Advanced technologies are crucial for staying competitive in an industry heavily affected by supply chain disruptions and the accelerating pace of innovation. PwC's 2023 Market Winners Survey highlights the imperative for reinvention in the industrial manufacturing sector, clearly showing how leaders in the market are embracing digital transformation, adopting smart factory capabilities, and enhancing cybersecurity to safeguard operations.
The Industrial Manufacturing industry in Switzerland is in a state of upheaval as the impact of new technologies, geopolitical uncertainty, and ongoing supply chain disruptions impact the market. In response, companies are prioritising investments into customer-centric transformation initiatives that enhance the capabilities of leading Industrial Manufacturing companies.
To better understand what sets the customer transformation efforts of companies in the Industrial Manufacturing industries apart from their peers, PwC recently undertook the Market Winners' Survey 3.0. The survey aimed to uncover the key statistical differences between how market winners, laggards and those in-between approach customer-centric transformation initiatives and how they achieve outcomes of differing quality and business impact.
The findings point to a growing need for effective customer transformation to enable Industrial Manufacturing companies to meet customer needs and requirements, accelerate growth, fast-track innovation and ease the adoption of transformative new technologies. In fact, leaders in the industry are adopting a wide range of digital technologies to improve their flexibility and resilience while driving down operational costs. A key insight into the sector is the accelerating adoption of digital transformation to build smart factory capabilities, along with the growing need for more robust cybersecurity to safeguard factory-floor operations and connected devices.
Key insight 1 Acceleration in digital transformation is changing the industry landscape
Customer-centric business transformation has emerged as one of the key differentiators for leading manufacturers. PwC's Digital Factory Transformation Survey 2022 reported a 67% increase in the number of companies saying that resilience and flexibility are key drivers of their digital transformation investments. In fact, global digital factory investments are expected to reach US$1.1tn per year as the nearly two-thirds (64%) of companies that are still at an early stage of their digital transformation shift focus to building new technology-enabled capabilities.
Generative artificial intelligence (GenAI) is also shaking up the sector, with business leaders currently exploring how GenAI will disrupt their business, support employees, increase competition and create new risks. The MWS 3.0 findings support this: 52% of respondents to MWS 3.0 are already using GenAI, with market winners far more likely to believe that GenAI will significantly disrupt their operating models in the next five years. Moreover, the numbers clearly show the impact of AI on the Industrial Manufacturing industry. AI has the potential to increase the performance of a company by up to 40%. However, on average only 14% of that additional potential are currently exploited using AI, leaving a lot of room for improvement.
This raises a vital point: do organisations truly understand the needs of their customers and how technologies such as AI can deliver to those needs? Critically, do companies have the requisite infrastructure to successfully implement such technologies?
Whatever the answer, one thing is certain: By using AI, Gen AI, and other emerging technologies, organisations can successfully square the circle of becoming more customer-centric and at the same time increase sales and marketing effectiveness and efficiency. The question is not if organisations should invest in these technologies but when. And even the answer to this question is clear if companies want to tap into the first mover advantage: now!
Key insight 2 Protect digital advances with more robust cybersecurity
The Industrial Manufacturing sector is a prime target for cyberattacks. Weak cyber defenses are cited as a major risk to the sector, with only 60% of manufacturers saying they are "very prepared" for a cybersecurity incident, and just over half (55%) saying they're "very prepared" for a data breach. Another study found that ransomware targeting industrial environments nearly doubled in 2022, with seven in ten attacks aimed at manufacturers.
However, the MWS 3.0 found that market winners have de-emphasized cybersecurity concerns. This is not because leading companies underestimate the extent of the cyber threats facing their operations, but rather that market winners have already concluded significant investments in cybersecurity. This contrasts with the previous Market Winners' Survey, where cybersecurity was identified as one of the three foundational pillars of successful modern businesses. In addition, in contrast to the current opinion moving to the Cloud significantly lowers the risk of cyberattacks as the big hyperscalers such as AWS, Google, or Microsoft a proactively taking measures to protect their customers’ data. However, Switzerland’s Industrial Manufacturing is still way behind the curve with regards to moving to the Cloud and adoption of Cloud services.
Faced with an uncertain operating environment and continued supply chain disruptions, the Industrial Manufacturing sector is primed for technology-led reinvention. From the development of increasingly sophisticated smart factories to the wildcard impact of AI, the sector is accelerating its digital transformation. But this growing digitisation is introducing new risks, chief among them an expanded attack surface for cyber threats.
By leveraging technology and customer-centric digital transformation to adapt to market changes, meet customer demands and build future-fit capabilities, leading companies in the Industrial Manufacturing sector can enhance their capabilities and build more resilient business models.
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