• NTT DATA Philippines Inc

Four Major Challenges in Manufacturing

And the need for digital transformation



No business sector has been spared by the economic disruptions brought about by the pandemic, and micro, small, and medium enterprises (MSMEs) have been hit the hardest. MSMEs make up 99% [1] of the country’s business operations, and nearly 40% had to shut down [2] as an effect of the lockdown measures.



With easing restrictions, the manufacturing industry has shown continuous signs of recovery more than a year later, although it remains vulnerable to economic shocks. Even as the economy reopens, the pandemic has highlighted the need for a change in the business model to be able to adapt quickly to similar situations in the future.



Read on to know more about the present challenges in the manufacturing industry and how to address them.



The Present Challenges in the Manufacturing Industry

  • Securing supply chains


Effective supply chain management is necessary for the manufacturing industry. But with containment measures involving travel restrictions across local and international borders, there is a need to rethink the supply chain to ensure production lines will not be delayed or come to a halt.


A 2020 McKinsey research [3] reports that supply chain executives encountered challenges in the supplier base, production and distribution, and inefficient digital technologies. Addressing these problems requires a transformative approach to focus on future needs and not just temporary fixes.


  • Ensuring safety

Remote work was one of the most significant shifts implemented by other businesses, but this option is not possible for employees working in production. The past year alone has introduced new protocols such as temperature checks, social distancing, and increased sanitation/disinfection to ensure the safety of all workers on the floor.


Other practices may involve staggering shifts to avoid bottlenecks when employees arrive and leave, reconfiguring production lines, and alternating breaks to reduce the number of people on the floor. Although a necessity, these new processes have added layers of complexity to the job – inadvertently slowing down production and decreasing efficiency.


  • Establishing business continuity plans

For most industries, the pandemic has brought to light unseen vulnerabilities that need to be addressed to function in the current and future economic landscape. But not all organizations have BCPs in place to tackle these issues – which could be due to lack of awareness, capacity, or not recognizing the need for one, among others.


For MSMEs in particular, the absence of BCPs may have led to challenges in ensuring the availability of raw materials and the efficient transport of goods [4]. Though BCPs do not fully guarantee that an organization will remain business-as-usual in crises, they can potentially minimize the negative impact of such events on the business.


  • Increasing sales and revenue

This last one’s a given, and it’s not unique to the manufacturing industry alone. Businesses operate to increase their sales and revenue numbers. But with the financial damages incurred the past year and significant investments made to function in the current landscape, companies are even more determined to recoup these losses.



The Next Step in Your Digital Transformation Journey


All these challenges put significant pressure on the manufacturing industry for faster delivery and higher production. So how can your business respond?


  • Smart manufacturing

With the proper IT infrastructure, your industrial production can increase productivity and efficiency with smart manufacturing. Machinery connected to each other and the Internet ensures optimal control of production processes. The data collected directly from the equipment are digitally analyzed to measure key performance indicators more efficiently and improve manufacturing performance.


  • Cloud solutions

Manufacturers often have more than one production site, and with evolving business models and work setups, it is essential that the company remains connected and integrated at all levels. Such is the purpose of moving to the cloud.


Traditional, on-premise technology uses individual computers that require maintenance to have updated software for data processing. By shifting your network to the cloud, you get to experience higher technical reliability, save costs on in-house servers and equipment, and even prepare your business for scalability.



Whichever step you take, you must begin your business’s transformation. These solutions can help you address the company’s current challenges and even the future ones with predictive analytics and other intelligent capabilities.


The bottom line: staying non-digital is no longer an option. Adopting these new technologies is necessary to ensure you keep moving forward. Learn more about manufacturing solutions that can transform your service operations.


[1] MSME Statistics | Department of Trade and Industry Philippines (dti.gov.ph)

[2] The importance of MSMEs in the Philippines | The Manila Times

[3] Resetting supply chains for the next normal | McKinsey

[4] Impact Assessment of COVID-19 on the Philippine's Manufacturing Firms

NTT DATA – a part of NTT Group – is a trusted global innovator of IT and business services headquartered in Tokyo. We help clients transform through consulting, industry solutions, business process services, IT modernization and managed services. NTT DATA enables clients, as well as society, to move confidently into the digital future. We are committed to our clients’ long-term success and combine global reach with local client attention to serve them in over 50 countries. Visit us at nttdata.com/ph.


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