Why digital is the way forward for advanced manufacturing companies

Advanced Manufacturing and Mobility Business Minute

In this episode, EY global analysts Julie Rosenthal and Mohit Ahuja share their insights on shifts in the advanced manufacturing landscape.

During the 4Q20 quarterly public earnings calls, leaders of advanced manufacturing (AM) companies discussed some of the poignant changes occurring in the industry. One very prominent theme that stood out in these discussions was digital transformation in manufacturing and how COVID-19 had accelerated its adoption in the industry. The arrival of the digital era shaped decisions made by aerospace and defense (A&D), industrial products (IP) and chemical companies during 4Q20.

Key takeaways:

• Changes in financial outlook: capex-driven sectors are witnessing positive demands, whereas commercial aerospace remains subdued. Meanwhile, defense and space are observing robust demand.
• Business reorganization or restructuring: companies continued to consolidate manufacturing facilities and office footprints, and lower headcount. Many firms witnessed cost improvements through structural changes and material cost savings through supply chain programs.
• Product design and innovation: manufacturers are undertaking digitization of existing products and launching connected offerings. Many are connecting their large installed base to internet of things (IoT) platforms, and supporting the launch of 5G and modern networking technologies for space equipment.