Digital transformation (DX) signals a new reality where corporate strategies and leadership roles must be involved in technology deployments across an enterprise to solve traditional business challenges. Industrial companies are facing an increasing skills gap, mounting cost and profitability pressures, as well as threats rising from new and existing competitors. At the center of these converging forces are manufacturers focused on defining clear digital transformation business outcomes―in other words, how DX can be leveraged to differentiate products, improve operational efficiency, and make workforce productivity soar.
Defining what digital transformation means for business is imperative to unlocking industrial innovation. Through research and observation, PTC has identified five top priorities for manufacturers on their digital transformation journeys. For those charting their own path, it can be helpful to understand how the industrial sector views DX and the business outcomes it can deliver.
Enhancing operational efficiency, agility, and effectiveness is the primary goal of digital transformation for most industrial companies. Today, manufacturers are focusing heavily on DX strategies that have the potential to improve uptime, support continuous process improvements, and boost workforce productivity.
Consider what DX is doing for KTM, one of Europe's largest manufacturers of motorsports vehicles. KTM is utilizing 3D CAD solutions to create, analyze, view, and share product designs between nearly 500 engineers using a mix of 2D, 3D, and other modeling capabilities. This means teams can work together to optimize their results and shorten development cycles. For instance, the engine team for a new motorcycle wants large vents for maximum air intake and power. The chassis team meanwhile wants a smooth surface for minimum wind resistance. Using the same design software, the two teams can work cooperatively to find the best possible solution.
In one case, KTM developed a new sport bike in record time using a single CAD system across its product development process. The bike sped from first concept to production in just 22 months, a 15% reduction in time-to-market compared to the previous generation.
Ideas are a product team's most critical asset and digital technologies can turn those ideas into real products by supporting knowledge sharing, teamwork, and efficiency throughout every stage of the design process.
Creating better customer experiences and continually improving customer outcomes are also at the heart of industrial digital transformation. For manufacturers, digital capabilities can deliver key customer insights that open doors to new services.
Consider how heavy equipment maker CAT is actively pursuing an Industrial Internet of Things (IIoT) and analytics strategy by bringing boundary-crossing technologies to its product portfolio. This strategy positions digital technology as a key differentiator and source of data for the manufacturer’s customers to capitalize on.
Combined with augmented reality (AR) experiences to offer this new data, CAT’s service providers have gained a more profound understanding of critical product performance factors, making it easier to perform work efficiently and accurately. One customer saw a $200,000 labor cost savings when a project was completed two months ahead of schedule largely due to these technologies. Worldwide, CAT has already deployed over 400,000 smart connected products that help support more customer-centric solutions.
Importantly, improving customer intimacy through innovation helps build competitor-proof relationships.
Digital transformation also fosters new and enhanced products and services. At the design stage, industrial enterprises are benefiting from technologies that collect real-world product usage data. This requires a mix of fundamental and emerging technologies to capture the product’s past, current, and future state.
Obtaining this “digital definition” is made possible through IIoT-enabled product lifecycle management (PLM) applications and other sources of information. Connecting, managing, and analyzing a product’s operational status with IIoT platforms and using powerful simulation tools to predict outcomes are ushering in the digital twin―a digital virtual representation of each product’s designed, manufactured, and real-world state―that can reveal pivotal product value drivers, enabling deeper insights for companies to capitalize on.
The widespread adoption of digital twin technology is opening new use cases and related success stories centered around product innovation. Whirlpool Corporation, for instance, is driven to improve consumers’ home experiences by designing better, faster, easier appliances.
By leveraging PTC products to achieve its vision of reducing overall system and product complexity, Whirlpool is succeeding with DX technologies such as digital twin, AR, and data-driven design, effectively extending PLM across its enterprise and enabling cross-function collaboration through organization-wide data sharing. For the appliances maker, it is all aimed at bringing innovation to the market that consumers can see, touch, and feel.
An uncertain global trade landscape and rising material and labor costs are just a few of the many threats manufacturers are facing today. Add in the pressures created by a rapidly aging workforce, as well as new automation capabilities that are disrupting traditional competitive boundaries, and it is easy to see why industrial companies are turning to DX strategies to reduce business risk.
Digital transformation can help enterprises gain greater visibility into production and supply chain processes as logistics networks grow more complex, minimizing the potential for unpredictable market factors to negatively impact operations. DX can further unlock new means of acquiring and developing talent within the organization, where data drives people decisions that drive employee satisfaction and productivity.
Technologies that eliminate reworks, advance product quality, and improve critical processes are also of keen interest to corporations that must defend their position against existing competitors and disruptive “digital natives” that can operate more flexibly than older, established organizations. Furthermore, managing requirements in safety-critical industries can be supported by DX technologies that help manufacturers meet regulatory and compliance standards and improve workforce safety.
A digital transformation strategy can reinforce all sides of a business against attack―perhaps the greatest risk to industrial companies today is to delay immediate action.
Finally, digital transformation can accelerate new and enhanced business models and increase market demand by helping industrial companies tap into profitable revenue streams through product and service innovation. At the same time, companies can build their partner ecosystems and alliances that complement gaps in competency and open new customer markets.
Consider CAD software from PTC that comprises both the digital definition of a product and the physical experience of the asset in the field. This enables manufacturers to envision entirely new designs that better meet customer needs, as well as develop new business models to better market and sell those products to customers.
Digital transformation can also support future growth by meeting today’s technology-driven market demand for greater product and service customization. CAD innovation in a mass customization world means more and more products will be delivered on demand. As production shifts to one-at-a-time, DX technologies can allow endless variations of the product development process to greatly enhance a company’s IP portfolio.
PTC has seen many of the world’s leading industrial companies embrace digital transformation in response to unpredictable market dynamics and seismic shifts in the labor force. For manufacturers, emerging technology evaluation, experimentation, and implementation must become ongoing strategic priorities. Those who embrace the journey will create efficiencies through design and manufacturing optimization, adoption of more flexible and agile methodologies across their value chain, as well as shifting roles to attract and cultivate digitally native talent that can help companies thrive where IT and OT converge.
Stacy Thompson Stacy Thompson serves as Senior Manager of Corporate Content Marketing at PTC. She has more than a decade of experience in content, SEO, and social media development, B2B and B2C communications, demand generation campaigns, and analytics/content measurement. She is also a Professor of Content Strategy in Kent State University’s User Experience Design Master’s program.
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