The State of Digital Manufacturing: A Pulse Check on Industry Transformation

Introduction

There are a lot of buzzwords and vendor solutions when it comes to the manufacturing tech space, which is making it very hard for companies to navigate and know which ones will provide the biggest impact. From connected machines and devices to autonomous robots, AI, cloud computing, and more, there is a lot to investigate, and it can be overwhelming when mapping out the best path to take to tackle the business challenges today and account for the future. After multiple discussions with manufacturers at recent industry events, I was surprised to hear many asking, "How do we make the most of all these new technologies?" and "Where do we even begin?"
Let's take the Internet of Things (IoT) as one example. The market for IoT is expected to grow significantly, possibly reaching $454.9 billion by 2029, with an annual growth rate of 13.7%. And what about AI in manufacturing? That's growing even faster, with projections showing a 45.6% increase to around $20.8 billion by 2028. So, with numbers like these, it isn't a big surprise that companies are seriously considering and prioritizing digital transformation.

Manufacturers are having a hard time deciphering the best path. A lot of companies are still working with outdated legacy systems or managing existing processes with spreadsheets or paper. The shift to digitalization presents issues for many manufacturers due to the challenge of finding skilled workers who can help them navigate and make this shift. It's one thing to have the technology; it's another to get everyone on board and make it part of the everyday workflow and culture. Even those who have made progress know there's still a long way to go before fully unlocking what Industry 4.0 offers.

This blog delves into the state of digital manufacturing and what manufacturers can do to position themselves better to capitalize on these technological advancements. It will also highlight the evolving role of Manufacturing Execution and Operations solutions (MES/MOM) and why a contextualized digital thread is the foundational building block that is the backbone of your manufacturing operations, ensuring everything stays connected and organized. It's the groundwork for things like AI, which have become a major focus for many tech deployments and the future direction of manufacturing.

Digital Transformation: Benchmarking Your Journey

Digital transformation is a multilayered process that requires more than just implementing new technology—it involves aligning an organization's specific needs and business objectives with the right solutions at the right time. During a recent webinar, we held with ABI Research, the concept of a digital maturity model was presented to serve as a valuable benchmark for manufacturers to assess their progress and identify the most effective next steps for their digital evolution. The model has six distinct levels, from fully manual operations to highly automated, data-driven enterprises. Level 0 is characterized by entirely manual processes in the factory, and Level 5 is characterized by factories operating autonomously with minimal human intervention.

ABI Research shared that many manufacturers find themselves in an "in-between" state, sitting between Levels 2 and 3 on the maturity scale. Level 2, the "Modern Factory," is marked by manufacturers beginning to explore digital transformation, with limited automation and technology adoption constrained by outdated systems, time, and cost barriers. Level 3, "IT/OT Integration," marks a deeper integration between IT and OT systems, enabling real-time data flow and improved production adjustments. Even at Level 3, companies still struggle with scaling solutions and maintaining agility. At these stages, organizations recognize the need for digital transformation and may have begun pilot projects such as deploying MES on select production lines. However, scaling these initiatives across the enterprise usually becomes challenging. Barriers typically include:

• Legacy system investments.
• Complexity in scaling solutions.
• There is pressure to show a return on investment (ROI) quickly.

A clear transformation strategy with agreed-upon business objectives is crucial for maintaining focus and avoiding skewed spending. Without that strategy, manufacturers might think they have achieved readiness when all it has done is frustrate workers who see little impact from the new tools and doubt among executives questioning the ROI. Understanding a company's place in the maturity journey allows for a more targeted approach to technology adoption and implementation.

MES and MOM: The Foundation of Digital Manufacturing

Manufacturing execution systems (MES) and manufacturing operations management (MOM) solutions are critical to the success of digital transformation efforts. MES has long been a backbone for optimizing production processes, while MOM expands this functionality to broader management of manufacturing operations. Often MES & MOM are used interchangeably depending on the solution provider. MOM solutions usually include a broader, more holistic view of manufacturing operations, integrating multiple functional areas beyond production, including quality, maintenance, inventory, and performance management. Together, these systems form a foundation for scaling digital transformation initiatives across the enterprise.

Recent survey data from ABI Research indicates that MES and MOM remain a top priority for many manufacturers looking to initiate or advance their digital transformation efforts. This trend is very apparent with small and medium-sized manufacturers who see MES as the starting point for modernizing their operations. Small to mid-size companies are prioritizing the implementation of MES solutions because they can provide the structure that is needed to elevate quality, improve control and visibility, accurately track performance, and leverage advanced technologies like AI and IIoT.

However, MES is for more than just those new to digital transformation. Even large organizations with years of experience using MES solutions are recognizing the need for upgrades. Today's advanced manufacturing environments—characterized by high-mix, low-volume production—usually require more sophisticated capabilities than legacy systems can provide. To achieve the level of flexibility and agility needed for today's environment, many manufacturers are upgrading, replacing, or expanding their MES solution footprint to incorporate essential MOM functionalities to stay competitive.

Custom vs. Commercial vs. App-Based Solutions: Finding the Right Fit

One of the critical decisions manufacturers face when adopting MES is choosing between custom-built solutions and commercial off-the-shelf (COTS) options. Historically, manufacturers desired customized MES solutions to meet their specific needs. These solutions offered tailored functionality and user experiences, but they were expensive, difficult to maintain, not scalable, and needed more ongoing innovation to stay competitive. Recognizing these drawbacks, the industry began to shift toward commercial "off-the-shelf" (COTS) MES solutions. While most of these COTS solutions appeared to be more cost-effective and easier to maintain and scale, they typically lacked the robust features and ability to customize the solution. This trade-off limited the flexibility required for optimizing complex manufacturing processes. In response to that limit, the "app/toolkit-based" approach emerged, promising the best of both worlds: the customization capabilities of bespoke solutions at a low entry price. On the surface, this seems ideal, enabling manufacturers to create tailored applications without the complexity of traditional software development.

Despite its promises, the app/toolkit-based approach has reintroduced many of the problems associated with custom/bespoke solutions. While the app-based approach can work for simple, static processes, it falls short for most manufacturing environments that require dynamic tracking and adaptability for a multitude of reasons:

1. Disjointed Business Logic. In a toolkit or app-based approach, the business logic—the rules that govern how data is processed and how decisions are made—can be scattered across multiple apps. This disjointed approach leads to inconsistencies in how business rules are applied, creating operational inefficiencies and increasing the risk of errors.
2. Fragmented Data Models & Data Silos. Toolkit and app-based platforms often enable users to create custom applications with their own data models. While this flexibility can be appealing, it frequently results in fragmented and inconsistent data structures across different apps.
3. Scalability Issues. As manufacturing operations grow in complexity, the business logic must scale accordingly. Toolkit and app-based approaches often struggle to adapt to this increased complexity, requiring constant adjustments and reconfigurations. This not only consumes resources but also introduces risks as changes in one app could have unintended consequences in others.

So, what is the right fit?

The answer lies in adopting a commercial off-the-shelf (COTS) solution that offers extensive configurability, scalability, and robust data contextualization at its foundation, combining the best aspects of tailored solutions with the streamlined reliability of ready-made software. Unlike custom-built systems or fragmented app-based toolkits, a modern COTS MES/MOM platform provides the flexibility needed to adapt to changing workflows, built on top of a cohesive data framework that supports scalability and alignment across the entire manufacturing enterprise.

In today's production environments, configurable COTS solutions empower manufacturers to drive digital transformation initiatives, leverage advanced technologies like AI and IIoT, and quickly adapt to evolving operational demands—all without the downsides of the complexity associated with custom solutions or the fragmentation attributed to app-based approaches.

For manufacturers evaluating MES/MOM options, the right solution should balance the ability to tailor the solution with ease of maintenance while simultaneously avoiding the challenges of scalability and data inconsistency. A highly configurable, data-centric COTS solution enables manufacturers to future-proof their operations, driving efficiency and competitiveness in a rapidly advancing digital landscape.

The Digital Thread: The Backbone of Smart Manufacturing

A key element of modern digital manufacturing is the digital thread, which ties together data and information throughout a product's lifecycle—from design through production and beyond. The digital thread is more than a simple data flow; it is about providing context, which makes data actionable across departments and processes.
Many manufacturers assume that their machines and systems hold all the necessary data to drive decision-making. However, while machines can track their own operations, they often lack context about broader production environments. For example, a machine might know its output but may not be aware of upstream and downstream processes, or how design changes will impact overall production. A "true" digital thread addresses this gap by contextualizing data from machines, business systems, and human data inputs. The contextualization engine contextualizes the data for the product being built and the manufacturing processes used to build the product. This comprehensive contextualization enables manufacturers to gain real-time, comprehensive insights into their operations, facilitating improvements in productivity, quality, and efficiency. A true digital thread enables manufacturers to optimize current processes and better prepare for future technological advancements.

Empowering Frontline Workers with Low-Code/No-Code Solutions

The increasing popularity of "low-code/no-code" solutions is drastically changing the way manufacturers approach digital transformation. These capabilities enable users—regardless of technical expertise—to design, implement, and adjust process flows without the need for extensive coding knowledge if any at all. This is particularly valuable in manufacturing, where frontline workers often have a deep understanding of the operational processes they oversee.

Low-code/no-code solutions empower frontline workers to directly contribute to process improvements by using drag-and-drop interface power apps to create dashboards, design workflows, and generate meaningful and actionable reports. The democratization of these low-code/no-code abilities make it easier to quickly adapt to changing production needs.

Adaptability is a key advantage of low-code/no-code platforms. With customer demands and market conditions shifting rapidly, manufacturers need systems that can be adjusted quickly and efficiently. Low-code/no-code solutions allow manufacturers to reconfigure processes without the long delays and costs associated with traditional development cycles, ensuring that production lines can keep pace with market demands.

Scalable Solutions: MES/MOM for the Long Haul

As manufacturers scale their digital transformation efforts, choosing the right MES/MOM becomes even more critical. MES systems represent significant long-term investments and selecting a solution that can evolve within the organization is essential. Scalability is key, as production requirements can change over time—whether through increasing complexity, new product lines, or shifts in demand.

One important aspect of scalability is the ability to transfer production processes between facilities with ease. For example, a flexible MES solution enables manufacturers to shift production from one facility to another without starting from scratch. This capability is particularly valuable in today's market, where supply chain disruptions and logistical challenges require quick adaptations to production workflows.

Moreover, a scalable MES solution supports the integration of advanced technologies like AI and machine learning. As manufacturers gather more data from their operations, they need systems that can analyze this data in real-time and provide actionable insights. A scalable MES ensures that data is not only collected but also contextualized and integrated into a broader digital strategy, driving continuous improvement across the organization.

Conclusion: Building a Future-Proof Digital Manufacturing Strategy

Digital transformation is not an endpoint; it's a continuous journey that requires alignment between current capabilities and future aspirations. MES systems, digital threads, and low-code/no-code platforms are critical components of this journey, providing the foundation for success in the era of Industry 4.0.

Manufacturers must focus on more than just the immediate ROI of their digital investments. They need to prioritize scalability, adaptability, and integration with advanced technologies to ensure that their digital transformation efforts align with their long-term vision. Manufacturers can remain competitive and innovative in an ever-evolving market by choosing the right MES/MOM partner and building a comprehensive digital strategy.
Once again, it highlights the onus on MES/MOM vendors to educate their customers on the art of the possible and help manufacturers identify the solution to the pain point. Many manufacturers will likely be bombarded with mapping out digital transformation plans and assessing the right technology solutions. This bombardment can be overwhelming when you are trying to map the solution to complex on-the-floor challenges.

Manufacturers need to seek out MES vendors who can provide clear and straightforward messaging and are willing to go on the ground and show them where the solution can map to those pain points and have that back-and-forth conversation. It's not something that can just be deployed overnight. It's not just a solution that's sold and, "Have fun with that. We'll see you later." A deep relationship with the technology vendor and the manufacturer is required to leverage the solution.

Call to Action:

Ready to transform your manufacturing operations? Discover how FactoryLogix can help you future proof your production processes with real-time insights, seamless integration, and advanced digital capabilities. Start your journey toward a smarter, more agile manufacturing operation today.