The transition from traditional to modern digital technologies presents a business revolution, that makes incremental changes to the conducting of business processes. In scientific literature, this process is referred to as digitalization, as an integral part of Industry 4.0. The purpose of this paper is to present a relevant literature review on the topic of digital transformation and key performance indicators in manufacturing. The aim of this paper is to emphasize the importance of digital and digital transformation key performance indicators in manufacturing. The intention of this paper is to emphasize the significance of digital transformation and digitalization in manufacturing, to identify key advantages and challenges of its application and to categorize key performance indicators in digital transformation. To achieve a competitive advantage and a better position in the market, the results presented in this paper can be used by companies to improve the allocation and use of resources, aiming for digital transformation.