Achieving Digital Transformation in Manufacturing
14 March 2022
Author - Avinash Ramachandran
Digital in manufacturing has evolved beyond a buzz word to one promising transformation in the areas of customer experience through newer products and services, operational excellence through real time monitoring of assets and defining the future of work for employees. Umpteen examples are available to demonstrate the power of digital technology, its use cases and process for realizing them. Despite this, less than 30% of digital initiatives achieve the desired objectives. This gap arises for multiple reasons, most notable are defining end state and identifying problems to solve, achieving adoption, and choosing technology providers. Executives and digital leaders often find it challenging to close the gap. Here are a few ways to emerge successful in digital transformation from our experience.
Picking areas for digital transformation
Identifying a problem without context and business case will come across as solving issues trivial to organization. For example, tracing each employee at a remote mine site at any given time will be important from a safety perspective, while tracing in packaging unit with less hazardous machines would be needed when employees spend too little time on productive activities. Therefore, it is imperative to build context to a digital implementation to reap full benefits.
For organizations early in the digital journey, picking use cases with high business impact and low investments or defining smaller milestones in large projects are some best practices. An investment in the range of 5,000-10,000 USD with at least twice as much impact in quality, finance, and HR areas would be a good start for early movers. Few companies with high investment appetite may incline to failing fast and learning by experimenting a variety of use cases. Picking areas with high customer impact would also be an effective way in pursuing digital.
Managing change with technology
Human factors supersede any other in a successful technological change and building accountability among employees will be the single biggest success formula for effective change management. Having right sized project team, designing project scope for 3-6 months, conducting regular check-ins with top management, and defining a target handover team for adoption, are few notable practices to address change management. Digital projects executed in smaller groups (< 5) often reduces inertia, ensures quick decisions, and minimizes roadblocks or conflicts. Higher level traction can be achieved if end users become involved from the start.
Choosing right technology providers
Organizations traditionally relying on external providers for IT services, would continue to do so for digital projects for effective capital allocation. Since market is flooded with small to large digital service providers, whose pitch on offerings are similar, it becomes challenging to assess provider capabilities and techno-commercial fit. Undertaking reference checks with provider clientele, benchmarking commercials, and conducting technical evaluation by digital leads can help assess fit.
In organizations where digital journey has matured, internal digital centers offer huge flexibility to address product ownership, cost, and quality of implementation. Subsequent technical ownership in running, upgrading, or discontinuing a project are easily handled as newer use cases emerge.
It must be noted that digital transformation should be viewed as a journey. Executives’ and digital leaders’ goal should be to instill confidence in end state of this journey by choosing the path (what technology and problems to solve) and right vehicles (capable people and technology providers).