Semiconductors, electronics and pharmaceuticals lead digital transformation in manufacturing

A new report launched February 10 by the World Economic Forum reveals that the semiconductors, electronics and pharmaceuticals sectors are leading the way in the digital transformation of manufacturing.

In collaboration with the Singapore Economic Development Board (EDB), the Manufacturing Transformation Insights Report 2022 draws on data from close to 600 manufacturing companies in 30 countries that underwent the Official SIRI Assessment (OSA): a two-day independent review of a factory or plant. 

Key findings

  • Semiconductors, Electronics and Pharmaceuticals lead the 2022 Maturity rankings, with Logistics making gains

Despite their frontrunning positions, these top three industries are not shielded from present-day challenges like the ongoing value-chain disruptions, global chip shortage and industrial decarbonization. These developments will reshape the global manufacturing landscape and companies from these leading sectors – as long-standing pioneers of innovation and adopters of new concepts and technologies – must confront these topics proactively to redefine them into opportunities for all.

  • A high level of diversity exists across various industry sectors; more tailored approaches are required to better support industry transformation

Governments and solution providers tend to apply “one-size-fits-all” approaches in supporting manufacturers on their digitalization journeys, such as state-level subsidies for the adoption of new automation equipment or industry-led forums that study use cases of global companies. The impact and efficacy of such blanket interventions has been limited.

  • The most digitally mature companies are seeking to integrate their already digitized processes and systems, while the average manufacturer is still looking to digitize existing operational processes

New digital and hardware technologies, coupled with integrative design principles, have opened a world of possibilities for manufacturers. Over the past two years, most manufacturers have taken first steps towards digitalization in response to pandemic-related challenges. Companies which have started earlier are now progressing to the next level of integrating their digitized processes. 

  • Top companies have focused significantly on connectivity to enable greater integration and insights

In today’s digital economy, connectivity is fast joining automation as a key driver of success. Top companies acknowledge the importance of connectivity. Many have already established interoperable and secure networks within their production sites, where equipment, machinery and computer-based systems can interact and exchange information with few restrictions.

  • Manufacturers should put more emphasis in refreshing and broadening their strategies for digitalization and workforce retraining

With the advent of digitalization, job scopes and work arrangements are evolving rapidly. As manufacturers formalize their digitalization strategies to upgrade their manufacturing and enterprise processes, there is a need to also re-examine the way they organize their workforce and workspaces as remote working becomes more prevalent in the digital era.

  • Productivity- and quality-linked KPIs are key focus areas of MNCs and SMEs, but flexibility and speed are fast-emerging areas of priority

Exponential demand growth, changing consumer patterns and chronic supply-chain disruptions during the pandemic have prompted some groups of companies to shift their focus to flexibility and speed-related KPIs to strengthen adaptability and resiliency. Initiatives that demonstrate such shifts include efforts by manufacturers to reorganize their supply chains based on regional geographical markets, practicing dual/triple sourcing and adopting hybrid inventory management models that include elements of both “just-in-time” and “just-in-case” strategies.

  • Data confirms SME-dominated sectors are less mature than MNC-dominated sectors

Exponential demand growth, changing consumer patterns and chronic supply-chain disruptions during the pandemic have prompted some groups of companies to shift their focus to flexibility and speed-related KPIs to strengthen adaptability and resiliency. Initiatives that demonstrate such shifts include efforts by manufacturers to reorganize their supply chains based on regional geographical markets, practicing dual/triple sourcing and adopting hybrid inventory management models that include elements of both “just-in-time” and “just-in-case” strategies. 

  • MNCs and companies ahead of the maturity curve are more likely to plan for the long term

To support the international scale-up of SIRI, a new non-governmental, not-for-profit organization – International Centre for Industrial Transformation (INCIT) – has also been established. As a neutral, independent entity, INCIT will work with both the public and private sector manufacturing-related organizations to catalyze and support industrial transformation across geographies and industries.

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