind their choices.
• Segment the customers. Various customer segments require a differentiated customer experience, with targeted delivery models and channels.