A recent report by PwC found that the manufacturing sector is investing $1.1 trillion a year in digital transformation solutions for factories around the world.
According to PWC’s 2022 Digital Factory Transformation Survey, 10% of companies surveyed have already completed — or are in the final phases of — their digital transformation, while 64% are still in the beginning stages, requiring “significant” resources to scale up their digital initiatives.
Who’s making the biggest investment in factory transformation? According to the PwC’s survey, companies in industrial manufacturing and the chemicals industry spend the most. Investment focus has primarily been in Europe (labor cost arbitrage) and Asia (automating high quality production volume growth).
Of the 700 executives surveyed, one-quarter that spend at least 3% of net revenue on digitalization solutions had the highest returns — a la double-digits — and rapid pay back. The average investment range for all sectors, the report says, is 1.6% to 1.9% of annual net revenues.
While efficiency had previously been a focus of digital transformation, the report found that the goal has shifted to flexibility and resilience — largely thanks to the COVID-19 pandemic and conflict in Europe. As the report says, “the capability to deliver in the face of material scarcity and volatile supply chains are driving investments in operations resilience and factory automation.”
PwC’s report is extensive, so we encourage you to check out the full report: 2022 Digital Factory Transformation Survey.
