How digital manufacturing can escape ‘pilot purgatory’

| Report

The global race for innovation leadership in digital manufacturing1 is picking up pace: two-thirds of industrial companies worldwide say that digitizing the production value chain is one of their highest priorities (Exhibit 1). That’s according to our latest research in the area, which we explore in a new report, Digital manufacturing—escaping pilot purgatory.

Nearly 70 percent of survey respondents on average say digital manufacturing is a top priority.

To achieve this goal, companies are actively pursuing a broad range of digital-manufacturing use cases in three areas (Exhibit 2):

  • Connectivity. This enables the flow of relevant information to the right decision makers in real time. Examples include digital performance management and the use of augmented reality to communicate interactive work instructions and standard operating procedures.
  • Intelligence. Use cases relate to applying advanced analytics and artificial intelligence to an array of data to generate new insights and enable better decision making. Examples include predictive maintenance, digital quality management, and AI-driven demand forecasting.
  • Flexible automation. In this area, new robotic technologies are leveraged to improve the productivity, quality, and safety of operational processes. Examples include autonomous guided vehicles and using cobots for assembly processes.
Digital manufacturing solutions are adopted consistently across industry sectors and categories.

Despite this focus and enthusiasm, McKinsey’s collaboration with the World Economic Forum on the future of production has shown that many companies are experiencing “pilot purgatory” in which they have significant activity under way but are not yet seeing meaningful bottom-line benefits from this (Exhibit 3).

Less than 30 percent of organizations did rollout-relevant solutions company-wide.

To more fully understand how manufacturers across the globe are approaching their digital-manufacturing transformation and the challenges they are facing, McKinsey conducted its fourth Digital Manufacturing Global Expert Survey (see sidebar, “Overview of McKinsey’s Digital Manufacturing Global Expert Survey”). The results of this survey provide interesting insights into how manufacturers’ approaches differ across the world, as well as concerning behaviors that are contributing to pilot purgatory.

In the first part of our report, we share the results our 2018 survey. These show largely continued levels of enthusiasm and prioritization related to capturing benefits from digital manufacturing, with notable acceleration in China and India and regression in Japan. However, while there is significant importance placed on the topic and many pilots have been launched across a range of use cases, less than a third of respondents cite having moved critical use cases—such as digital performance management—into large-scale rollout. At the same time, more than 90 percent of surveyed companies believe that they are either at the forefront of digital manufacturing in their industry or, at least, on par with the competition.

In the report’s second part, we offer perspectives on six success factors that manufacturers demonstrating at-scale impact from digital manufacturing are following. These factors span the transformation categories of process, infrastructure, and organization:


  • Approach the opportunity “bottom-line-value backward,” rather than technology forward.
  • Establish a clear vision and change story for how digital manufacturing will create competitive advantage and develop a phased road map and business case.


  • Form an early view on the comprehensive target-state technology stack that is scalable and analytics-enabled and that supports the digital-manufacturing road map.
  • Build and lead a focused ecosystem of technology partners to rigorously manage the building of the stack.


  • Drive the transformation from the top (and via profit-and-loss owners) and coordinate implementation widely—do not treat it as an isolated IT implementation effort.
  • Get ahead of the capability gap: build the skills to achieve impact and the culture to sustain it.

The move from the current version of factory production to digital manufacturing holds the promise of significant value, and according to the results of McKinsey’s 2018 survey, this shift is a top strategic priority for manufacturers across the globe. Despite the importance placed on it, most manufacturers are struggling to take the digital-manufacturing successes they have experienced in limited pilots to a scale that would bring the full benefit of the technology.

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A holistic approach to digital manufacturing—one that considers the fundamentals of the organization and the business as much as it focuses on the technology-related factors—can help manufacturers get over the hurdles that stand between pilot success and company-wide rollout.

The good news is that, as demonstrated by several real-world cases, a rollout is not a mystery, and successes exist. These “lighthouses” have the power to help unify a manufacturer’s vision of digital manufacturing. The knowledge from these case examples can also help build a solid business case and chart the course for company-wide implementation.

Download Digital manufacturing—escaping pilot purgatory, the full report on which this article is based (PDF—5.6MB).

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