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ML Journal

Welcome New Members of the MLC June 2024

Introducing the latest new members to the Manufacturing Leadership Council


Mike Coubrough

Vice President, Operations
TE Connectivity


www.te.com/en/home.html

https://www.linkedin.com/in/mikecoubrough/

 


Jim Derry

CEO
Field Fastener


https://www.fieldfastener.com/

https://www.linkedin.com/in/jimderry/

 


Jim Tobojka

Senior Vice President, Operations
TE Connectivity


https://www.te.com/en/home.html

https://www.linkedin.com/in/jim-tobojka-ba38332/

 


Michal Wierzchowski

Vice President, Operations
Jabil


https://www.jabil.com/

https://www.linkedin.com/in/michal-wierzchowski-7203324/

 

 

ML Journal

M4.0 Technology as a Catalyst for Enduring Change

Emerging technologies are creating new opportunities for manufacturers – including a greater role for women in operations.

 

TAKEAWAYS:
It is now essential to balance cost and process optimization with improvements in safety, resilience, and quality.
Women are increasingly becoming a vital part of the manufacturing workforce, and their unique perspectives are essential in guiding digital transformation strategies.
The focus on safety, resilience, and quality in digitalization efforts aligns with creating a more inclusive and appealing work environment.   

 

 

In manufacturing, emerging tech is fast becoming mainstream. From digital twins and data analytics to cloud computing and generative AI, more and more companies are using digital solutions to transform their operations, supply chain and customer experiences. Emerging tech has moved from the edge to the mainstream, and it’s reshaping the industry’s future.

It’s affecting everyone too. Domestic or international, established or startup – manufacturers of all shapes, sizes and locations are seeing their business model upended by this rapid shift in the digital landscape. Yet, broad discrepancies remain in exactly where firms are on that journey.

For example, while many manufacturing companies continue to wrestle with shopfloor connectivity and data gathering, others are well down the road of leveraging insights and AI to automate and improve decision-making. For some, the cloud and Internet of Things have been the limit of their digital ambitions so far; yet, elsewhere, robotics and nanotechnology are already taking hold.

In certain cases, there are even disparities in the technological sophistication of different plants within the same organization.

A Dualistic Approach

What’s crucial, therefore, is that leaders take time to clearly and honestly understand how far along the digital transformation path they are. Why? Because this will enable them to identify issues, pinpoint what and where to improve, and figure out how to keep pace with technology’s fast expanding capabilities.

For Hiral Rao, who leads the EY Digital Manufacturing and Mobility Cloud platform, the best way to do so is with a “dualistic approach.”

First and foremost, this means focusing on short-term challenges, such as boosting the connectivity of data models to create a single, reliable source of truth across the organization and building less siloed relationships with technology providers.

Understanding their place on the digital journey will enable leaders to identify issues, pinpoint where to improve, and keep pace with technology’s fast expanding capabilities.

But, at the same time, it means having one eye on the future – what the long-term impact of Industry 4.0 on the organization will be. How will it change their risk management, for example? Where are they going with automation? How will technologies like AI and machine learning fit in? And what skills do they need to train and recruit their workforce?

As Rao says, “A dualistic strategy responds to the core operational challenges of today while also preparing manufacturers to answer the key strategic questions of tomorrow.”

Evolving to Lean 4.0

Equally important is firms’ willingness to evolve past the lean operating principles that have traditionally defined the industry. Efficiency and effectiveness will still be foundational to competitiveness, but this is no longer about achieving only highly repeatable processes, lowest cost and least time.

Instead, firms must balance cost and process optimization with the need to improve safety, resilience and quality. This requires investment in better data integration to feed developing technology and sharpen decision-making, as well as deep knowledge of the people and processes across different production facilities. Where these vary, leaders who are seeking to scale at an enterprise level must look beyond centrally controlled pilot programs and rollouts, favoring a more nuanced testing and implementation approach across individual plants.

This all intermingles with Rao’s dualistic approach too. By recognizing and understanding where they’re currently delivering on their digital journey, along with where they’re not, firms can move quicker to embed technologies that fill current performance and productivity gaps and deliver value in the future. Specifically, it means:

  1. Maximizing what they already have, ensuring that they have the right culture, processes and skills to fully harness their existing technologies.
  2. Experimenting and adapting to move forward, testing novel solutions firmwide and plant by plant to unlock efficiencies, boost resilience and improve customer experiences.
  3. Collaborating to scale, partnering with stakeholders across the organization itself and, where appropriate, within its broader ecosystem to scale solutions for enterprise impact.

A Woman’s World?

There is another notable intersection here too. While manufacturing remains male-dominated, there is quantifiable progress in attracting female workers to the industry. Right now, 30% of manufacturing jobs are currently filled by women. It’s important for this to be improved to keep pace with other industries. After all, 47% of the overall U.S. workforce is female.

Emerging tech can play a key role in doing so, attracting a new generation of women into manufacturing. Rather than project the physical, labor-intensive image of the past, firms can now offer female workers a vision of creativity, collaboration, and innovation, all rooted in a digitally enabled future, encompassing everything from the smarter use of data to the responsible deployment of AI.

Efficiency and effectiveness will still be foundational to competitiveness, but it’s no longer about achieving only highly repeatable processes, lowest cost and least time.

In other words, manufacturing stands on the brink of not one, but two, revolutions at the same time. As the industry’s digitalization accelerates, the profile of the workforce will rapidly recalibrate too. Fresh skills and perspectives will join advanced technologies in creating smarter factories; more actionable insights on products, quality and risks; more accurate forecasting; and more resilient supply chains.

Ultimately, these twin forces could mean that manufacturers find themselves better prepared to sense and respond to all dynamics of an ever-shifting market. After a decade of challenges, a new and exciting future is emerging.  M

About the author:

 

Lisa Caldwell is EY Americas Business Consulting Leader.

 

 

The views reflected in this article are the views of the author and do not necessarily represent the views of Ernst & Young LLP or other members of the global EY organization.

Plant Tour reviews

A Pioneer in Automation Becomes a Champion for Digital Transformation

Rockwell Automation’s history points to a pioneering drive to make machines smarter. From its 1903 founding as the Compression Rheostat Company, soon to be renamed the Allen-Bradley Company, the company started with an early prototype machine controller and is now a world leader in digital transformation – both for its own operations and in offering guidance for its customers. Today, Rockwell is a $9 billion company with nearly 29,000 employees serving customers in 100 countries.

In early April, a group of Manufacturing Leadership Council members toured Rockwell’s electronic assembly plant in Twinsburg, Ohio, just outside of Cleveland. The theme of the tour was “Build a Digital Transformation Culture with MES and IoT Technology.” The 250,000-square-foot Twinsburg plant is one of four main electronic assembly locations within Rockwell that provide printed circuit board assemblies that go into the company’s products, with Twinsburg’s eight surface mount technology lines placing three million components and forming 11 million solder joints to make 3,000 control panels each day.

Rockwell’s manufacturing operations is regarded by many as a role model for system integration and data analytics. The company monitors and integrates its engineering data, material management data, product error proofing and genealogy, machine data, quality data, waste data, and performance data. Data is delivered to where it is most relevant and impactful, from facility performance to team leaders down to the specific work order and line performance for operators.

The company utilizes its FactoryTalk production system, industrial automation software that was developed to streamline processes while improving precision and reducing errors. It creates an interactive platform that can integrate data visualization, data collection and analysis, process design, and system diagnostics. Rockwell offers a full suite of FactoryTalk products, including for analytics and data management, product and process design, human-machine interface, industrial communications, maintenance, performance monitoring, and more.

Additionally, Rockwell utilizes a closed loop operating system that combines scheduling and constraint management, and automatically enforces finite capacity based on, for example, the number of operators available at the plant on a given day. Company leaders say this system has helped to eliminate some of its functional siloes, as its development was collaborative and cross-functional, with many different teams giving input to create a tool that could benefit all. While FactoryTalk is already available for manufacturers to license at their own facilities, Rockwell has an eye toward commercializing its closed loop operating system as well.

The tour didn’t shy away from showing both Rockwell’s tried-and-true technologies in addition to its newer ones, including a robot for final testing and assembly that utilizes a digital twin and AR to train operators and maintenance technicians. The machine is being used to create robot standards that can be scaled elsewhere throughout its other manufacturing facilities. At the time of the tour, it had been on the factory floor for less than eight weeks.

When Rockwell’s operations leaders were asked the top reasons for starting their digital transformation journey, they mentioned a need to address a huge uptick in demand, high turnover in the workforce that has led to far less tribal knowledge among frontline operators, and a desire to improve constraint management – both identifying and resolving those constraints. Looking toward the future, the company wants to capitalize on the momentum it has established on its digital transformation journey, explore the opportunities presented by AI and generative AI, and operate on the basis of real-time data-driven decisions.

Rockwell’s leaders also pointed to culture as key to getting functions and teams to work together while moving forward on technology transformation. When it comes to dealing with the complexity created by working with multiple layers of software, they think of it the same way as they do when developing their own products – take things that are sophisticated and make them easy to use by designing them for an operational environment.

Never one to shy from innovation, Rockwell is looking to an exciting future of possibilities ranging from developing large language learning models for manufacturing to building industrial ecosystems to creating a comprehensive data loop that moves between customers, engineering, and manufacturing. It seems fitting for a company that has placed itself as a cutting-edge leader from the radio age to the space age to the data age.

Read a full interview with Rockwell CEO Blake Moret here.   

Press Releases

2024 Manufacturing Leadership Award Finalists Recognized for Achievements in Smart Factories, Sustainability, AI and More

June 5 gala will recognize companies and individuals that are leading digital manufacturing transformation

Washington, D.C. – The Manufacturing Leadership Council, the digital transformation division of the National Association of Manufacturers, today revealed the list of world-class manufacturing companies and individual leaders recognized as finalists for the 2024 Manufacturing Leadership Awards, the 20th season of the industry’s premier awards program for achievements in digital manufacturing.

“More than ever, manufacturers are finding that digital technology investment is good for business as they achieve new levels of performance in efficiency, productivity and innovation,” said MLC Founder, Vice President and Executive Director David R. Brousell. “The finalists that we are recognizing for this year’s awards have demonstrated not just the business benefit of Manufacturing 4.0 technology, but also a fresh and imaginative approach to applying it in a transformative way.”

The 2024 awards feature nine project categories to recognize company achievements in the areas of Artificial Intelligence and Machine Learning; Collaborative Ecosystems; Digital Network Connectivity; Digital Supply Chains; Engineering and Production Technology; Enterprise Integration and Technology; Operational Excellence; Sustainability and the Circular Economy; and Transformational Business Cultures. Additionally, individual leaders are recognized in the Digital Transformation Leadership and Next-Generation Leadership categories. Award nominations were judged by a distinguished group of manufacturing leaders from across the industry.

“Each year, we see entries from manufacturers of all sizes, from a wide mix of industries and from locations around the world all telling different versions of the same story: digital is transformational,” said MLC Senior Content Director Penelope Brown, who is head of the awards program. “The quality and sophistication of this year’s award entries were outstanding. Many projects demonstrate how M4.0 investments are positioned for significant business model improvements. Additionally, the individuals recognized in the Digital Transformation Leadership and Next-Generation Leadership categories are exemplary leaders now and for the future.”

Select award winners will present their projects at the MLC’s Rethink Summit, which will take place at the JW Marriott Marco Island Beach Resort in Florida June 2–5. Rethink, also now in its 20th year, is the industry’s leading event for exploring manufacturing’s digital era. Details are available here.

“This year’s program will examine the past, present and future of digital manufacturing, and we are proud that the MLC has had an important role in building a community of leaders and organizations that are leading the charge,” Brousell said. “Whether this is your first time at Rethink or your 15th, you will always come away with new connections, new aspirations and new ideas that you can implement right away.”

All finalists will be recognized onstage at the Manufacturing Leadership Awards Gala, following the Rethink Summit, on Wednesday, June 5, at 7:00 p.m. EDT. Also to be announced at the gala will be category winners for all project and individual categories, winners of the Manufacturing in 2030 Award, the Manufacturing Leader of the Year, the Small/Medium Enterprise Manufacturer of the Year and the Large Enterprise Manufacturer of the Year. See a complete list of finalists here.

Nominations for the 2025 Manufacturing Leadership Awards will open in September.

-MLC-  

Founded in 2008 and now a division of the National Association of Manufacturers, the Manufacturing Leadership Council’s mission is to help manufacturing companies transition to the digital model of manufacturing by focusing on the technological, organizational and leadership dimensions of change. With more than 2,500 senior-level members from many of the world’s leading manufacturing companies, the MLC focuses on the intersection of advanced digital technologies and the business, identifying growth and improvement opportunities in the operation, organization and leadership of manufacturing enterprises as they pursue their journeys to Manufacturing 4.0.

Workforce

MLC Announces Manufacturing Leadership Award Finalists

a group of people posing for a photo

The Manufacturing Leadership Council, the NAM’s digital transformation division, has announced the 2024 Manufacturing Leadership Awards finalists.

About the awards: Now in their 20th season, the Manufacturing Leadership Awards honor the most outstanding manufacturing companies and their leaders for groundbreaking use of advanced manufacturing technology.

  • This year’s program features nine project categories, including Artificial Intelligence and Machine Learning, Digital Supply Chains and Sustainability and the Circular Economy.
  • It also includes two categories for individuals: Digital Transformation Leadership for executive-level manufacturing leaders and Next-Generation Leadership for up-and-coming leaders age 30 and under.

How we decide: Nominations are judged by an outside panel of digital manufacturing experts with deep industry knowledge and experience.

  • For project entries, judges assess an initiative’s effect on improving manufacturing processes, furthering business goals and advancing company strategy, as well as how much digital technology the project used.
  • For individual nominations, judges look at each person’s impact both inside and outside their organization, and whether they meet the criteria as a role model for other manufacturing leaders.

Celebration and ceremony: Winners for both of these categories will be announced at the Manufacturing Leadership Awards Gala on June 5 at the JW Marriott Marco Island Beach Resort.

  • Award finalists will also be recognized, as will winners of the Manufacturing in 2030 Award, the Manufacturing Leader of the Year, the Small/Medium Enterprise Manufacturer of the Year and the Large Enterprise Manufacturer of the Year.
  • The gala caps off Rethink, the industry’s leading event for accelerating digital transformation. (Rethink also takes place in Marco Island, June 2–5.) 

The last word: “More than ever, manufacturers are finding that digital technology investment is good for business as they achieve new levels of performance in efficiency, productivity and innovation,” said MLC Founder, Vice President and Executive Director David R. Brousell.

  • “The finalists we are recognizing for this year’s awards have demonstrated not just the business benefit of Manufacturing 4.0 technology, but also a fresh and imaginative approach to applying it in a transformative way.”
ML Journal

Welcome New Members of the MLC April 2024

Introducing the latest new members to the Manufacturing Leadership Council


Philippe Adam

CMO
aPriori


www.apriori.com

https://www.linkedin.com/in/philippeadam1/

 


Kevin Carpenter

Chief Supply Chain Officer
Toro


www.toro.com

https://www.linkedin.com/in/kncarpenter/

 


Rob Harlow

Senior Manager, NA Production Engineering & Automation R&D
DENSO


https://www.denso.com/us-ca/en/

https://www.linkedin.com/in/rob-harlow-b1b55887/

 


Brad Larson

Director of Manufacturing
Fey Industries, Inc.


https://www.feyindustries.com/

https://www.linkedin.com/in/brad-larson-3b4b63145/

 


Pete Millett

Director – Global Engineering and Manufacturing Director
Lubrizol


www.lubrizol.com

https://www.linkedin.com/in/pete-millett-0ab50711/

 


Lion Moeliono

Global Manager, Digital Manufacturing Transformation & Innovation
Rockwell Automation


https://www.rockwellautomation.com/en-us.html

https://www.linkedin.com/in/lion-moeliono-0058752/

 


Raja Shembekar

Vice President Manufacturing & Corporate Officer
PACCAR


https://www.paccar.com/

https://www.linkedin.com/in/raja-shembekar-06934ba8/

 


Balthazar Moncada

Director of Operations | COO
HELVEX


https://www.helvexusa.com/

https://www.linkedin.com/in/baltazar-moncada-rodriguez/

 


Hugo Alberto Gomez Sierra

CEO
Condumex


https://condumexinc.com/

https://www.linkedin.com/in/hugo-gomez-a2370011/

 

ML Journal

The Road to Digitalization: Evaluating Readiness for Digital Transformation

Manufacturers should employ a comprehensive assessment framework to identify strategic actions required to achieve a higher level of digital maturity. 

 

TAKEAWAYS:
Manufacturers that stand still run the risk of falling behind.
The insights are in the data, fueling the continuous improvement cycle, where each step reveals new opportunities for innovation and optimization.
Measuring digital maturity is the catalyst for the transformative process.  

 

The fourth industrial revolution has driven the manufacturing industry to an inflection point where technological advancements are no longer just accelerators for growth but fundamental for organizational survival. This digital shift is not merely about adopting new technologies—rather it is about realizing a profound change in how organizations operate, innovate, and deliver value. As leadership focuses on finding a strategic balance between technological advancements to realize quick, tangible benefits while maintaining the flexibility to scale operations in an increasingly complex environment, one thing remains constant—namely, the insights are in the data and the ability to assess an organization’s preparedness for digitalization is paramount for success.

Redefining Readiness: A Fresh Perspective to Drive Transformation Differently

Of the many manufacturers that have started their digital transformation journey, relatively few have realized the value they aimed to achieve, often because they are simply starting in the wrong place. Building the future factory involves visionary leadership and practicality, beyond just adopting new technologies for quick changes. Leaders must envision their organization’s future, not by predicting technologies, but by understanding industry directions, their starting point, and the competitive path forward. This intersection of industry trends, current state, and defined organizational objectives, gives birth to an organization’s unique digitalization strategy—underscoring digital readiness and representing a holistic approach that integrates the technological, cultural, and operational facets of an organization to derive true digital value.

A McKinsey & Company study highlights the significance of digital readiness and understanding one’s digital maturity and indicates that companies that excel in their digital transformation efforts are twice as likely to report double-digit growth rates compared to their less-prepared counterparts (McKinsey 2020). But, with their enthusiasm for technology adoption and their emphasis on strategic planning, many manufacturers overlook assessing digital maturity and the readiness of current systems to integrate with new technologies.

Digital maturity denotes the sophistication with which an organization incorporates digital technologies and methodologies across its operational frameworks, customer engagement strategies, and innovation initiatives. This concept evaluates several dimensions, including the automation level and digitization depth of core business workflows, the strategic application of data analytics for enhanced decision-making processes, and the comprehensive integration of advanced digital technologies such as robotics, artificial intelligence (AI), and the Internet of Things (IoT) within the enterprise ecosystem.

“A digitally mature enterprise can be characterized by its advanced integration of technology across all facets of its operations.”

 

Through this rigorous exercise, leaders can identify the most critical technologies and processes that will provide the quick win, tackle the most prominent operational deficits, drive alignment of their operational goals, and serve as a foundation for future scalability. Using this information as a baseline, you can shape your digital transformation strategy from a simple shopping list of the latest technologies and transform it into a more comprehensive road map that addresses the gaps and leverages the existing strengths of existing operations.

Digital Mastery: Key Indicators of an Advanced Organization

In its 2023 Manufacturing Horizon Report, CRB revealed that companies effectively integrating the right technologies with their operational dynamics have experienced a surge in productivity by an astounding 27 percent, and a subsequent reduction in operational costs by nearly 19 percent. A study by Deloitte shows companies at the highest level of digital maturity are 26 percent more profitable than their industry averages.

A digitally mature enterprise can be characterized by its advanced integration of technology across all facets of its operations. From strategic decision-making to day-to-day processes, such organizations leverage digital tools and platforms to enhance productivity, foster innovation, and deliver superior customer experiences. Central to their operational model is the use of data analytics and AI to drive business insights, ensuring agility and responsiveness to market changes while simultaneously prioritizing cybersecurity and data privacy, embedding these considerations into their technology architecture and everyday business practices.

But digital maturity is not just about technology adoption, it’s about transforming organizational behaviors and business models so they can thrive in the digital age (Deloitte 2020; McKinsey & Company 2021). In these organizations, essential operations are no longer confined to isolated departmental units—rather they are developed and overseen by interdisciplinary, production-focused teams with well-defined performance standards and business objectives. The most technologically advanced organizations possess the infrastructure to facilitate comprehensive platform-based procedures, bolstered by self-sufficient resources at the forefront. These cross-functional teams are at the core of cultivating the next generation of manufacturing culture: they consistently provide scalable, technology-led solutions, products, or client experiences, fueled by a continuous cycle of learning and innovation that stimulates regular advancements and enabling them to adapt swiftly to evolving client expectations. and driving their competitive edge.

From Traditional to Transformed: The Path to Digital Maturity in Manufacturing

Navigating the intricate journey towards digital maturity requires a sophisticated understanding of the evolutionary stages that manufacturing entities must traverse. Leading industry consultants have highlighted delineated frameworks that categorize such progression within manufacturing environments. While each has their own interpretation, these stages, broadly outlined, transition from initial digital awareness, where the digital strategy is nascent and fragmented, through to a fully integrated digital ecosystem, characterized by advanced analytics, IoT implementation, and AI applications. This progression encapsulates a journey from foundational digital capabilities towards a transformative state, where digital technologies are leveraged not just for incremental improvements but are deeply embedded into the fabric of operational processes and strategic visions, driving innovation, efficiency, and competitive advantage in a connected, smart manufacturing landscape.

“Navigating the intricate journey towards digital maturity requires a sophisticated understanding of the evolutionary stages that manufacturing entities must traverse.”

 

Coupled with such widely recognized industry knowledge, our real-world experience has driven the creation of a digital maturity methodology that emphasizes a people-first, technology-enabled approach, focusing on the strategic deployment of technology to deliver real business value. By identifying areas for maturity enhancement within organizational and technological domains (OT/IT), we facilitate the transition towards a fully optimized manufacturing solution. Central to our process are six key technology pillars that support digital manufacturing advancements, employing an iterative transformation lifecycle that incorporates analysis and feedback after each phase to refine processes and improve data collection (Figure 1). This ensures a continuous loop of improvement and adaptation, aligning technology implementation with human insight and collaborative engagement.

Figure 1: The path to digital maturity

Metrics of Modernization: Maturity and Momentum

Quantifying an organization’s digital maturity involves a systematic approach. This approach includes evaluating the integration and effectiveness of existing digitization across all business units and providing leaders with a clear understanding of their current position in their digital transformation journey, while simultaneously outlining the path toward achieving higher levels of technological integration and operational efficiency. This multi-dimensional assessment includes an analysis of several key factors: digital strategy formulation, leadership commitment towards digital initiatives, operational agility for adopting new technologies, the level of client engagement through the digital ecosystem, and the empowerment of the workforce with digital tools and skills. This measurement not only benchmarks an organization’s current capabilities against industry standards and best practices, it also identifies gaps and areas for improvement, facilitating targeted investments in technology, processes, and workforce development, strategically allocating resources for digital growth. Ultimately, the measurement accelerates an organization’s transformation into future-proof, digitally mature enterprises that are more competitive, thereby fostering a culture of digital excellence that is adaptive in the rapidly evolving digital landscape.

While many recognize that the ability to measure maturity is a powerful catalyst for change, it can be challenging to successfully quantify relevant insights. From a broad perspective, effective metrics to provide granular insight into three specific dimensions of transformation:

Technology:

  • Overall equipment effectiveness is a critical metric for measuring manufacturing efficiency, combining performance, availability, and quality.
  • Percentage of connected assets: Quantify the scale of IoT implementation, the degree of automation, and the existing adoption of advanced technologies.
  • Data capture rate: Measure the breadth of real-time data collection for analytics.

Process:

  • Data-driven decision-making capabilities in production, planning and scheduling, inventory management, and integrated supply chain management. This includes examining lead times and cycle times to track gains in agility and responsiveness; evaluating inventory turnover ratio to measure supply chain optimization and risk reduction; and studying first-pass yield to track improvements in quality control aided by data analytics.
  • Workflow optimization for efficiency and agility.

Organization:

  • Leadership commitment to digital transformation and strategic alignment, including a digital skills index to evaluate workforce digital literacy.
  • Cross-functional collaboration enabled by technology platforms that quantify cross-functional project success rates and collaboration effectiveness.
  • Cybersecurity, data governance, and risk management protocols in place to expose vulnerabilities or inadequate practices, including cybersecurity Posture Assessment

Organizations can adopt various frameworks and/or maturity models to systematically evaluate and benchmark their digital progress against parameters, enabling a structured roadmap for digital advancement. We highlight several frameworks organizations could use for a structured assessment approach:

  • Smart Industry Readiness Index (SIRI): EDB’s framework provides a rigorous 16-dimension assessment. The Prioritization Matrix (TIER) facilitates targeted action based on today’s state, impact to the bottom line, essential business objectives, and references to the broader community.
  • Acatech Industrie 4.0 Maturity Index: This model uses a stage-based approach to help organizations chart their maturity progression and define their developmental trajectory.
  • Digital Maturity Models (Deloitte, BCG, CESMII, etc.): These consultancy frameworks offer broader enterprise-level assessments, aiding strategic alignment.

In my experience, the journey to digital maturity demands an honest assessment of your organization’s current standing. By adopting any of the proven frameworks and critically analyzing the data, manufacturing leaders gain a diagnostic blueprint for targeted action. This process uncovers the specific investments in technology, process optimization, and workforce development that will yield the highest return, transforming the framework from a mere scorecard into an instrument of strategic change by creating the business case for your continuous improvement initiatives.

Charting the Course: Evaluating Progress Towards Digital Excellence

Given the dynamic ecosystem of the manufacturing industry—characterized by fluctuating demand, raw material availability, and geopolitical uncertainties—the ability to effectively scale a technology strategy and advance your digital maturity is tantamount to achieving operational agility and sustained growth. Scaling is not merely a replication of solutions that have demonstrated value in a small-scale setting; it is an intricately planned endeavor that aligns technology with business objectives, regulatory frameworks, and workforce capabilities. Contrary to popular belief, it does not merely refer to deploying more of the same technology across an enterprise. It involves understanding the contextual intricacies of each operational environment and adapting the foundational strategy to the idiosyncrasies accordingly.

“By strategically leveraging assessment frameworks and focusing on actionable insights, manufacturing leaders gain a powerful tool for continuous improvement.”

 

For instance, a mid-sized automotive supplier improved operations by using a digital maturity assessment, which identified a gap in data analytics. By investing in IoT sensors and cloud analytics, they reduced downtime by 15 percent, improved efficiency by 8 percent, and fostered a proactive maintenance culture. Similarly, a large food and beverage company enhanced its complex supply chain visibility and efficiency through a maturity assessment, adopting cloud and IoT technologies to improve delivery rates, reduce inventory costs, and ensure food safety. These examples underscore the value of data-driven decisions and targeted strategies in driving continuous improvement, innovation, and resilience against technological disruptions and evolving market demands, highlighting the importance of a culture of innovation integrated into operational practices.

This path toward digital maturity is an ongoing journey, not a single destination. The importance of understanding where to begin extends beyond the immediate advantages of implementing technology, nurturing a manufacturing sector that is both resilient and visionary. By strategically leveraging assessment frameworks and focusing on actionable insights, manufacturing leaders gain a powerful tool for continuous improvement. This approach equips organizations with the capability to adeptly confront the challenges and seize the opportunities that emerge in the digital era, driving their long-term competitiveness and adaptability, purposely and efficiently. The ultimate reward, however, lies not just in achieving a higher maturity score, but in building a manufacturing enterprise that will thrive in the dynamic industrial ecosystem.

About the author:

 

Holly Becker is director of Commercialization at ATS Applied Tech Systems, LLC.

ML Journal

For Manufacturers, Digital Maturity Hasn’t Yet Come of Age

Manufacturers are at an early stage of understanding how far advanced they are with Manufacturing 4.0, as they grapple with linking digital strategy to business strategy, cultural and organizational issues, and leadership development challenges.  

KEY TAKEAWAYS:
A majority of manufacturers either do not have a formal process for digital maturity or do informal benchmarking.
A majority of manufacturers have a digital maturity target of Manual Execution with Digital Support, with an equal balance of companies feeling like they are on track or behind schedule.
Digital strategy, in general, is still poorly integrated with overall business strategy, capital strategy, supplier decisions, and M&A strategy yet remains vital towards future competitiveness.  

 

As companies continue to share feedback that they are either not seeing value from digital transformations or are feeling like they are behind schedule, MLC fielded a new survey to understand how companies are managing digital maturity. Having clear criteria for success is important for any transformation journey, and the survey results show that manufacturers are just starting to put in place formal metrics for assessing their maturity.

Manufacturers continue to focus on building the core foundation of Manufacturing 4.0 through technology investments and workforce development. However, in order to become digitally mature, what’s required is a deeper integration of Manufacturing 4.0 with the rest of manufacturers’ business processes. Additionally, to overcome the cultural barriers facing digital transformation, leadership teams need to be more committed to their own development and active engagement in this change.

Section 1: Measuring Digital Maturity

Measurements of digital maturity are not yet universally defined, which leads to variation in how companies understand their current maturity level. Currently, roughly 10% of manufacturers (across both SMM and large companies) do a formal external assessment against some sort of defined standard. Roughly 30% (again, for both SMM and large) do external benchmarking. With regards to internal assessments, however, there is a significant difference, with roughly 46% of large manufacturer respondents doing internal assessments across factories. Most large manufacturers that conduct any sort of assessment do so through a combination of assessments, while most SMMs do only one type of assessment. Overall, however, roughly 50% of total respondents do not have any formal process by which maturity is assessed.

This lack of a formal process is validated by the frequency in which assessments are done. For SMMs, the majority of companies that do assessments do so once a year or less. For large manufacturers, it is roughly split between ongoing assessments and once a year or less.

Finally, there is a difference in the business metrics that align with digital maturity. For SMMs, the focus is on customer and employees (on-time delivery, product quality, and employee satisfaction are in the top 5), while large manufacturers are focused on traditional operational metrics (cost savings, OEE, and productivity are in the top 5).

1. Digital Maturity is Still a Feeling vs. a Quantifiable Metric

Q: How does your company measure digital maturity? 

2. Few Link Maturity Measurements to Formal Planning Cycles

Q: How often do you measure digital maturity

3. SMMs Leverage Customer and Employee KPIs, While Large Firms Rely on Traditional Operational Metrics

Q: What business KPIs are used specifically to measure digital maturity?  

When looking across various aspects of the business, survey results show consistency between SMM and large manufacturers when it comes to digital maturity target, progress, and peer competitiveness. The digital maturity targets for operations and supply chain reflect normal distributions, centered around a level 2 – manual execution with digital support. For maintenance, product development, and workforce development, the results indicate left-centered distributions, with more companies targeting lower maturity levels than for operations or supply chain.

Digital progress versus target is relatively consistent across all processes, with an even distribution between on-track and behind schedule. The biggest gap in progress is around workforce development.

Finally, when comparing to peers, survey respondents indicate a difference in perception, especially around operations, with 23% of respondents feeling they are ahead of their peers. As with their internal view of progress, the area where companies feel they are further behind their peers is around workforce development.

4. Digital Maturity Targets Reflect the Challenges of Transformation

Q: How would you assess you digital maturity TARGET?

5. Project Success Guides Progress

Q: How would you assess your digital maturity LEVEL vs. TARGET?

6. Peer Assessments a Mixed Bag

Q: How would you assess your digital maturity vs. your PEERS?

Section 2: Digital, Business Strategy Integration Lacking

When looking at how digital transformation strategy is integrated with other business strategies, there is quite a bit of variability, with the weighted average relatively low. On a scale of 0-10 (with 10 being highly integrated), the survey results peg overall business strategy and capital investment strategy at ~3.3. The integration with M&A, partnerships, and supplier decisions is less at ~2.5. However, the overall importance of digital maturity towards future competitiveness is ~4.7.

This validates the need for integration of digital projects in all aspects of the business as critical for digital maturity growth.

7.Strong Influence of Digital Maturity on Competitiveness

Q: How well does your smart factory strategy integrate / influence the following?
1 (low integration / importance) – 10 (high integration / importance)

 Section 3: A Need for Greater Leadership Knowledge

Leadership plays a critical role in corporate culture. As culture continues to be identified as a key driver for digital transformation success, the data demonstrates a validation of the need to continue to focus on developing leadership knowledge and skills with the same rigor as front-line workers. Two-thirds of respondents feel that leaders are knowledgeable about Manufacturing 4.0 but are in need of external guidance to effectively lead transformation efforts. Additio