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Complacent about digital transformation
Published:  04 October, 2021
Manufacturers too complacent about digital transformation, new report warns

New research has revealed that the manufacturing industry is dangerously underestimating the role that technology will play in building a sustainable operation that can thrive in the face of future pandemics, the climate crisis, and economic and political instability.

Despite major disruption over the past year and a half, only 49% of manufacturers think that Brexit and Covid-19 have made technology more essential to success, according to the Connected Enterprise report, produced by digital transformation specialist Nexer in partnership with applied futurist Tom Cheesewright (pictured).

The report also reveals that only a third (34%) of manufacturers believe that they will have to implement more technology over the next five years in order to remain competitive, and another 34% believe that changes in customer demands/expectations will make technology more crucial. Worryingly, 15% feel that the technology they currently use will remain sufficient for the foreseeable future.

For the report, Tom Cheesewright conducted in-depth analysis establishing how key global pressure points, including the climate crisis and economic recovery, as well as changing customer behaviour, will impact the manufacturing industry in the coming years.

Predicting that the next few years will be characterised by the need for rapid adaptation, as supply chains are disrupted by shifts in stability, climate, tariffs, taxes and legistlation, Tom said: “Clear insight up and down the supply chain will be critical in allowing manufacturers to operate in a lean fashion, with investment required in technologies to manage stock and communicate with customers and suppliers.

“These technologies will also be essential in improving the transparency of the supply chain for planning, audit and sustainability purposes.”

Colin Crow, managing director at Nexer, added: “Tom’s analysis rightly emphasises the importance of supply chain visibility. In order to achieve this, the manufacturing industry will need to rapidly increase its adoption of ERP solutions.”

According to the research, adoption of ERP solutions amongst manufacturers currently sits at just 39%. Only 15% of those surveyed said that they plan to introduce the technology, leaving almost half still not intending to have an ERP solution in use in the next five years.

Colin continued: “It’s also clear that inventory management technology and CRM software will play a key role in managing stock and communicating with customers in a sufficiently agile and responsive way.”

The research found that 39% of manufacturers are currently using inventory management software, and 34% have a CRM platform. Reassuringly, another 34% said they plan to implement inventory management technology, and 24% are keen to start using CRM software, suggesting that there are positive steps being taken in the right direction in some areas.

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