UK Manufacturers expect digital to fundamentally change the sector within five years

Today Fujitsu has released research which revealed the UK manufacturing sector is confident it can thrive in a digital world, albeit with dramatic change and innovation.

It is clear digital is already making an impression on the manufacturing sector. Nine in ten (90%) of manufacturing professionals surveyed in Fujitsu’s Fit For Digital study reported the sector has already been impacted by digital disruption, and 95% expect it to be further impacted in the future. Looking at their own organisation, 95% admitted theirs needed to evolve in order to thrive and 90% believe the industry will fundamentally change by 2021.

When considering the main effects of digital disruption, there was a strong consensus that it increases competition and enables new entrants in the sector (50%). Manufacturers also highlight that it creates a faster pace of change (48%) and fosters more innovation (38%) and market growth (38%).

Commenting on the findings, Graeme Wright, CTO for Manufacturing, Utilities, and Services, UK and Ireland at Fujitsu said: “For manufacturers, digital disruption is as much about the transformation of business processes as it is business models and revenue streams. Whilst disruption has been seen in other areas such as retail for years, the consequences are only just hitting manufacturing – evident with the emergence of new business models. For instance, Rolls Royce now sells ‘power by the hour’, rather than the engine itself, and Tesla’s end to end business model which encompasses solar, storage, transport and charging point has revolutionised the automotive industry. Not only do these new models provide the opportunity to increase revenue, they also ensure the entire service a customer needs (such as maintenance, spares, expertise) is delivered at once, and we expect this trend to continue.”

Interestingly, 47% of the industry stated it is their CIO who is internally driving the response to the challenge of digital disruption, which is at odds with respondents in retail, financial services and public sector, which all believe the charge is being led by their CEO or combined leadership team.

In order to thrive, the sector believes in the power of collaboration and co-creation; almost half (48%) said they would feel more confident in their organisations’ ability to embrace digitalisation if they had the right technology partners to shape their approach. Two thirds (67%) feel the need to collaborate with technology experts will be vital for their success.

Wright remarks: “It is somewhat disappointing that only CIOs have digitalisation on their agenda, whereas the responsibility in other industries lies with the CEO or the board collectively. However, this may be down to the nature of the business. Whilst industries such as financial services have always dealt with information and data, manufacturing deals with physical things and assets, so have a different set of challenges to tackle. The next stage for manufacturers will be finding the right partner which has the ability to help them fulfil their transformation vision.”