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Actionable Digital Transformation Strategies for Manufacturing

 | May 11, 2023

Key Takeaways:

  • Get digital transformation examples across the product development lifecycle
  • Learn how digitalization applies to product design, manufacturing processes, and production

The Full Article:

The impact of the pandemic, unyielding market pressure, and continuing uncertainty have reshaped the economic landscape. This is especially true in manufacturing, where companies are taking significant steps to meet new customer demands, regulatory requirements, and competitive threats.

Big challenges call for bold action. And this includes taking risks and adopting new ways of working and thinking. SpaceX and Apple are just two examples of innovators that have shaken up their respective industries in ways considered impossible just a few years ago. In manufacturing, forward-thinking companies are embracing digital transformation initiatives to unlock new opportunities, gain new levels of responsiveness, and stay ahead of their competition.

But how are they doing it? To answer that question, this article covers the following digital transformation strategies and best practices for manufacturers:

  1. What is Digital Transformation in Manufacturing?
  2. Digital Twins for Manufacturing
  3. How Product Development Uses Digital Transformation
  4. How Sourcing Uses Digital Transformation
  5. How Suppliers Use Digital Transformation
  6. Take the Next Step in Digitalization

1. What is Digital Transformation in Manufacturing?

Digital transformation is often synonymous with “Industry 4.0” and “digitalization.” At a high level, digital transformation in manufacturing refers to converting manual manufacturing operations into digital formats (also known as digital twins) to simulate the entire product development lifecycle: product designs, manufacturing processes, and factories. Digital technologies enable stakeholders to address manufacturing complexity by automating multiple manufacturing scenarios simultaneously within minutes.

Gain Automated Insights

In manufacturing, “simulation” is often associated with product design optimization using software that addresses structural analysis (FEA), fluids, etc. aPriori has extended this capability by enabling organizations to simulate multiple manufacturing processes as well as specific factories and/or manufacturing locations.

Manufacturers that can simulate design and production scenarios rapidly are well-positioned to anticipate new opportunities and sidestep potential roadblocks. And using the digital twin model, companies can simulate the product design, manufacturing process, and factory specifications simultaneously.

And it enables companies to run “what-if” scenarios regarding product cost, carbon, manufacturing process, and location – and make data-driven decisions quickly and accurately. By extending simulation capabilities throughout the product development lifecycle, manufacturers have the visibility to address profitability, sustainability, manufacturability, and risk.

Benefits of Digital Technologies

Digital transformation benefits for product manufacturers include improved production cycles, increased customization, and better products. Not to mention the overwhelming competitive advantage digital solutions can unlock for manufacturers.

McKinsey confirmed that successful digital transformations yield exceptional returns. Across many manufacturing sectors, it is common to see 10%-30% increases in throughput, a 15%-30% improvement in labor productivity, a 30-50% reduction in machine downtimes, and an 85% increase in more accurate forecasting.

2. Digital Twins for Manufacturing

Three types of digital twins

Today’s manufacturing companies need end-to-end digitalization to extend the value of their existing investments, such as 3D CAD and product lifecycle management (PLM) systems. Digital transformation with automation capabilities can enable organizations to work more efficiently and collaboratively to meet their manufacturability, cost, and sustainability targets.

As digitalization has evolved, manufacturing industry leaders are coalescing around the idea of connecting multiple digital twins to provide end-to-end visibility, insights, and responsiveness. Specifically, companies are thinking beyond the traditional product digital twin to gain new insights from digital manufacturing process twins, and digital factory twins.

Companies can combine automation and manufacturing simulation software to thread three digital twins together and unlock actionable, real-time data for better decision-making. Here’s how the digital twins connect across the product development life cycle:

  1. Digital Product Twins refer to 3D CAD models or virtual representations of physical assets or products. Companies often only focus on this first step rather than the following two phases of a complete, end-to-end enterprise digital twin solution. Discover how Carrier saved millions with aPriori’s digital product twin.
  2. Digital Process Twins determine the most effective product manufacturing method. Companies simulate manufacturing processes using the digital twin to identify the most appropriate production process for cost, sustainability, and manufacturability. Learn how AGCO used aPriori’s digital process twin to gain manufacturability and cost insights in just a few clicks.
  3. Digital Factory Twins represent virtual factories. Detailed factory specification data includes regional costs such as labor, electricity expenses, material costs, and overhead rates. And it can also include specific production capabilities per factory. Get a glimpse into how AGCO built an internal digital factory with processes and routings, configurations, and production.

Next, let’s review how engineering, sourcing, and supplier teams are improving their operations as they become more digital.

3. How Product Development Uses Digital Transformation

Digital transformation in engineering starts by integrating the digital twin (3D CAD model) with smart manufacturing processes to make informed design decisions based on how well the product is optimized for a specific production line. Digital technologies also enable cross-functional teams to collaborate and share data across the product lifecycle.

Impact Example

A large European defense contractor started using aPriori to help facilitate conversations between engineering and sourcing. In one example, sourcing received a low number of bid responses, and the bids they received were expensive. The suppliers attributed their high quotes to a manufacturing specification that required a small undercut in the middle of a component.

Sourcing brought the design to engineering, opened the part in aPriori, and received automated guidance to improve design for manufacturability (DFM). Engineering validated this issue and updated the design. The result: a 50% quote reduction based on the design change.

4. How Sourcing Uses Digital Transformation

Best-in-class companies have been employing technologies that provide sourcing teams with early insights into what’s coming down the product pipeline. This capability supports collaborative, fact-based discussions internally across the product teams and externally with suppliers. Today, we’re seeing companies employing new ways of working with the supply base.

Impact Example

One global manufacturer’s cost engineering team needed to scale its should cost capabilities and collaborate globally more efficiently. The company adopted aPriori’s cloud-based solution and generated more than 150,000 product costings in its first year. And aPriori contributed to more than $30 million in realized savings. 

5. How Suppliers Use Digital Transformation

Because OEMs are accelerating new product development to reach market faster, suppliers are under pressure to respond just as quickly – and sometimes much earlier in the design process. And the quotes need to be accurate to avoid costly mistakes.

To address speed and accuracy, more providers across the supply chain are exploring the use of digital factories. If OEMs and their suppliers use aPriori manufacturing insights data, both sides can better understand what’s driving costs – and collaborate to bring those costs down.

Impact Example

By embracing digital transformation, Flex, a major supplier, has accelerated its quoting process from weeks to days. And the company has increased its win rate from 12% to 68% just by being more responsive.

6. Take the Next Step in Your Digital Transformation Strategy

At its core, digital transformation provides a technology and data foundation that is interoperable, scalable, and has the agility to support business needs today and in the future (e.g., machine learning, artificial intelligence [AI], robotics, IoT, etc.). And like any new approach, it requires the right executive leadership, people, processes, and employee buy-in to succeed.

Digital transformation initiatives that connect teams, data, and business processes have an opportunity to realize quantifiable benefits quickly. That’s because product team members can make informed business decisions to get to market faster, remain competitive, improve innovation, and increase profitability.

Manufacturers have a clear opportunity to cut costs and time to market by aligning product design closely with procurement and production. The future of manufacturing is a digital transformation. Are you ready?

Take the Next Step in Your Digital Transition

Read our guide to apply digital transformation to manufacturing.
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