Digital Transformation Trends in the Manufacturing Industry
According to Mr. Vu Kiem Van, Vice Chairman and Secretary General of the Vietnam Digital Communications Association, digital transformation is a central development strategy of the Government. [1] This includes strong efforts in innovation, improving product quality, and integrating modern technologies into production. It’s evident that digitizing business operations is an essential trend, providing sustainable competitive advantages for enterprises. To stay updated on the digital transformation trends in the manufacturing industry for 2023, let’s explore the information in the following article by RX Tradex.
1. What is Digital Transformation in Manufacturing?
Digital transformation in manufacturing refers to when an organization begins to implement advanced digital technologies to improve the entire or specific parts of the production process. Nowadays, digital technology has infiltrated nearly every industry and aspect of human life. Therefore, if businesses don’t adapt and change their production activities in a timely manner, they will face numerous challenges such as low productivity, poor product quality, uncompetitive prices, and declining revenues.
2. Benefits of Digital Transformation for the Manufacturing Industry
Embracing digital transformation at an early stage will pose challenges for many enterprises across three dimensions: people, technology, and business. These difficulties can stem from the need to learn and improve various high-level technical software and technologies, operational methods, efficient production lines, and intelligent factories. However, if adjusted in a timely and appropriate manner, enterprises can reap several benefits:
- Improved product quality by using technologies that ensure accuracy and simulate objects before they become finished products; or assembling products using modern methods, carrying them out quickly, reducing errors, helping save time, and effort in adjustments, and minimizing raw material wastage.
- Enhanced work processes and rapid data processing using machinery, leading to increased productivity, improved efficiency, reduced input costs, fewer laborers, higher revenue, and profit.
- Safer working environments due to smart sensor devices and timely alerts, preventing risks for laborers.
- Flexibility in operation and timely problem-solving with real-time systems that update information anytime, anywhere. This reduces human downtime, fosters dynamic and efficient work environments.
3. Top 5 Leading Digital Transformation Trends in the Manufacturing Industry for 2023
3.1. Industrial IoT Sensors
IoT, the Internet of Things, is a network of interconnected sensors and electronic devices that gather and exchange information. These sensors are often used to measure and monitor industrial production processes. Currently, many businesses are beginning to implement IoT systems within their factories to optimize manufacturing operations.
Industrial IoT is significantly transforming the manufacturing sector, changing how products are created and distributed. In fact, about 63% of manufacturers believe that implementing IoT will increase profits in the next 5 years. [2]
Popular applications of industrial IoT sensors include:
- Measuring environmental conditions such as humidity, temperature, and oxygen levels in specific areas.
- Sensors measuring changes in air pressure around equipment.
- Monitoring factory and equipment operations.
- Inventory management.
- Tracking energy consumption.
3.2. 3D Printing
3D printing has been one of the most revolutionary digital transformation technologies in manufacturing businesses in recent years. It involves using laser beams to layer materials together, creating objects from digital technical data. Currently, 3D printing technology is primarily used in creating prototypes and product models. This allows businesses to identify and rectify errors before mass production. In practice, these innovations help reduce nearly half of the costs while doubling the efficiency.
Common applications of 3D printing include:
- Aerospace industry.
- Automotive production.
- Medical and dental fields.
- Architecture and construction.
- Hearing aid devices.
3.3. Artificial Intelligence (AI), Automation, and Machine Learning (ML)
Automation has undergone a long period of formation and strong development, appearing in various fields and helping businesses reduce repetitive tasks. Meanwhile, machine learning analyzes vast amounts of customer data through algorithms and statistical models. The advancements in these two technologies combined with AI make operations in manufacturing smarter, safer, and more efficient. For instance, processing vast amounts of customer information to obtain necessary data ensures that customers receive the right products, even predicting what products they’ll be interested in purchasing next time. The synergy of these three technologies accelerates production line speed, cuts costs, maintains quality control, and efficiently identifies market trends.
Common applications of AI, automation, and machine learning include:
- Virtual assistants (Virtual agents).
- Biometrics.
- Voice recognition.
- Medical field – cancer cell detection.
- Identifying hazardous incidents in production.
3.4. Cloud-Based ERP and Other Production Software
ERP, Enterprise Resource Planning, is understood as the enterprise’s resource planning system. Cloud-based ERP and other production software are applications that provide tools for managing all business activities within an organization or enterprise. This combined system can securely store data in the cloud, allowing employees to access information from anywhere and collaborate on projects even when not present at the workplace. This helps employees reduce paperwork and focus on creating or improving higher-quality products.
Manufacturers can also track real-time inventory and timely update stock status. Especially, cloud-based ERP is efficiently applied to resolve peak periods, where the number of visits to the company website increases dramatically. This helps businesses resolve tasks more quickly compared to traditional methods.
Common applications of cloud-based ERP and software include:
- Inventory management.
- Customer interaction.
- Email services.
- Online banking.
- Data backup and recovery.
3.5. 5G and Smart Factories
There are numerous technologies applied in smart factories, such as Artificial Intelligence (AI), 5G, 3D printing, Collaborate robots (Cobots), Cloud computing, etc. Among these, 5G is the fastest and most reliable mobile network, enabling Vietnam to further develop in its journey of digital transformation in the manufacturing industry. The combination of AI and 5G enables real-time data transmission at high speeds and low latency, necessary for quickly and efficiently transmitting vast amounts of data.
Ericsson’s 5G smart factory in Texas recorded a significant labor productivity increase of 2.2 times compared to a similar factory not employing automation and advanced Industry 4.0 technologies. [3] Additionally, these solutions help reduce costs, minimize the workforce, improve operation time, and enhance product quality.
Common applications of 5G and smart factories include:
- Automated robots.
- Self-driving vehicles.
- IoT support.
- AI support.
4. Conclusion
Digital transformation trends in the manufacturing industry have, are, and will continue to drive stronger development for enterprises that grasp, anticipate challenges, and adapt to changes in today’s industrial and modernization context. The effectiveness of this application process will significantly impact enterprises, helping reduce raw material input costs, labor rent, production risks, increasing labor productivity, and improving product quality. The most advanced production technologies will be featured at the top four International Exhibitions organized by RX Tradex Vietnam in 2023, including NEPCON Vietnam, METALEX Vietnam, Vietnam Manufacturing Expo, and Waste and Recycling Vietnam. These exhibitions offer opportunities for Vietnamese enterprises to capture new trends in digital transformation in both domestic and global manufacturing industries.
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[1]: Barriers hindering digital transformation.
