Digital transformation in manufacturing: Parsec’s 2024 survey shows 76% of manufacturers taking action

Parsec Automation, a developer of manufacturing execution system (MES) TrakSYS, has released the first of its two 2024 State of Manufacturing Surveys. Part one encompasses North America, while part two (not yet released), will encompass Europe. The results show that 76 percent of manufacturers across North America and Europe have at least started implementing digital strategies.

Just over one-quarter (26 percent) say they have completed their digital transformation initiatives. Of those who have not begun, just three percent said they have no intentions of implementing a data-driven digital strategy at this time.  

 “Yes, we’ve reached a critical threshold, with the majority of North American and European manufacturers having started planning or building data-led processes and facilities; but it’s more complicated than that,” said Eddy Azad, founder and CEO of Parsec. “In complex manufacturing operations, overcoming one challenge tends to bring other obstacles to the forefront. Though we’re closer than ever before to making Industry 4.0 a reality, there’s still plenty more work to be done to ensure manufacturers are prepared for this kind of ongoing, foundational transformation – and whatever the market has in store.”    

Supply chain challenges

Navigating the supply chain remains “very” or “extremely” challenging for 70 percent of manufacturers in both regions due to economic downturns (38 percent) and lack of visibility into operations (37 percent). Still, 51 percent describe their supply chain operations as at least “somewhat” resilient. Respondents’ strategies for cultivating resilience are rooted in a move away from ultra-lean, just-in-time fulfillment: diversifying their suppliers (43 percent), strengthening partner relationships (44 percent), increasing inventory levels (40 percent), and implementing new technology (40 percent).   

Reshoring in North America 
Though North American manufacturers are more likely to have completed a re- or nearshoring initiative than their European counterparts – 12 percent vs. five percent respectively – they are less likely to initiate moves closer to home in the coming years. North American companies have cooled on the trend, with 47 percent saying they have no plans to re- or nearshore in the future (compared to 28 percent of companies in Europe). The top challenges dissuading manufacturers from reshoring run the gamut from facility availability (46 percent) to logistics (40 percent), labour costs (40 percent), and worker availability (39 percent).  

Labour challenges  
Navigating today’s labour market continues to strain manufacturers both in North America and Europe, with every respondent noting they face at least one workforce-related obstacle. Of the challenges cited, though, no single answer seems to be having a disproportionate impact. Finding qualified candidates was the most common answer (41 percent), followed by evolving technology (39 percent), wage competition (38 percent), and training/onboarding (38 percent).   

Moving forward with AI  
Manufacturers are all-in on AI, with 99 percent of North American respondents saying they are at least exploring potential use cases within their operations. More than one-quarter (28 percent) said their companies are not yet prepared to leverage the tool effectively. Confidence about preparation is higher in North America than in Europe, with 79 percent of respondents in the U.S. and Canada saying they feel their operations are at least somewhat prepared.  

Value of MES   
Despite the industry’s interest in using AI tools and data-based strategies to improve operations, a knowledge gap persists about the role of MES platforms in these efforts. Most manufacturers (82 percent) say their company adopted or upgraded an enterprise resource planner (ERP) over the past year, while just 42 percent say the same about MES. Nearly three-quarters (74 percent) of those using an ERP alone say using the former mitigates their need for the latter. However, respondents who use both unanimously agree that there are benefits to MES/ERP integration, including greater flexibility (46 percent), improved supply chain visibility (41 percent), better regulatory compliance (40 percent), and enhanced decision-making (39 percent).   

 “Data and connected tools alone don’t fix problems,” said Azad. “They help manufacturers identify and understand challenges so they can develop effective solutions. If the industry is to continue this forward momentum, manufacturers and their software partners will need to work in close collaboration to anticipate what’s next and prepare accordingly.”  

To read the full North American report, visit https://parsec-corp.com/2024-state-of-manufacturing-survey/.