Just as the business goals need to be clearly defined, they also need to be translated into a set of quantitative and qualitative metrics on which success can be measured. This approach requires a mindset shift away from more conventional, unit-based outcomes, towards more business-aligned metrics that address specific challenges, such as improving Operating Income Margin, Fixed Asset Utilisation, Inventory and Cost of Goods Sold. Through consistent benchmarking, these metrics can be tracked over time to demonstrate the efficacy of the transformation strategy.
In executing transformation, manufacturers are often induced into a never-ending series of pilot projects linked to emerging digital capabilities. These projects usually operate as a sandbox, detached from the business’ day-to-day operations. Such pilots reduce the risk of failure, yet often produce no trigger for wider adoption. To make transformation happen, leaders need to think beyond pilots and look at how emerging technologies can be used to facilitate real minimum viable products that are delivered to customers.
It’s rare for manufacturers to be starting their digital transformation from a greenfield position. More commonly, manufacturers will be seeking to balance their desired new capabilities with existing infrastructure and machinery. This can often seem intimidating due to the implied need to ‘rip and replace’ their existing investments, such as SCADA control systems. In reality, digital transformation is less of a leap forward and more of a phased transition, meaning that legacy assets can be sweated while new technologies are rolled out to complement existing infrastructure.
Often one of the greatest sources of trepidation for industrial leaders is whether they actually have the skills and knowhow to see the transformation project from end to end. As I said before, digital transformation is multi-disciplinary, and many of the new skills that are required are not found in a traditional manufacturing environment. Leaders therefore need to augment conventional engineering skills with technology-oriented skill sets, such as software development and IT security. In practice, this commonly involves a two-speed approach of helping existing workforce to adapt and upskill to new technologies and ways of working, while also bringing in new hires, contractors and expert consultants to fill in any gaps.
Building From a Solid Foundation
Developing and executing on a digital transformation strategy is never a once-and-done process. It’s an ongoing priority for manufacturing decision-makers and on-the-ground staff alike. While the strategy must be fluid and responsive to the learnings that come from implementation, addressing key challenges and considerations up front will greatly increase the likelihood of a successful transformation programme.
Few manufacturers have the ability to manage all aspects of their transformation in-house. Transformation is an ecosystem play, and building and orchestrating the right set of partners and providers is essential. Look for a partner that can help your business address the strategic challenges that could derail your transformation, and help you gain access to the technologies and skills required to execute on your strategy.
They should start with an assessment to clearly define what your objectives are, help with cost structuring and modelling to calculate the ROI of your investment, and develop a steady and practicable roadmap to phase-in technology adoption. The choice of which technology only comes after this strategic base is in place and the path to successful transformation is laid out.
Build your digital transformation with the right strategy and the right partner.