Accelerating Digital Transformation Across Manufacturing and Operations

Author photo: Janice Abel
By Janice Abel


The pandemic has proven to be the biggest challenge and accelerator for smart manufacturing and the digital transformation of industry. Many manufacturers have accelerated their digital transformation journey by deploying new technologies, such as AI tools, edge, data lakes, new connectivity standards, advanced analytics, and robotics. However, digital transformation goes beyond tools and technologies, it includes people, processes, and things. Additionally, manufacturers from different industries are leveraging the information and data from a wide range of manufacturing processes to structure new business models that improve operational efficiencies and lower costs.

Digital transformation is the transformation of business, industrial products, operations, value chains and services that are enabled through the augmentation of people, knowledge, and workplaces through the expanded use of digital technologies. It's about the people in the workplaces, the processes, the technologies, and services. Ultimately, it’s about bringing value to the organization and solving business problems. Digital transformation is transforming plants into more autonomous plants with very few people required on-site. In some industries there will always be people on-site while in others the factory will be run completely autonomously, depending on the industry, company, process, products, and a host of other variables; but the future lies in autonomous and optimized plants. Digital transformation includes the ability to use the knowledge and experience gained from subject matter experts (SMEs) – the operators, engineers and other workers combined with data scientists and business managers’ expertise regarding the data and business. Digital transformation is also about the people, the culture, and the processes. It’s about taking newer disruptive technologies and integrating them or even replacing aging systems and business models and older work processes with connected systems, connected data, connected operations, and connected supply chains in a connected enterprise.

Where Are You on the Digital Transformation Journey?

Over the past year, ARC Advisory Group did a survey about where manufacturers were on their digital transformation journey regarding deployment of MES/MOM technology. The survey began at the ARC Industry Forum in 2020 and followed up with

The survey revealed that most manufacturers are deploying MES across plants and starting to connect data silos and plants. Survey participants indicated that the plant has some MES functionality, some visualization, and some integrated data across plants, but data silos still remain. ARC also asked about their best production plant and found that most participants said they were proficient (using MES that was connected and interoperable with newer technologies, such as analytics, MI, AI, robotics, virtual reality (VR), augmented reality (AR), digital twins, etc.). Ten percent of the participants indicated that they were “Best in Class” in terms of their production plant and achieved enterprise wide MES capabilities including autonomous and optimized operations. One manufacturer told ARC Advisory Group that as their digital transformation journey had begun before the pandemic, it was easy for them to scale up when the pandemic struck. Twenty eight percent indicated that in their worst production plant they were not doing anything. Companies that have not started their digital transformation journey in all or some of their plants are not alone, but it’s important to get started on this journey because there are a lot of benefits on the digital transformation journey that increase the company’s profitability and competitiveness.

MES and Cloud Deployments

Because cloud deployments play an important role in digital transformation, the survey asked about MES/MOM production deployment by application, specifically if the applications were being deployed on-premises, in private clouds, in public clouds, or in both public and private clouds. What we found in terms of some of the more common MES/MOM applications is that companies are starting to move applications to the cloud. The most commonly deployed applications in the cloud were advanced applications, performance management/KPIs, and visualization. Although cloud deployment is increasing, on-premises is still the most prevalent for applications as shown in light blue. Companies are moving such applications to the cloud for which they do not need the information immediately. This corroborates other ARC research, where we are seeing a movement of data to the cloud. And we believe that cloud adoption for MES/MOM applications will accelerate due to COVID and the need for the remote connected worker to monitor plant data.

Accelerating Digital Transformation

Digital Technologies Being Adopted in Manufacturing

Our survey asked what new technologies are being adopted for the digital transformation and found that the top technologies being adopted include cloud computing, robotics, artificial intelligence/machine learning/advanced analytics, mobile computing, digital twins, and edge. ARC is seeing a lot of advanced analytics being embedded in some of the newer MES applications and rolled out across enterprises where a few years ago we were seeing pilots for proof-of-concept (POC). Ultimately, all the digital transformation revolves around the data and having the right data for the right person at the right time. The data and what you do with it to make sure it is valid, contextualized, accessible, scalable, and secure becomes more important than ever. And in most manufacturing plants the speed of the data is important and depending upon the process can vary from less than a millisecond to ten minutes for accessibility. Compounding this is the amount of data that is increasing exponentially. But the key to using the data is making sure it's in a standard format or a structure or model that you can understand and obtain actionable insights.


The digital transformation journey generates a lot of valuable data for industrial operations. Quantifiable improvements are visible in these areas:

  • Real-time decisions
  • Quality, energy usage, unplanned downtime
  • Productivity and efficiency
  • Enhancing worker responsiveness and experience

Based on ARC research and analysis, we recommend the following actions for owner-operators and other technology users:

  1. Invest in new operational transformative technologies
  2. Become smart and connected and invest in new data platforms and architecture for easier connectivity, data contextualization, accessibility, and scalability
  3. Ensure that the digital transformation encompasses and aligns with the corporate culture
  4. Measure the value of digital transformation, align with corporate goals and vision, and solve business problems


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Keywords: Digital Transformation, Manufacturing, Operations, Pandemic, Data, ARC Industry Forum, ARC Advisory Group.

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