"Domestic Manufacturing Digital Utilization Below OECD Average... Cloud Activation Needed"

Korea International Trade Association International Trade and Commerce Research Institute, Report on 'Digital Transformation Strategies for Manufacturing Using Cloud'

Data provided by Korea International Trade Association

[Asia Economy Reporter Kim Heung-soon] It has been revealed that the utilization of digital technologies in domestic manufacturing falls short of the average of the Organisation for Economic Co-operation and Development (OECD). It is analyzed that cloud utilization must be activated to promote the digital transformation of these companies.

According to the report titled "D.A.T.A.: Digital Transformation Strategy for Manufacturing Using Cloud" released on the 26th by the Korea International Trade Association's International Trade and Commerce Research Institute, the utilization rate of cloud computing by domestic manufacturing companies was 22.1%, lower than the OECD average of 30.9%.

The utilization rates of big data analysis technology and supply chain management (SCM) information sharing technology by domestic companies were also 2.5% and 9.1%, respectively, both below the OECD averages of 22.1% and 15.2%. The gap between large and small enterprises in Korea in four major digital technologies?cloud, big data, CRM, and ERP?recorded 31.3 percentage points, 30.7 percentage points, 37.3 percentage points, and 53.1 percentage points, respectively.

The report emphasized, "Cloud technology is a good means to support the digital transformation of small and medium manufacturing enterprises, the servitization of products, innovation in value chain structure, productivity improvement, enhancement of customer value, and even alleviation of digital technology inequality between large and small enterprises." It then presented 'D.A.T.A' as the key keywords for a digital transformation strategy using cloud. D.A.T.A stands for Data Governance, Augment Intelligence, Transform Channels, and Analyze Experience.

First, the report suggested establishing sustainable data governance to gather fragmented data within companies and increase its utilization. It also urged that when building smart factories, cloud technology should be used to gradually integrate information technology (IT) and operational technology (OT) and to intelligentize manufacturing processes.

Furthermore, it added that promoting cloud-based channel digitalization and analyzing customer experience data to establish a servitization strategy for products and build a virtuous cycle structure for enhancing customer value are important.

Lee Jun-myung, senior researcher at the Trade Association, stated, "Digital technologies should be spread throughout the industry via a cloud-based manufacturing digital transformation platform led by the private sector and cooperated by large and small enterprises." He added, "The government should prepare a step-by-step roadmap for cloud adoption to support small and medium enterprises, while companies should resolve data security concerns when using the cloud through training of specialized personnel and awareness improvement education, and establish a data-based collaboration system."

This content was produced with the assistance of AI translation services.