Digital transformation innovation and adoption significantly accelerated in 2022, but there is still a long way to go. According to ABI Research’s Digital Transformation Index, on a scale of 0 to 5, the manufacturing sector scored an average of 2.4 for digital maturity
Automotive took the lead with an index of 3.7, followed by Electronics/High Tech at 3.3.
“There are massive differences in digital maturity and needs across companies and industries,” explains industrial & manufacturing research director Ryan Martin.
“An industry like automotive is going through tremendous change in the shift to electric and autonomous vehicles that presents a unique opportunity for companies like Ford, GM, and Hyundai to completely revamp operations as new cohorts of suppliers join rising OEMs other than Tesla, including Rivian, Polestar, and Fisker.”Ryan Martin
He opines that the manufacturing requirements for these companies is unique compared to precision agriculture companies John Deere, AGCO, and Caterpillar; pharmaceuticals made by J&J, Pfizer, and Merck; and fast-moving consumer goods from the likes of Unilever and P&G.
“Some of these companies are still transitioning from paper lists to digital work orders while others are formulating strategies and use cases for the industrial metaverse,” he continues.
About the Digital Transformation Index
The ABI Research Digital Transformation Index measures and benchmarks digital maturity along the lines of seven key criteria, including robotics, manufacturing process, software, control, data management and analytics, connectivity, and worker enablement. The scale ranges from level 0 (human controlled) to level 5, lights out manufacturing.
An increasing number of examples stand out in terms of next-level digital integration and autonomy, including Mercedes’ Factory 56 facility in Sindelfingen, Germany, and the new Tesla Gigafactory in Berlin; however, these remain outliers that others hope to emulate.
Most facilities are brownfield environments that need to retrofit sensors and manage the machines they have relied on for years. The accelerant in the mix is a new and growing cohort of industrial cloud software offerings ranging from CAD and PLM to MES and plant-scale Simulation that are becoming increasingly attractive to manufacturers of all sizes and industries, albeit varying degrees, and with varying rates of adoption.
Martin observes that big Return on Investment (ROI) projects with undefined or lengthy periods of return simply does not cut it in the current macroeconomic environment.
“Manufacturers need to improve or maintain the current order of business through quick wins that solve immediate challenges and pain points. At the same time, suppliers want to ensure they deliver that same value to the customer. Level 5 lights out manufacturing at scale is still a way out,” he concludes.