Digital Transformation for Manufacturers: Why Small Firms Can’t Wait
When people hear “digital transformation,” many picture massive factories with endless budgets and global IT teams. But the reality is that the future of U.S. manufacturing depends on much smaller companies. According to the SBA, nearly 98% of all manufacturers fall into the “small business” category. For them, transformation isn’t about getting ahead—it’s about staying alive.
In a recent CXO Insights conversation, Peggy Gulick, Principal at intelliShift LLC, laid out why small firms can’t afford to sit on the sidelines any longer. Her message wasn’t about buying the flashiest tools—it was about survival, culture, and grit.
The data most small firms ignore
Small manufacturers generate more data than they realize—production metrics, downtime events, and quality results pile up daily. Some companies are already sitting on terabytes of it. The question is: what are they doing with it?
Those who learn to use their data are starting to deliver the kind of fast, responsive, “Amazon-like” service that buyers now expect. Those who don’t? They risk being outpaced by competitors who can make better, faster decisions with the same raw information.
Culture before technology
One of the biggest mistakes small manufacturers make is jumping straight to automation. Peggy Gulick’s advice was simple: don’t abandon the basics. The lean toolkit—visual boards, standard work, checklists—is still the foundation. Without that discipline, no amount of new tech will stick.
And the ideas that truly move the needle often come from the people on the floor. At AGCO, a safety concern around tablets used in inspections led to workers suggesting wearables instead. That experiment eventually brought vendors like Google and 3M into the factory for real-world testing. The lesson: culture and creativity drive adoption more than any gadget.
Start small, show results
Transformation doesn’t have to begin with a multimillion-dollar project. Quick, visible wins create momentum. Even something as simple as a manual downtime board can surface the real problems before investing in software. A basic Andon system—just red and green lights—can train teams to ask for help in real time. Digital work instructions, once validated, make training new employees faster and more consistent.
Each of these steps proves the value of change without overwhelming budgets or teams. And once workers see that a tool actually helps them do their jobs better, they start asking for more.
Don’t go it alone
Smaller manufacturers may not have large internal teams, but they do have access to powerful networks. Universities can provide capstone teams to work on specific challenges. Suppliers can co-innovate and train workers directly on the floor. Regional hubs like MAGNET connect companies with expertise and resources. Even fractional consultants can bring a roadmap and check in periodically, without requiring a full-time hire.
Collaboration turns transformation from an isolated struggle into a shared opportunity.
What leadership really looks like
Perhaps the most important point: strategy is useless if it never reaches the shop floor. Leaders who stay in the office, disconnected from daily operations, quickly lose credibility. Change sticks when leaders walk the floor, ask questions, listen to problems, and stay present through the inevitable bumps.
Transformation isn’t about showing off new technology. It’s about persistence, personalization, and making sure every worker—whether they’ve been on the line for 20 years or 20 days—can see a real benefit in how they do their job.
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