Almost a third (31%) of companies in the manufacturing industry lag behind in digitalisation and innovation according to their employees. Especially a lack of digital knowledge is to blame.
This is according to research by Axians among 575 employees and managers in the manufacturing industry. Three quarters of the organisations are actively engaged in digitalisation. Nevertheless, a third of the respondents indicated that it is difficult for their organisation to translate digital developments to their own business.
Lack of digital knowledge
Managers' lack of digital knowledge is one of the main reasons for this, the survey shows. For instance, 36% of respondents indicated that managers and executives within their organisation lack knowledge of digitalisation and digital developments.
"Despite the fact that digitalisation is on the radar of many companies in the manufacturing industry, it seems that a large proportion of these organisations find it extremely difficult to successfully digitalise," says Guido van Dinther, Business Unit Manager at Axians Netherlands. "This while applying and integrating the latest technological developments such as IoT and security are actually essential for a successful future."
Insufficient visibility of impact
The impact of digital developments on the organisation is also often insufficiently known. For example, a fifth of respondents say their organisation has insufficient insight into the financial impact of digitalisation. 23% state that too little account is taken of any impact of digitalisation on their own staff.
"The manufacturing industry is also experiencing a digitalisation boom. To successfully digitise, it is important to make an informed assessment of all pros and cons. However, we see that many organisations in the manufacturing industry underestimate the impact and commitment of digitalisation and are therefore falling seriously behind the competition," Van Dinther explains.
Future at stake
Almost half of respondents (42%) want their organisation to digitise further. Thus, 19% fear that failure to digitise will harm their organisation's future. 18% find it difficult to compete with digitised competitors.
Van Dinther: "We find that the future success of an organisation in the manufacturing industry is increasingly intertwined with the level of digitalisation. Especially the rise of Internet of Things brings great opportunities for these companies; by making devices and machines 'smart', maintenance, for example, can be better predicted and downtime avoided."
Despite a significant proportion worrying about the future of their organisation, few respondents are concerned about their own jobs. For instance, only 9% fear that their jobs will disappear because of digitalisation and automation.
Digital Twins
Axians is not the first organisation to highlight the lack of digital expertise amongst managers in the manufacturing sector. According to ABN AMRO Insights, the sector is on the cusp of a major development: Digital Twinning. This is a collective term for applications in which physical objects are linked to digital models.
Getting started with Digital Twins, however, requires a change in mentality among many entrepreneurs in the manufacturing industry. "Many director-major shareholders of the baby boom generation have limited knowledge of software and therefore do not want to get involved yet. Digital Twinning also presents a risk, because its application is complex and requires investments in knowledge and software," writes ABN AMRO Insights.
At the same time, the organisation calls Digital Twinning "necessary to remain competitive in the long run". For many entrepreneurs, embracing development is even becoming a necessity. For instance, ABN AMRO Insights expects that many large clients will expect their suppliers to adopt Digital Twinning.
The Axians research report can be requested here.
Author: Wouter Hoeffnagel
