Technology and digital transformation matters to Welsh manufacturing – and it’s easier than you think to get started.
The nature of the factory floor and supply chains continues to evolve, hailing a new era of efficiency and agility driven by automation, data analytics, and interconnected systems.
Innovative technologies have the potential to revolutionise every aspect of the value chain. From product design and production processes to sales, supply chain management and customer engagement, digital transformation is enabling manufacturers to drive improved productivity, innovation, sustainability, and skills development.
‘It doesn’t have to be expensive’
The possibilities are wide-ranging, according to Aris Syntetos, one of the manufacturing leads at Cardiff University’s Business School, which has recently established the Digital Transformation Innovation Institute.
“Digitalisation offers enormous potential for Welsh manufacturing, in terms of improving efficiencies, competitiveness, and the long-term viability of many manufacturing industries,” he says. “But digital transformation cannot be considered in isolation. It must form a coherent element of a manufacturer’s overall strategy.
“The rate of digitalisation – and indeed the very nature of digitalisation – varies tremendously between industries, and even for individual firms within each industry.”
Professor Keith Ridgway, Chair of Industry Wales and Senior Executive in Manufacturing at the University of Strathclyde, agrees that no one size fits all, dispelling the misconception that technology and digital transformation is inevitably very expensive. He advises manufacturers to “get their feet wet” with small changes.
“Digitalisation, data collection and data analysis provide a chance to improve the quality of your product and increase productivity,” he says. “A lot of people struggle with the idea of digitalisation, but some of the simpler measures are quite cheap – for example data collection on machine energy use and monitoring cooling and heating systems can yield good results for very little investment.
“Moving into fully integrated systems including solid modelling, 3D printing and robotics and linking these into the factory management systems can get expensive. If you’re taking your first steps, I’d suggest starting slowly with some of the cheaper measures and then building up.”
There are government moves to help businesses take some of these early steps. Industry Wales is taking the lead on promoting the Smart Manufacturing Data Hub (SMDH) to Welsh businesses. The initiative is partially-funded by the UK government to increase adoption of digital technologies to improve productivity. The SMDH programme offers financial and physical support to install digital sensors into factories, and once installed the programme helps businesses to capture the data.
Mike Gillard, also from Industry Wales, says: “The SMDH allows full access to the business performance profile for power control data including energy usage, WIP, movement of product, process control etc.
“Our aim is to build a business support framework through sharing information. This will give an insight against similar industry benchmarks and as data becomes available, we can advise on opportunities to improve business performance.”
It’s not just about your production either – technology can be used to reduce risk and build more resilient supply chains, says Philippa Glover, a member of the senior leadership team at Omron, a technology provider in industrial automation, healthcare and electronic components, who is also a Made Smarter Commissioner and sits on the board of Make UK and Innovate UK.
Technology is therefore recognised as crucial to individual manufacturers – and overall it’s hugely important to Wales.
The national picture
According to industry body Make UK, the UK is one of the world’s biggest manufacturing nations and the sector’s output is worth £183bn, £11.3bn of which is in Wales. Across the UK, wages in manufacturing are 12 per cent higher than the average across the economy. In Wales wages are 28 per cent higher than the average Welsh salary and the sector employs 147,000 people, representing around 9.7 per cent of Welsh employment.
A survey carried out by the Welsh government ahead of their refreshed Manufacturing Action Plan, released in May, found manufacturers face varied challenges. Seventy nine per cent said they had dealt with supply chain difficulties; 70 per cent felt they needed to upskill their workforce; 75 per cent said they’ve faced pressures caused by rising energy costs; 54 per cent said the impact of Brexit had a challenging impact on their business; and 88 per cent of manufacturers said they had faced difficulties recruiting staff.
The importance of these advances in tackling challenges and improving economic performance is recognised in Cardiff Bay and Westminster. The Welsh Government’s action plan comprises six priorities, including decarbonisation and strengthening collaboration between stakeholders to embrace technological change and deliver more commercial innovation at pace.
In 2022, the UK government’s digital strategy “for harnessing digital transformation and building a more inclusive, competitive and innovative digital economy” also discussed the importance of technology to manufacturing.
Jump-start productivity and innovation
If you want to remain competitive in a rapidly changing global market, embracing digital transformation is no longer a choice but a necessity. Putting to one side Prof Ridgway’s advice to tech-reluctant manufacturers to start small, what is the full potential of these technologies?
At the heart of the digital revolution in manufacturing lies a powerful combination of technologies such as the Internet of Things (IoT), artificial intelligence (AI), big data analytics, and cloud computing. There are many applications:
- Automating repetitive tasks, such as welding and painting, or scheduling and inventory management, can help plug labour shortages and free up employees to focus on more value-added activities.
- Using sensors to track materials through the production process can identify inefficiency so manufacturers can eliminate waste or unnecessary spend.
- Digitalisation provides the potential to produce custom-made products quickly and cheaply through 3D printing.
- Machine learning can be used to optimise production schedules, while augmented reality can be used to provide employees with real-time instructions and guidance.
Technology can also play a huge role in making operations more energy efficient – for example, variable-frequency drives can be used to control the speed of motors, which can help to reduce energy consumption. Digital technologies can also provide manufacturers with new ways to collect and process recycled materials and use more sustainable materials.
Delivering exceptional value
Implementing technological change is not without its challenges. Manufacturers need to upskill their workforce and be aware of the potential risks of digital transformation, such as breaches of cybersecurity and the need for operational technology (OT) security.
But ultimately, technology enables manufacturers to deliver exceptional value to customers in a competitive landscape. Embracing change (and making a start) is strategically essential.