Digital technologies set to revolutionise manufacturing

July 18, 2018

Digital technologies are reshaping the manufacturing landscape, says a new report from Capgemini's Digital Transformation Institute.

According to the report, the global manufacturing industry could see up to $685bn in value-added revenue by 2020 through the development and sale of smart, connected devices.

But while the potential returns are significant, manufacturers that want to benefit will need to increase their digital capabilities and invest in digital continuity.

The research examines how manufacturers are balancing two priorities: using digital tech to get legacy products to market quicker, while investing in new smart products that allow them to derive revenues from services.

Capgemini notes that many firms have responded enthusiastically to new technologies and are already rebalancing their IT investments accordingly. Around 50% of manufacturers aim to spend more than €100m on Product Lifecycle Management (PLM) platforms and digital solutions in the next two years, while the proportion of IT budget earmarked for maintaining legacy systems has dropped significantly, from 76% in 2014 to 55% in 2017.

Yet few companies are making significant progress in transforming their approach to innovation and engineering. Among firms that are lagging behind, there is little data-sharing or digital continuity across the product lifecycle, they are not making adequate use of digital technologies, they are not making effective use of their partner ecosystem, and they lack employees with the new skills needed.

Companies that have successfully transformed engineering and product innovation, meanwhile, display a range of characteristics that represent best practices, Capgemini said: they have a concrete digital vision and roadmap, make better use of the partner ecosystem, invest more in digital technologies, recruit talent in digital skill-sets, and create a culture of experimentation and agility.

Jean-Pierre Petit, head of digital manufacturing at Capgemini, commented: "With the significant potential gains of smart, connected products and digital continuity predicted in the next two years, the requirement to invest in new technologies is too large for manufacturers to ignore. However, the road to getting there is a challenging one. Manufacturers must balance the priorities between sustaining their core businesses while investing in digital acceleration. They must make investments in digital skills, ecosystems, tools, roadmaps and new ways of working.

"It will be a lot of work, but for those that get it right there is a sustainable leadership to gain."

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