5 Digital transformation challenges for manufacturing SMEs and how to overcome them

06 Apr 2023

SMBs starting up in today’s digital era know the importance of technology. With competitive markets containing more businesses than ever, not having technology can put you at a significant disadvantage. 

But on the flip side, having access to digital tools levels the playing field by allowing innovative and hungry startups to compete with more established competitors. As technology becomes more accessible and affordable, the opportunity for SMBs to close the gap increases. 

Why are digital transformations so important for manufacturing SMBs?

The latest technologies are changing the game for smaller manufacturers, including robotic process automation, 3D printing, digital design, AI-driven tools and the ‘Internet of Things.’ With these tools at their fingertips, SMBs are starting out with the best chance of success. 

Digital transformation has been greatly welcomed in the manufacturing industry. When implemented correctly, technology has the power to help manufacturers: 

  • Streamline business processes. 
  • Optimise supply chains. 
  • Automate repetitive tasks. 
  • Provide real-time data analysis to monitor performance levels. 
  • Implement demand forecasting and spot customer behaviour patterns. 
  • And more. 

5 digital transformation challenges facing SMBs and how to tackle them

For all its good, digital transformation can come with challenges, especially when it’s being implemented on a larger scale across a manufacturing supply chain. Here are a handful of challenges small manufacturers face when taking on digital transformations.

The company has no real plan in place

As the saying goes, fail to prepare, prepare to fail. 

Having a plan is key to implementing digital transformation. Start with a list of software tools you’d like to implement. For each piece of software, detail what problems it will solve and what features it needs to have. Then compare these results to the wider objectives of the business. 

For example, let’s say a business implements a software tool to collect demand forecasts. With this data, they can optimise and schedule their manufacturing processes to avoid stock issues and decrease customer complaints. The business can then monitor the results to establish whether the technique is effective enough in relation to its overall objectives. 

Failing to plan precisely how you will use software and for what reason will make the adjustment to digital transformation less organised and effective. 

Besides the tech, businesses going through digital transformation also need to bring employees into their plans. Not all employees will welcome the changes, so it’s important to check in on them and see how you can help. When rolling out new software, make a plan that includes listening to employees and explaining the importance of going digital. It’ll make them feel more valued and help smooth the transition. 

Outdated tools

Spreadsheets were and still are, an effective way to collect numerical data and work out sums and formulas. But they’re not the best tools for creating living, breathing inventory systems.

Instead, there are more advanced systems that can automate aspects of the manufacturing process for you and collect key data at the same time. There’s a tool out there for most business needs, from inventory management and accounting software to design suites and eCommerce stores. 

Too often, businesses rely on the technologies of yesteryear while their competitors have moved on. In the manufacturing game, being stuck a few years behind doesn’t bode well. That’s why eliminating outdated tools and discovering the latest offerings should be key considerations moving forward. 

Your staff need training on new tools

When new digital ways of working are implemented, current or new staff will need training on new systems. 

Many software providers now include courses or free tutorial sections on their websites. These are good places to look when finding training for your employees and should be utilised as part of the new employee onboarding process. 

At Workhorse, we encourage each of our customers to nominate a Workhorse champion. That means one person will undergo an intensive onboarding process and then act as the in-house expert to teach new employees. This technique is a great way to optimise the onboarding process and ensure that knowledge is being shared by someone who knows the ins and outs of the new tech.

Failing a tech champion model, look for tech solutions with robust customer support that includes ways to talk to real people. Getting a walkthrough is always the best way to troubleshoot a new system — and that’s a lot harder to do if you’re stuck in chatbot hell!

Budget constraints

SMBs won’t necessarily have the budget to splash out on new technologies or upgrade existing ones. This can present a huge challenge when it comes to digital transformation, but managers need to look at the bigger picture to understand the benefits spending extra cash brings. 

Yes, the upfront costs can be expensive, but think about the potential cost to your businesses of getting left behind and having no technology at all. For everything you lack, there will be a competitor with better systems and ways of working, ready to take your customers away from you. That’s why investing in digital solutions is a must, even if it initially seems to break the bank. 

Look for providers that offer different pricing packages to better serve SMBs, so you don’t end up paying for more than you need.

A solid investment plan will be necessary to help manufacturers know how much budget they’ll need, what features the tech should have and how to measure the implementation results. 

No way to measure the results of your digital transformation

How will you know that your digital transformation has succeeded if you have no way to measure the results? 

One way to actively measure the results of your efforts is to implement a goal-setting framework like OKRs. The acronym stands for Objectives and Key Results. The Objectives tell the business where they need to go, while the Key Results are the outcomes required to achieve the objective. An OKR framework helps SMBs measure the results of their digital transformation efforts by giving them something to measure their results against.  

For example, your Objective could be: ‘We want to streamline our processes to save time and money and minimise the impact of the skills gap.’

Your Key Results would then be: ‘Faster process times, less money spent, and less reliance on skilled workers to do everything.’ 

Failing to have a framework like this in place to measure your results is going to make the digital transition less organised and effective. 

Workhorse can help your digital transformation efforts

Workhorse helps companies embrace digital transformation by providing configurable solutions tailored to your needs. Our order and inventory management software helps streamline business performance, helping you to increase productivity and performance across your whole organisation. 

If you want to know more about how Workhorse can help your business, book a demo today!

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