A compass that guides executives in the manufacturing industry
Digitalization in manufacturing is no longer an option, but a necessity. Companies using digital technologies systematically increase their efficiency, reduce costs, and ensure their competitivity through improved machine utilization, optimized production planning, or less downtimes. Industry surveys such as the Deloitte Smart Manufacturing Survey 2025 come to the result that productivity and performance are typically increased by 10 to 20% thanks to smart manufacturing measures.
At the same time, many companies do not know which direction to take on their way to the Smart Factory. Technologies, abbreviations, buzzwords — it’s a real jungle. They know that they must get started, but do not know where to begin. The following 7-step plan offers executives orientation and a clear approach.
Step 1: Raising awareness, defining vision and goals
Digitalization is not a technical, but a strategic decision. Companies must set clear goals: Is their main objective to reduce costs, optimize processes, or increase flexibility? A clear vision helps employees understand why digital transformation is necessary and which added value it offers in the long term.
- Define goals: Do you want to reduce costs, streamline processes, or increase flexibility?
- Develop a vision: Digitalization must be embedded in the corporate strategy and show how it contributes to future viability.
- Communication: Employees at all levels should understand why change is necessary and how it strengthens the company in the long term.
If you know “why”, motivation and acceptance are much easier to achieve.
Step 2: As-is analysis — status quo in the company
A well-founded analysis of the current situation is the basis for any digitalization strategy and creates transparency. Only if you know exactly where you are starting from can you set the right priorities and head to where you want to get to in the digitalization jungle.
The following issues need to be clarified:
- Processes: Which processes run smoothly, and where are bottlenecks or unnecessary manual effort?
- Technologies: Which systems are available, how well are they integrated, where are gaps or redundancies?
- Data quality: Is the data complete, reliable, and accessible, or do data silos exist?
Step 3: Choosing the technology
Systems such as a Manufacturing Execution System (MES), an Advanced Planning and Scheduling System (APS), or automation technology play a central role in manufacturing. Machine data collection (MDC), ERP systems, and integrated platforms are key to controlling processes efficiently. The solution should not only meet the current requirements but be future-proof: a flexible system that will be able to fulfill future requirements. It is therefore not only the mere functionality that counts but much more the ability to seamlessly connect different systems.
Selecting the right solution is decisive for success.
- MES and APS: For transparency in production and efficiency in planning.
- ERP systems: For the integration of production and enterprise management.
- Automation & data collection: To reduce manual tasks and make data available in real time.
Sustainability: Opt for modular platforms that can grow with your requirements.
Step 4: Launching a pilot project — testing and learning
A pilot project is the best way to begin the digital transformation. It should be manageable but still provide measurable added value for production. An iterative approach helps to make quick adjustments and learn from successes and mistakes. A pilot project also offers the opportunity to familiarize employees with the new technologies at an early stage.
The entire complexity of the digitalization process is reduced with this first step.
- Selection: Start with a manageable but relevant project with measurable benefits.
- Iterative approach: Small, quickly visible successes are motivating and encourage learning.
- Employee participation: Use the pilot project to actively involve teams and gain experience with new technologies.
Step 5: Change management — getting employees on board
A highly performant technology is not enough, people are still decisive for success. Targeted training and continuous professional development are needed to overcome fears and create acceptance. At the same time, digitalization is also changing corporate culture: managers must actively lead by example, promote open communication, and take concerns seriously. Change will only be successful in the long run if people support it.
You can buy technology, but not acceptance.
- Training: Train employees early on to overcome people’s fears.
- Cultural change: Digitalization changes mindsets. Managers must lead the way and actively support change.
- Dialog: Ensure an open communication culture where feedback is valued.
Step 6: Scaling and optimizing — expansion step by step
After the pilot project, the successes are scaled. Further production areas are integrated step by step. With the help of continuous data collection, processes are constantly optimized, inefficient workflows eliminated, and automation expanded. In this way, the company gradually grows into a networked and highly flexible production.
After the pilot project, larger areas of the company are integrated.
- Scaling: Step by step, successful approaches are transferred to other production lines or sites.
- Data-based optimization: Continuous evaluation of process data uncovers inefficiencies and enables ongoing improvements.
- Expand automation: Where processes are standardized and repetitive, automation can significantly boost productivity.
Step 7: Monitoring and Continuous Improvement Process (CIP)
Implementing digital processes is not the end of the story. It is decisive to permanently monitor their performance. Real-time data and defined KPIs such as OEE (Overall Equipment Effectiveness), lead time or scrap rate provide information about efficiency and profitability. Digitalization is a continuous improvement process that must constantly be adjusted and extended.
Digitalization is not a project with a deadline, but an ongoing process.
- Define KPIs: Important KPIs can be the OEE (Overall Equipment Effectiveness), lead times, downtimes, or scrap rates.
- Real-time transparency: Dashboards and monitoring systems provide an overview of production at all times.
- Establish CIP: Every new technology has the potential for further optimization. Digitalization means continuous learning and adjustment.
The road to success
Finding the way through the digitalization jungle is challenging, but it is possible with a clear plan. Digitalization is not an end, but rather a long-term process that makes companies competitive and ready to face future challenges. The 7-step plan offers executives hands-on guidance and tips on how to successfully shape the change from start to finish, from the idea to implementation.