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Digital Transformation – Where to Next?

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Quite often, I see companies that want to digitally transform, but don’t have a clear picture of why, or what they’re looking to achieve. In truth, this is often because they think of digital transformation as a goal, rather than a means to an end. And I believe this is entirely the wrong way to think about it. Particularly today, in an age when the COVID-19 pandemic is affecting every facet of industrial manufacturing in every conceivable industry, digital transformation must be seen as the journey to get somewhere – not the destination. Every company is different, and there are no easy answers on the path there.

Today, we see that, with the COVID-19 pandemic keeping individuals from leaving home, digital experiences are being put to the test. Businesses are increasingly relying on digital services to serve their customers and differentiate from their competitors. In manufacturing, these capacities will become even more severely tested, as digital transformation moves from a ‘nice-to-have’ to a ‘must-have’ in the drive for success today.

For manufacturers to kickstart or develop their digital transformation journey, I advise three areas of focus:

1. Data Analytics

There’s an increasing drive to use data and analytics to improve operational effectiveness, time-to-market, new product development, and increase product quality and reliability. But for many manufacturers, data is still not seen as an important resource to store and analyse. This is the wrong approach. Data management and data governance are critical components of success at the best of times. Good governance is vital to get the best value out of your data assets.

What we mean by ‘value’, as usual, depends on the business at hand. For some, it translates as cost savings. For example, a pharmaceutical company producing vaccines could require simultaneous monitoring of hundreds of variables for final product purity. Only with insight into which variables are affecting product quality and how, can a manufacturer effectively change its processes to eliminate things like waste and excess production costs.

For others, ‘value’ translates as improved productivity. Data analytics can help unearth opportunities to increase production yields by looking at how they vary from day to day and analysing the patterns. This can lead to small changes that add up to large profit increases with no capital investment or risk.

Still for others, ‘good value’ is about customer satisfaction. Data on customer preferences can be analysed to find commonalities and adapt their output to meet those demands. This kind of analysis could prove even more important today, as consumer habits go through a period of upheaval and change.

Although the use cases for advanced data analytics vary widely, and will differ for every business, analytics should be part of every transformation journey. This necessity has not abated during the current pandemic.

 

2. People

Technology is important, but the real lynchpin of digital transformation will always be people, who are both its biggest help and hindrance.

During transformative periods, it is perfectly normal for employees to wonder:

  • How is this going to impact me and my co-workers?
  • How will my job change because of this transformation?
  • Do I have the right skills to succeed when it comes?
  • Will my employer help me learn?

For manufacturers to address these multi-pronged questions, they need to do two things swiftly. The first is communicating digital transformation to increase employee engagement. The second is directing workforce planning for the new reality.

Whether you have 10 or 150,000 employees, communication is crucial to avoid fear and resistance to change. Employees need to be on board for the digital transformation journey, or it will fail before it even begins. Business leaders should aim to get the perspective of cross-functional teams that may be able to highlight outstanding concerns early on, or bring new issues to the table. Questions that should look to be answered clearly are basic ones such as:

  • Why is this happening?
  • What are the new technologies that will be introduced to our daily work?
  • What impact will they have?
  • What is the timeline?
  • How will the company prepare employees for upcoming changes?

Workforce planning is also arguably more important than ever, particularly given how quickly and suddenly the world is now changing. Rather than becoming completely reactive, business leaders should look to mobilise and prepare their workers, considering what technologies they’ll use and what skills will be needed for workers and the business to thrive. Whether this entails building bespoke programmes to train employees, or partnering with educational organisations to deliver online training sessions, developing employees’ skills helps build a better workplace culture in the short term, and can future-proof the company in the long term.

3. Reducing Investment Risk

Success has often depended on businesses taking proactive measures rather than responding reactively to situational forces, but in the age of COVID-19, maintaining a proactive mindset has become increasingly difficult. In order to claim a position in the forefront of the market, a manufacturer must anticipate and be well prepared for market changes long before they happen, but without some investment into the future, however uncertain it looks, this strategy will be elusive to most.

Manufacturers should stop and consider what its business specialisms are and what it wants to achieve from new technology and transformation before embarking on any costly investments. Whereas in the past, manufacturers may have learned from what their competitors were doing, the new normal has made it apparent that there are no ‘right’ answers, and that every company must act based on its own unique set of circumstances. In a world where nothing is certain, new investments and new technology also needs to be tested as thoroughly as possible before any capital is spent. This will not only reduce upfront costs for businesses but will also enable a steadier approach to transformation – in the long run, a more sustainable approach.

Where to next?

As the manufacturing industry continues to evolve, digital transformation will continue to be a top priority for global and European manufacturers. In these uncertain times, the best advice I can give to any business leaders in this field is to ensure that they work with partners who truly understand them and their business, so that can make sure they are making the right decisions and future-proofing their company for years to come.

Plan the next steps on your digital transformation journey from the Management Perspectives online hub. From here, you can find webinars, blogs, podcasts, videos, newsletters and more to guide you into the future of smart manufacturing.

 

Andrzej Soldaty
Andrzej Soldaty
President of the Board, Future Industry Platform Foundation
Andrzej Soldaty associated his professional career with the area of industry automation. In the years 1986–1990, head of the Robotics Department at ROBRA "Chemoautomatics", he participated in the development and implementation of pilot applications of industrial robots in the chemical industry, and also co-created a specialized manipulator for the plastics industry. The next 25 years he worked for the international concern Festo, a supplier of solutions and components for industrial automation. During this period, he participated in the development of a number of applications and implementation of automation projects in various industry sectors. He participated in building and developing Festo company in Poland, he also led international projects in Central and Eastern Europe. In the years 2010-2015 he was the President of the Management Board of Festo sp.z o.o.
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