Digitalization: Key to the Future of Electronics Manufacturing?

Estimated reading time: 3 minutes

Electronics manufacturers have long relied on automation to streamline their production processes. The concept of the smart factory takes this one step further with artificial intelligence (AI), robotics, analytics, big data, and the Internet of Things (IoT) promising an even greater level of autonomy, agility, and connectivity.

IoT sensors and devices can be used to connect our machines and provide detailed information about their condition. The integration of robots on the factory floor can facilitate unmanned production and increase productivity. Sophisticated analytics—together with AI and machine learning—are taking on many of a factory's routine tasks and providing invaluable data to make real-time decisions.

The potential of the smart factory also extends far beyond the factory floor to encompass the manufacturer's supply chain, customer service, after sales, office administration, and HR. As the latest Manufacturer's Annual Manufacturing Report 2019 highlights, smart factories offer an exciting range of transformational digital technologies that promise to improve efficiency, cut costs, and give companies a competitive edge. According to the report, the global worth of IoT is estimated to reach a massive £4.7 trillion by 2025.

But while many organisations say they are keen to capitalise on the newest digital technologies, surprisingly few are actively taking them up. How successfully they are being implemented is still largely reliant on an organisation having robust leadership and a clear strategy. So, what are some of the key themes electronics manufacturers can take away from the 2019 Manufacturer's Report?

Digital Technology Has the Power to Drive Efficiency

Driving business efficiency is an ongoing challenge for U.K. manufacturing. The report also reveals that there's resounding agreement on the value of adopting digital technologies to increase business prosperity.

Seventy four percent of manufacturers believe that new smart technologies will be pivotal in helping them transform their operations, whether through improving design and production processes (77%), streamlining their internal company processes (74%), helping them communicate more effectively with their supply chain (42%), or helping them deliver a better customer purchasing experience (40%).

Predictive maintenance is also considered to be one of the key technologies that can be harnessed to proactively identify problems, increase machine life, reduce machine downtime, and boost electronics manufacturers' operating profitability.

Investment Is Still a Hurdle for Many

But while the vast majority of manufacturers recognise the value of new digital technologies, it's clear that when it comes to adopting them, there are a fair few obstacles to overcome.

Just over one-quarter of respondents (26%) stated that while the adoption of digitalisation was on their wish list, they were unsure as to what they need to do to implement it. Surprisingly, too, one in four manufacturers said that they currently have no digital plans in place. Among the main reasons for their reluctance to act were not having a coherent digital strategy and difficulty in understanding the practical applications that the new technology would offer within their organisation.

For many businesses too, there is still a reticence to break the traditional boundaries between different functions, to seek out the new skilled workforce that they need, or to buy into the concept of flexible and continuous improvement.

There’s Good News for Humans

While the fear of robots stealing our jobs may still be a pervading one in popular culture, the 2019 Manufacturing Report suggests that within the manufacturing industry, there's no need to be so worried.

In fact, 91% of respondents say they believe that their workforce is more engaged when working alongside machines rather than operating them. Further, 90% say that the data they will be able to gather from connected machines will be hugely influential in reducing costs and informing their decision making. There is also strong agreement that while digitalisation may lead to some reduction in the workforce, it is just as likely to help companies achieve more with the workforce that they currently have.

Conclusion

The 2019 Manufacturer’s Report makes a strong case for the value of digitalisation in global manufacturing. As Cara Haffey, industrial manufacturing and automotive leader for PwC, succinctly sums it up, "The U.K. has a tremendous platform to capitalise on these technologies, but adoption needs to be accelerated." What’s required, she says, is “clear leadership...and a desire for organisations to be braver in disrupting their existing business models.”

Neil Sharp is the director of marketing for JJS Manufacturing.