How can manufacturers place innovation at the heart of transformation?Advanced Manufacturing RealizedTo build the right foundation for long-term growth, manufacturers must put innovation and digital strategies at the heart of transformation.Executive summary• Massive geopolitical, technological and cultural changes have prompted unprecedented shifts in industrial manufacturing.• As pressures mount to build smart products, digitize operations and exceed customer expectations, incremental approaches to change are falling short.• Manufacturers need to design a transformation that is innovative, agile, cross-functional, and scalable to realize tangible business value.Over the last several years, challenges related to geopolitics, technology, the pandemic and climate change have shaken the foundation of industrial manufacturing -- creating tectonic shifts in how manufacturers think, operate and deliver their products and services. The pressure to make products smart and connected, digitize the factory and operations, create more automated and reliable supply chains, and deliver on rising customer expectations presents significant opportunities to move toward radical growth. Yet many manufacturers’ current approaches – driven by siloed teams, functions rather than strategies, and static views of competitive and operational landscapes – present significant risks on the road to reinvention.Legacy manufacturers trying to speed ahead into the future of smart products, digital platforms and new service-oriented business models urgently need a better way forward. A hybrid, innovation-led approach that incubates future businesses while simultaneously optimizing today’s products and operations can provide practical, value-driven solutions in both the short and long term.How can manufacturers place innovation at the heart of transformation?02Disruptive forces shift operational prioritiesThe range of disruptive forces manufacturers are experiencing has implications across the entire enterprise. These forces include:• sector convergence• power shifts within value chains• evolving customer expectations• volatile macroeconomic environments• tougher workforce dynamics• sustainability pressures• transformative technologiesIn response, manufacturers are prioritizing digital transformation and innovation-related investments. According to the EY January 2023 CEO Outlook Pulse survey, virtually all (97%) of industrial manufacturing CEOs indicate that continuing digital and technology transformation to deliver growth and operational advantages is either a very or fairly important near-term priority, despite near-term economic uncertainty.Through these investments, manufacturers seek to revolutionize processes by implementing innovations such as digital twins, artificial intelligence and machine learning. At the same time, they are advancing product and service offerings across the value chain that are smart and con...
