There are massive differences in digital maturity and needs across companies and industries, according to ABI. An industry like automotive, which is going through tremendous change, has a unique opportunity to revampe operations by leveraging technology. PHOTO courtesy Novarc Technologies.
Digital transformation, innovation and adoption significantly accelerated last year, but there is still a long way to go, particularly in manufacturing.
This is according to a new report from global technology intelligence firm ABI Research. The global technology intelligence firm scores the manufacturing sector an average of 2.4 (on a scale of 0 to 5) for digital maturity on its Digital Transformation Index. Automotive, a key customer for manufacturing, 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. 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.”
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.
“Big Return on Investment (ROI) projects with undefined or lengthy periods of return simply do not cut it in the current macroeconomic environment,” says Martin. “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.”
These findings are from ABI Research’s Digital Factory Data market data report. This report is part of the company’s Industrial and Manufacturing Technologies research service, which includes research, data, and ABI Insights. Market Data spreadsheets are composed of deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight into where opportunities lie.