Introduction to Digital Transformation in Manufacturing

Modern manufacturing is at a crossroads.

On one path, factories continue to rely on paper forms, spreadsheets, and aging software that once kept production lines moving.

On the other, competitors embrace connected machines, real-time data, and artificial intelligence.

The difference is stark. Traditional processes are increasingly a liability, slowing down decision-making and hindering growth.

Yet in spite of this, a recent survey found a staggering 79% of factory workers do still rely on paper-based documentation to track work and communicate. The reliance on paper and other legacy methods creates bottlenecks that ripple across the business.

In this introduction to digital transformation, we explore why clinging to the old ways is holding manufacturers back - and why moving on to digital solutions has become imperative to survival and success.

Why Traditional Processes Hold Manufacturers Back

Decades-old processes like manual data entry and paper record-keeping may feel familiar, but they conceal hidden costs.

Paper forms and Excel sheets require constant human effort to update, share, and verify. They are prone to errors (a simple typo can throw off a production schedule) and offer little visibility. Unlike digital data - which can be easily aggregated and analysed - information on paper or isolated in spreadsheets tends to get siloed and go stale​. As a result, managers lack a real-time view of operations, and decisions are made on gut feel or outdated reports.

The limitations of traditional tools only become more pronounced as a company grows. A spreadsheet that worked for a small team can crumble under the complexity of enterprise-scale data. Multiple versions of files, duplicated entries, and lost paperwork start to erode productivity.

Common scenarios include:

• Delayed Insights: If production data is logged on paper, executives might only see performance numbers at month-end, missing the chance to course-correct in real time.
• Data Errors: Manual entry increases the risk of mistakes. It’s easy to mis-key a figure or use an outdated spreadsheet template, leading to errors in orders or inventory counts​.
• Poor Collaboration: Paper and standalone files can’t be accessed by multiple people simultaneously. Teams end up emailing files back and forth, leading to version confusion and lost updates.

Such issues aren’t just minor annoyances - they directly impact efficiency and profitability. A report on manufacturing IT identified paper-based, manual processes (often propped up by Excel workbooks) as a key roadblock, and noted that eliminating them is when 'the benefits of digital transformation begin to appear'​.

In other words, as long as critical processes remain analog, a business cannot fully unlock improvements in speed or quality.

Moreover, legacy processes make it hard to respond to change. If a sudden shift in customer demand occurs or a supply chain disruption arises, companies bogged down in slow, manual systems struggle to pivot and keep pace. Their data isn’t up-to-date or accessible enough to guide quick decisions. In a volatile market, this lack of agility can be fatal.

Manufacturing experts have warned that digital modernisation is now 'table stakes' and non-negotiable in industrial operations​ - simply because those who fail to adapt get left behind by their more agile competitors.

The Need for Digital Solutions

The flip side of these challenges is the tremendous opportunity digital transformation offers.

By converting paper records to digital data and upgrading legacy software to modern systems, manufacturers gain real-time visibility into their business. Processes that once took hours or days can happen instantly.

For example, digitising a quality inspection checklist means a supervisor can see issues immediately on a dashboard, rather than waiting for a paper report at shift’s end.

Digital solutions also enable integration. Rather than having sales data in one silo and production data in another, modern manufacturing platforms combine information from across the organisation. This gets rid of the blind spots where, say, the factory floor doesn’t know about a surge in sales orders, or management can’t easily correlate production costs with specific product lines.

Lack of integration is a common weakness in legacy setups - for instance, some companies still rely on exporting data to Excel for reporting because their systems can’t talk to each other​. By adopting integrated digital systems, manufacturers can ensure everyone - from design to delivery - is working off the same, up-to-date information.

Most importantly, going digital unlocks massive efficiency gains.

Studies show that a well-executed manufacturing digital transformation can lead to 30–50% reductions in machine downtime and an 85% increase in forecasting accuracy​. Those are game-changing improvements: less unplanned downtime means higher output and fewer costly production interruptions, and better demand forecasting means carrying less excess inventory and meeting customer needs more precisely.

In short, digital tools help manufacturers do more with less.

There’s also a talent angle. Younger workers entering manufacturing have grown up in a digital world. Handing them a clipboard and paper form may not only feel antiquated, it could affect retention. Frontline employees actually want access to modern digital tools; one survey found that nearly 72% of today’s manufacturing frontline workers had no concerns about using digital tech on the job​.

Embracing technologies like tablets, mobile apps, and AI assistants can improve worker satisfaction and effectiveness, whereas sticking with outdated methods risks disengaging a tech-savvy generation.

All of these factors underline the need for digital solutions. It’s not just about efficiency; it’s about competitiveness. Companies that digitise position themselves to be more agile, data-driven, and responsive, while those that don’t will find themselves increasingly unable to keep up with customer expectations and market dynamics.

Overcoming Barriers to Change

If digital transformation is so critical, why haven’t all manufacturers done it yet?

The reality is, many small and medium manufacturers face hurdles that make them hesitant.

Cost is a major concern, as new software or hardware investments can strain budgets. A global survey by Deloitte found 45% of SMEs cite the cost of investment as a significant barrier to digital transformation​.

There’s also the skills gap: about 40% of SMEs say they lack access to the necessary skills and talent for digital projects​. Implementing and maintaining advanced systems can be daunting without IT expertise on staff.

And there’s also our nature - our tendency to resist change. Employees comfortable with current processes may fear or distrust new technologies.

But understanding these challenges is half the battle.

Manufacturers can address them by taking a phased approach to transformation.

Start with a small pilot project to demonstrate value, such as digitising one troublesome paper process, rather than a big-bang overhaul of everything at once. This keeps costs manageable and allows teams to build skills gradually.

Additionally, choosing modern software that is user-friendly and requires minimal coding can alleviate the skills gap. Many digital platforms today are designed to be maintained in-house by non-technical users, meaning they don't require coding skills to be updated.

And on the people side, involving employees early - getting their input on pain points and training them on new tools - helps reduce fear. When staff see that digital tools actually make their jobs easier (like automating a tedious data entry task), they're more likely to champion the change.

Digital transformation in manufacturing is a journey, not an overnight switch.

But by taking practical steps that align with your team's comfort level and your budget, you set the stage for meaningful progress.

At Kinabase, we've seen firsthand how traditional processes can weigh down growing manufacturers. Our mission is to help small and medium-sized businesses access the same digital power that large enterprises enjoy - without the complexity or the enormous price tag.

Because we believe digital transformation should be empowering, not intimidating, we embed AI into everyday workflows so your team sees immediate benefits - like automated task creation and on-demand analytics. Our approach is rooted in the idea that technology should serve you, not the other way around.

In our next insight, we'll go deeper into practical strategies - covering everything from choosing the right pilot project, to ensuring your team feels excited (not anxious) about these changes.

Sources

• Parsable, 'The State of Digital Transformation and Connected Work on the Manufacturing Frontlines', parsable.com.
• engineering.com, '5 IT Issues Holding Back Your Digital Transformation', engineering.com.
• Kinabase, 'How MTRL Streamlined Custom Furniture Design with Kinabase', kinabase.com.
• WalkMe, 'Digital transformation in manufacturing in 2024', walkme.com.
• TRG International, 'Navigating Challenges: the Worrying State of Digital Transformation for SMEs', blog.trginternational.com.
• Quixy, 'Top 100 Game-Changing Digital Transformation Statistics To Help You Navigate it in 2025', quixy.com.