According to the World Economic Forum, more than 70% of companies belonging to the manufacturing industry are stuck in the first steps of digital transformation, unable to pass the trial period. The impact of COVID-19 accelerated the digitization process of many factories by exposing their weaknesses and laying the foundations to begin the digital transformation process.

A recent survey of a group of CFOs from different manufacturing companies found that 89% have considered digital transformation among their TOP 5 priorities. Approximately half of those surveyed (46%) agree that it is the primary driver of the increased spending on technology, with 73% noting that the pandemic drove increased spending on digital transformation initiatives. Digital transformation offers endless benefits for the manufacturing industry throughout all parts of the manufacturing process: production, supply, fulfillment, and customer experience.

Digital transformation in the manufacturing industry

Take traditional manufacturing processes, add new technologies, and then insert them into every step of the operation, and you have digital transformation in manufacturing .digital transformation. It drives better quality control, achieves substantial efficiency gains, and creates a better product with reduced costs and superior environmental controls. You are changing every aspect of manufacturing, creating huge advantages over your competition and the changing world.

Increased IT spending is transforming manufacturing companies' operations, enabling them to do more with less, increase efficiencies, reduce costs, and respond to consumers' increased need for customization. The manufacturing industry is a central point in the economy of any country. Previously, production could be a laborious process due to the manual operation of all processes. However, thanks to the introduction of digital technologies, there has been an improvement in eliminating long chains in manufacturing operations, achieving a positive impact. Thanks to the application of computers with artificial intelligence, instructions can be taken and executed effectively. And this has caused the production capacity in these industries to have increased significantly.

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Challenges of digital transformation in the manufacturing industry

There are several challenges, as there are with any significant corporate shift. To properly undertake digital transformation, several obstacles must be overcome.

Identification of Challenges

Digital transformation needs enormous research on new technologies, their benefits, implementation, and ongoing support.

Organizations need qualitative research to determine the best times, places, and methods for implementing systems. The primary benefits and limitations can be identified through interviews with management, industry experts, and current employees.

Common Challenges to digital transformation include.

  • Missing skills: IT and process knowledge
  • Technical barriers: dependence on other technologies, security problems, and existing infrastructure
  • Individual barriers: fear of losing a job and acceptance of technology
  • Organizational barriers: resistance to change and risk aversion
  • Environmental barriers: lack of norms and laws

Organizational Challenges

The key to implementing digital manufacturing lies in management and people. Commitment is needed, so processes are thoughtfully developed, carefully implemented, and then managed correctly. Organizations need research to blend the physical world (complex hardware, customer requirements, and workforce) with the digital world (software, analysis of data, and digital services).

Manufacturers may consider appointing a chief digital officer (CDO) to oversee digital transformation research and implementation. This, however, needs the buy-in and supervision of the CEO and a good balance between collaboration and specialization.

Manufacturers must prioritize the changing focus of IT departments. With legacy systems still needing maintenance, traditional corporate IT is still needed, but complex infrastructure requires challenging modern thinking by the right leaders.

Leadership is vital to running the organization, from top management to contractors and staff. Not only that but leadership is needed to develop new partnerships with suppliers and customers. CDOs can improve the very foundation of the business with efficient daily operations and datadriven technology outcomes.

Technical Challenges

The transition to digital manufacturing may be challenging due to legacy programs already in use, a high barrier to entry, and a need for software expertise. Existing software and hardware, coupled with traditional IT thinking, do not allow for independent scaling of components, making processes constrained and wasteful.

To overcome conventional obstacles, transition to cloud-based digital manufacturing, and reap the many advantages offered, a platform ecosystem that responds to needs rather than current software is required.

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Benefits of digital transformation in the manufacturing industry

There are enormous benefits for organizations undertaking digital transformation. In addition to the financial and business benefits, there are also environmental and social positives, making transformation imperative to remain viable and competitive.

Manufacturers can create higher-quality products with higher output quality, more sensors, automated testing, and quality control throughout the manufacturing process. Using the Pareto principle (and insights gained from machine learning), manufacturers can make changes to any production line to reduce errors and improve processes.

  • Increased process efficiency
    Organizations can eliminate human error from their manufacturing processes thanks to hyperautomation. Hyperautomation integrates machine learning (ML) and artificial intelligence (AI) to increase human activities.
  • Good environmental practices
    As consumers increasingly demand positive green practices, technology is evolving to provide answers. AI-powered and monitored machinery increases efficiency and reduces energy consumption. An increase in efficiency often supports lower material consumption as well. The ecosystem benefits greatly from less resource use.
  • Reduced costs, increased margins
    For manufacturers, digital transformation lowers costs Manufacturers can diagnose and fix issues faster thanks to the Internet of Things (IoT). This decreases downtime. Connected machinery offers a variety of benefits to manufacturers, such as diagnosing problems before they arise and planning maintenance during downtime to increase productivity.
  • Personalization, agility, and more excellent customer orientation
    Arguably one of the biggest challenges for manufacturers is customizing products at scale. Customers will spend more on customization but want the same responsiveness and speed that off-the-shelf products provide.
    An agile manufacturing process enables a customer-centric business. The data-driven production machinery that understands and applies customization parameters can directly influence production lines.
  • Resistance
    In business, resilience is critical to thriving in difficult circumstances. While operations are resilient, adaptability is crucial to long-term success. To stay ahead of the competition, manufacturers must be able to foresee problems and adapt.
    Digital technologies support manufacturing by utilizing flexible automation, working remotely, and tying the supply chain together via a cloud-based infrastructure.
  • Manufacturing as a Service (MaaS) and Cloud Manufacturing
    Manufacturing as a Service (MaaS) businesses work as independent contractors, producing goods for the businesses who hire them while splitting the cost of software, equipment, repairs, and upkeep. This creates efficiency and increases capacity utilization; having a location that operates 24 hours a day, seven days a week, is much more productive and efficient. A MaaS organization can reap the benefits of operating around the clock by taking over production for various businesses.
    Automated digital processes are also a perfect tool for companies employing MaaS organizations, allowing expansion into higher product volumes and new product ranges without investing in more equipment and infrastructure.
  • Cloud Manufacturing
    Although the creation of physical elements is limited to the physical sphere, increasing the acceptance of cloud-based architecture offers excellent advantages to organizations. Cloudagnostic software enables agile development, eliminating the need for monolithic legacy applications. With the increasing reliance on the Internet of Things (IoT), there is an increased demand for data. Systems that can accommodate massive amounts of data and process it quickly, without interruption or risk of loss, are essential for organizations.
    A cloud-based system that is well-researched and implemented offers unique benefits to manufacturers. Remote operations mean manufacturing can continue without staff. A holistically designed system means that every step of production is automated, eliminating the risk of error at every stage.
    For example, a customer places an order online. The system decides if there is enough product in stock, and if not, it instructs the production line to create new products. Automatically sorts raw materials, if necessary. The product is created, with machinery monitored for any glitches, glitches, or problems. The product is shipped, and the customer automatically invoices. While humans are still required, cloud-based systems can access anything they need, make changes, and view progress from anywhere.

Emerging trends in the Digital Transformation of Manufacturing

When talking about Digital Transformation within the manufacturing industry, emerging trends that indicate where the future of the industry is headed include the following.

  • Industry 4.0
    Industry 4.0 is an entirely new world of automated industrial operations, especially in the communications sector. In this vision, it is believed that computers and machines, with the help of artificial intelligence, can start processes and run them independently. Within this digital transformation, the business approach around these industries will automatically change and attract more consumer demand.
  • 3d print
    According to information obtained by Global Data's Disruptor Tech Database, 3D printing plays an essential role in providing the necessary technology to power the future of manufacturing industries. Due to a large amount of automated data, digitization facilitates all businesses in the manufacturing industry: from manufacturers to low-end customers.
  • Smart Manufacturing
    Smart Manufacturing is a way to interconnect all the companies involved in manufacturing through a central server. The server will automate each function, help learn the systems involved, and execute changes on the fly. This method makes these industries highly flexible and adaptable to lean manufacturing, focusing primarily on minimizing waste and maximizing profit. With Smart Manufacturing, many products can be produced and customized more efficiently, benefiting both the consumer and the manufacturer simultaneously. Profits will also skyrocket for manufacturers due to the adoption of a lean manufacturing system.
    We recently witnessed a significant advancement in the networking industry; we are referring to the introduction of the 5G network – a much faster and more efficient data networking technology for industries worldwide. This network will impact many areas within manufacturing by speeding the delivery of information from one operation to another. Apart from facilitating communication between manufacturers, the 5G network also lays the foundation for a better infrastructure for e-commerce. All businesses dependent on online transactions can be carried out much faster and more efficiently.
  • Make decisions by computer
    It's not just humans learning to make valuable and informed decisions: machines also learn from the data they collect by building algorithms. Using these learning algorithms, computers can analyze changes and create patterns that help predict the future of manufacturing practices, which ultimately translates into overall decision-making. Some of these decisions made from machine analysis include employee work execution actions, time series predictions, and proper time logistics.
  • Advanced robotics
    The future of manufacturing is anticipated to come hand in hand with advances in robotic manufacturing. Combined with machine learning and artificial intelligence, advanced robotic manufacturing can perform activities independently and coordinate with each other to accomplish tasks. Unlike humans, whose activities can be compromised by extreme feelings such as joy, pain, and sadness, these robots are emotionless and expressly programmed to carry out their duties, leaving human employees without physically demanding work in exchange for managing automation.


After looking at these trends, let's take a look at the advantages for the manufacturing industry.

  • Better use of data: Optimum use of data will help manufacturing industries plan efficiently, produce only what is required, and - most importantly - improve flexibility in their operations.
  • Process Improvements: Digital transformation will help bring about a significant revolution in manufacturing operations. Historically, all procedures were manual and required much time and effort. On the other hand, digitized operations are efficient and cost-effective, not to mention how much time you save on processes.
  • Digitization in the manufacturing industry: Digitization has also promoted more innovations. Due to the increase in research, many innovations are taking place, positively impacting the manufacturing industry. Innovations are the key to continuous quality improvement in production, resulting in customer satisfaction.

Through digital transformation, manufacturing companies are also experiencing more innovative outsourcing. It is a way of outsourcing that involves the use of technology; necessary for the use of electronic commerce to link manufacturers with their globalized customers.

Customer centralization is another essential aspect of digital transformation in the industry. Established digital structures allow manufacturers to contact customers anytime, anywhere, on different web channels.

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