Responsible manufacturing - the digital ethics imperative

  • Posted on March 16, 2021
  • Estimated reading time 3 minutes
digital ethics in manufacturing

For manufacturers, rapidly shifting customer demands and market realities are accelerating the need to adopt Industry 4.0 technologies to remain competitive. In the face of uncertainty, business and technology leaders are rethinking their business and working feverishly to transform their workforce, adopt more agile processes, and strengthen their company’s resilience. Alongside all that change, there’s also a growing acknowledgment that manufacturers are under more pressure than ever to operate as responsible businesses.

It’s in the intersection of responsible business and new digital technologies that we see growing urgency around digital ethics. As manufacturing companies are Rethinking the way they operate, work to automate processes, gather personal data to improve employee and customer experiences, build resilience into their supply chain, etc. they are coming up against ethical challenges for which there’s no clear path forward. Executives find themselves asking questions like how to use AI without introducing bias and unfairness, how to personalize experiences without overstepping the boundaries of privacy, or how to empower workers with technology that is inclusive and accessible.

Avanade decided to dig into these and other tough questions in our Digital Ethics Global Survey, which we fielded to 800 business and tech executives from 6 major industries. Here’s what we learned from respondents in the manufacturing industry:

  • When we asked about drivers of corporate culture that might compel companies to act responsibly, manufacturing respondents were more likely than those in other industries to say their firm has a defined set of corporate values (86%) and a robust risk management program (85%).
  • When it comes to digital ethics efforts specifically, manufacturing leaders told us that the IT organization is the function most often responsible (31%) just as in the other industries. Second-most common for manufacturing firms is the CEO (15%).
  • There’s a heavy focus on employee behavior in the manufacturing industry, with the most common approach to digital ethics being to actively train individuals to make good ethical decisions (56%) and the biggest barrier to digital ethics improvement is a lack of expertise among employees (27% say this is a significant barrier).
  • Manufacturing had the lowest rate of respondents (57%) saying they plan to increase budget/efforts, and the highest (39%) saying “no change.” Once again focusing on employees, the most common plans with new budget are to improve digital ethics training among employees (67%). Other plans included adopting new digital ethics tools and technologies (63%) and engaging with a 3rd party expert (47%).
  • More than in any other industry, manufacturing leaders said alignment to corporate values influenced their digital ethics efforts (84% saying it’s a significant factor or key driver) followed by competitive pressures (81%). And from a competitive standpoint, manufacturing respondents said the most common top way to demonstrate value of digital ethics is increased customer loyalty (51%, higher than any other industry)

These survey results paint a picture of the manufacturing industry as heavily focused on corporate values and good employee behavior. And while these considerations are essential for building a strong, trustworthy brand with digital ethics, there’s a general lack of consistency in digital ethics practices that will make it hard to stand up to scrutiny if employees, customers, investors, or regulators start to ask tough questions. (For example, manufacturing respondents were the least likely to say their firm has a dedicated digital ethics team.)

There were also a number of ethical issues for which at least a quarter of manufacturing respondents had negative views of their firm’s performance, including accessibility, inclusivity, pollution, and ethical testing. These gaps will require a good deal of self-reflection among manufacturing firms that want to demonstrate corporate responsibility and adherence to corporate values. One of the best paths forward is for manufacturing CEOs to take on more responsibility for digital ethics, because while the IT organization will be instrumental for imparting ethical principles into digital projects, it’s the CEO who will set the tone for good behavior across every department, each of which will face its own set of ethical challenges with digital transformation.

Download our new Avanade guide for manufacturers to rethink their business and address immediate challenges.

As always, Avanade welcomes your input, and if you’re looking for a more in-depth discussion or help on any of these topics, you can contact us directly or post a comment below.

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