Despite over a decade of recognising digital technologies’ importance, manufacturers struggle with effective implementation, scaling, and aligning organisational goals amid skills gaps and legacy system challenges, prompting a call for strategic, collaborative approaches to future-proof operations.
Industrial digital transformation remains a paramount priority for manufacturing businesses striving to build resilience and future-proof their operations. Despite more than a decade of recognising the significance of digital technologies, many manufacturers continue to grapple with challenges surrounding effective implementation, measurable success, and sustainable scaling, as detailed by François Disch, Digital Transformation Delivery Lead at Schneider Electric.
A key challenge in industrial digital transformation lies in the difficulty of defining clear objectives and aligning them across all levels of the organisation—from C-suite executives to plant operators. This alignment is crucial because true transformation is measured by tangible impacts on top-level business KPIs such as revenue enhancement, operational expenditure reduction, and progress toward Environmental, Social, and Governance (ESG) targets. While belief in digital transformation’s benefits has grown—evidenced by a study from Omdia revealing that 94% of manufacturers anticipate a significant impact on operations within two to three years—widespread adoption remains elusive. European Industry reports indicate that 41% of companies have yet to adopt advanced digital technologies, with half still confined to pilot projects rather than enterprise-scale rollouts.
Several barriers deepen this impasse. A pronounced skills gap in data analytics, cybersecurity, augmented and virtual reality, and IT/OT infrastructure planning limits many manufacturers’ ability to develop and execute digital projects internally. Often, critical expertise exists at a corporate level but is lacking locally at manufacturing sites, necessitating external support. Furthermore, a misalignment between IT leadership—which tends to dominate the digital agenda—and operations teams who interact daily with manufacturing realities often results in digital solutions that fail to deliver practical value. The persistent temptation to maintain “business-as-usual” practices also hampers commitment to transformation, risking long-term competitive disadvantage.
Even when pilot projects succeed, many companies struggle with what is known as ‘pilot purgatory’: innovations fail to scale or replicate because of inconsistent corporate direction or non-standardised approaches. Research shows roughly 40% of manufacturers feel their headquarters provide insufficient guidance or clarity on digital transformation objectives, limiting enterprise-wide benefits.
To overcome these barriers, Disch advocates for focusing on the ‘art of the possible’—communicating a transformative vision that transcends incremental performance improvements to encompass enhanced uptime, operational flexibility, operator empowerment, and continuous safety and quality improvements. This approach fosters a mindset of value creation rather than mere cost reduction. A successful transformation requires collaborative input from all organisational layers, with leadership setting a strategic vision and facilitating local teams to implement scalable use cases based on robust financial returns and operational realities.
Disch proposes a four-point action plan as a foundation for effective digital transformation. First, aligning business goals with on-the-ground facility needs ensures shared objectives and smooth pilot-to-scale project progression. Second, assembling a dedicated, skilled team capable of scaling projects, either internally or supplemented with external partners, is imperative. Third, balancing a standardised digital core model for streamlined operations with the flexibility to adapt locally allows for operational agility while preserving enterprise coherence. Finally, establishing governance structures safeguards ongoing momentum and alignment, preventing transformation efforts from stalling or losing focus.
Complementing these insights, industry experts echo the complexity of transforming manufacturing operations digitally. Additional literature highlights consistent challenges including high investment and return-on-investment concerns, integration difficulties with legacy systems, and cybersecurity threats which can jeopardise sensitive operational data. Workforce resistance to change, combined with skill shortages in digital competencies, further complicates adoption. These factors necessitate a carefully planned roadmap with change management, strategic training, and robust security frameworks to minimise disruption and enhance acceptance.
Moreover, manufacturing firms are encouraged to employ incremental modernisation strategies, introducing IoT and Industry 4.0 technologies progressively while maintaining regulatory compliance. Engagement and communication across departments, especially involving employees early in change initiatives, are critical to bridge the gap between IT and business strategies effectively.
In conclusion, industrial digital transformation is less a one-off project and more a continuous improvement journey shaped by evolving technologies and shifting market demands. Strategic leadership, a clear vision shared across the enterprise, dedicated skilled teams, and robust governance are essential pillars. Failure to invest and adapt now carries the dual risk of falling behind technologically and missing urgent decarbonisation goals, which are increasingly central to manufacturing’s future viability. Partnering with specialised technology providers can provide valuable guidance and support in crafting and executing these long-term transformation strategies.
Source: Noah Wire Services
Subscribe to Industry Updates
