The change to digital manufacturing is happening faster than many business owners think. If you’re thinking about moving your business online or trying to figure out if the pros and cons of online manufacturing are right for you, you’re asking the right questions at the right time.

The numbers tell a strong story: 98% of manufacturers have already begun their digital transformation journey, and by 2030, the smart manufacturing market is expected to be worth $790.91 billion¹. But here’s what those numbers don’t show: some businesses are cutting their operating costs by 15–20%, while others are losing an average of $5.56 million² due to cyberattacks.

At Elite Mold Tech, we’ve seen firsthand how online manufacturing can revolutionize production processes. We’ve also seen how hard it is to make this digital shift. This complete guide will teach you everything you need to know about the benefits and drawbacks of online manufacturing so you can make smart choices for your business.

What is online manufacturing, exactly?

Before we talk about the pros and cons of online manufacturing, let’s make sure we know what we’re talking about. Having an internet connection in your factory isn’t the only thing that makes online manufacturing work. It is a full-service approach that uses cloud-based platforms, Internet of Things (IoT) sensors, and real-time data analytics to keep track of and improve production processes.

It’s like the difference between using a paper map and GPS to get around. Traditional manufacturing uses manual processes and systems that are only available in certain places. Digital manufacturing, on the other hand, gives you real-time insights, the ability to predict when something will break, and the ability to connect all parts of your supply chain.

Smart manufacturing goes even further by using AI and machine learning to make decisions on their own. Currently, 55% of industrial manufacturers are already using generative AI tools³, showing how quickly this technology is becoming mainstream.

The Major Advantages of Going Digital

Significant Cost Savings That Matter

When we talk about the benefits of online manufacturing, the cost savings often grab attention first – and for good reason. McKinsey research shows that machinery and equipment manufacturers typically achieve 5-20% cost savings through digital transformation⁴. But what does this look like in practice?

Elite Mold Tech has observed manufacturing clients reduce operational costs by 15-20% through improved automation and efficiency. Real-world examples are even more impressive: steel manufacturing companies have achieved over €1M in annual savings, while boat manufacturers have cut production time and costs by 40% through digital process control⁵. CNC machining services, in particular, has played a pivotal role in these improvements, enabling manufacturers to optimize precision, reduce waste, and streamline production processes⁵.

These savings come from multiple sources:

• Reduced machine downtime by 30-50%
• Increased throughput by 10-30%
• Improved labor productivity by 15-30%⁶

Accessibility for Smaller Businesses

One of the most significant advantages of digital manufacturing is how it levels the playing field. Small and medium-sized businesses, which make up 99% of all businesses in the world, can now use advanced manufacturing tools without having to spend a lot of money.

Cloud-based manufacturing platforms do away with the need for costly on-premises hardware. This scalability lets you change how you do business without having to spend a lot of money on infrastructure. For a small mold manufacturing business, this could mean competing with larger players using the same advanced technologies.

Global Market Access Made Simple

Online manufacturing opens doors to global markets that were previously difficult or expensive to enter. Digital platforms make it easier for suppliers to work together and lower the costs of doing business. Better visibility and traceability make it easier for products to meet international standards. Real-time data sharing makes it easier for global supply chains to work together.

We’ve seen at Elite Mold Tech how digital integration can help manufacturers be more involved in global value chains by giving them access to customers and suppliers all over the world that they couldn’t have reached through traditional methods.

The Serious Challenges You Need to Consider

Cybersecurity Risks That Keep CEOs Awake

Let’s address the elephant in the room: cybersecurity risks. Manufacturing experiences the highest cybersecurity breach costs at $5.56 million per incident, representing an 18% increase from 2023⁹. The manufacturing sector accounts for 29% of global ransomware attacks, with automotive manufacturers losing $22,000 per minute when production lines stop due to cyber incidents¹⁰.

These numbers aren’t just numbers; they show real businesses that are losing a lot of money. When you think about the pros and cons of online manufacturing, cybersecurity should be at the top of your list.

Quality Control Becomes More Complex

Traditional Six Sigma processes expect 3.4 defects for every million chances. Online manufacturing systems have extra problems because they can’t be monitored from afar, and communication is slow. More than 80% of businesses can’t keep track of quality metrics¹¹ correctly, which makes it hard to keep an eye on production.

This challenge is particularly relevant for precision manufacturing like Elite Mold Tech’s operations, where quality control standards are non-negotiable. Remote monitoring requires more sophisticated systems and backup procedures to maintain quality standards.

Technology Dependency Creates New Vulnerabilities

Manufacturing facilities face an average of 800 hours of unplanned downtime annually, costing approximately $260,000 per hour¹². The automotive industry faces particularly severe impacts, losing $1.3 million per hour during production disruptions¹³.

The challenge becomes more complex when you consider that 90% of manufacturing machines globally remain unconnected to modern networks¹⁴, creating integration challenges that can take years to resolve properly.

Implementation Failures Are More Common Than Success

Here’s a sobering reality: 55% to 75% of ERP implementations fail to meet their objectives according to Gartner research¹⁵. Companies like Revlon lost $64 million in sales from ERP failures, while Johnson & Johnson experienced $20 million in lost sales due to system integration problems¹⁶.

Most businesses don’t realize that the average ERP implementation takes more than 2.5 years, which means that operations are uncertain for long periods of time.

What Experts in the Field Are Saying

Manufacturing industry leaders emphasize that successful digital manufacturing implementation requires strategic approaches beyond technology deployment. BCG research reveals that only 26% of companies have developed the necessary capabilities to generate tangible value from AI investments, despite 89% planning AI implementation¹⁷.

The Manufacturing Leadership Council found that while 95% of manufacturers evaluate smart manufacturing technology, only 10% have successfully integrated solutions at scale¹⁸. David R. Brousell, Executive Director, notes that “manufacturers are finding that digital technology investment is good for business as they achieve new levels of performance in efficiency, productivity, and innovation.”

Successful implementations follow BCG’s 70/20/10 rule: 70% effort dedicated to people and business transformation, 20% to data and technology backbone, and 10% to algorithms¹⁹. Companies like Siemens achieved 20% energy consumption reduction and millions of euros saved annually through AI-driven predictive maintenance²⁰.

Choosing the Best Option for Your Business

You need to carefully think about your organization’s readiness, financial resources, and strategic goals before deciding whether or not to use online manufacturing. Technology has a lot of potential to make money, but for it to work, you need to manage change, train your employees, and put in place strong security measures.

At Elite Mold Tech, we recommend prioritizing data quality and infrastructure development before deploying advanced analytics or AI solutions. To be successful, digital transformation needs at least 12 to 18 months, with clear goals and measurable business results.

Important Points

Knowing the pros and cons of online manufacturing shows that there are both great opportunities and big risks. While 98% of manufacturers have begun digital transformation and leading companies achieve dramatic efficiency improvements, the 70-95% failure rates for digital initiatives underscore implementation challenges²¹.

To be successful, you need to plan, manage risks well, and stay committed to changing your organization beyond just deploying new technology. In a manufacturing economy that is becoming more digital, companies that can find this balance will have an edge over their competitors.

FAQs About The Pros and Cons of Online Manufacturing

What is online manufacturing, and how is it different from regular manufacturing?

Online manufacturing uses cloud-based platforms, IoT sensors, and digital connectivity to manage production processes from afar. In contrast, traditional manufacturing depends on localized systems and human supervision. Real-time data analytics, the ability to monitor things from a distance, and integrated supply chain visibility are some of the main differences.

What are the main cost savings that come from using online manufacturing systems?

Companies usually save 5% to 20% on costs by lowering their operating costs, cutting machine downtime by 30% to 50%, and increasing worker productivity by 15% to 30%. For example, steel manufacturers save more than €1 million a year and cut production time by as much as 40%.

What kinds of security problems should manufacturers think about when using online systems?

Manufacturing has the highest costs for cybersecurity breaches, at $5.56 million per incident. This sector is also responsible for 29% of all ransomware attacks around the world. Cyber-related production shutdowns can cost car makers $22,000 per minute, so they need to have strong security measures in place.

How long does it usually take to set up online manufacturing solutions?

For implementations to be successful, they need to last at least 12 to 18 months and have clear goals. Most ERP integrations take more than 2.5 years, and 55–75% of implementations don’t meet their original goals without good change management and realistic timelines.

What factors determine success in online manufacturing transformation?

BCG research shows that successful businesses follow the 70/20/10 rule: 70% of their time is spent on people and business transformation, 20% on data and technology infrastructure, and 10% on algorithms. Only 10% of manufacturers can successfully integrate solutions on a large scale, which shows how important it is to plan and be ready as an organization.