4 Principles For Manufacturers to Lead With Digital Transformation in 2018

As we move into yet another year, there still remains largely two types of manufacturing companies. There's ones that think they can make money indefinitely using traditional models, and on the other hand there's a group that sees new opportunities from connecting to devices, gathering data from sensors and using that information to improve their perfomance. If you fall into the former category, you risk losing out and if your company is part of the latter group, your ability to realise gains of the Industrial Internet will depend on your actions during these early years.

How, then, can you position your company to lead with digital transformation now rather than later? In this article I discuss 4 principles that I believe will help you plan for this turbulent period of transformation for your plant.

Reconsider your business model

The importance of business model innovation cannot be over-emphasised, because many companies, big and small, make serious mistakes when faced with disruptive technologies. And sadly, those that cling to old business models become irrelevant eventually.

No doubt about it, digital transformation and its constituents such as IIoT will make the manufacturing sector a haven for disruption by reducing costs and improving efficiency at a large scale. Failing to rethink your business model can therefore be detrimental. Organisations need to come up with ideas for generating new ideas and new application opportunities. To do this, they must start to critically think about the circumstances, enabled by Industrial IoT, that form the setting for modern day manufacturing. As opposed to simply focusing on producing goods. And because there are uncertainties surrounding digital transformation implementation, your company will need to come up with a framework for evaluating and prioritising these ideas.

Raise your technological ability

Due to digital transformation technologies, the lines of demarcation between IT and OT are starting to diminish. And there remains what I would call a "no man's land". Hence, to a certain extent, it is not clear which department should introduce IIoT. Meanwhile, what is certain is that Software will be key in ensuring that you lead as a manufacturer in the coming years. It is therefore of paramount importance to upskill your staff in that regard. Not just recruiting people with software expertise, but making sure you raise the technological acumen of everyone in your company.

Here's why. When all your your enterprise components such as Manufacturing Execution, Enterprise Resource Planning and Control systems e.t.c finally come together into one connected enterprise, your staff will have the digital proficiency needed to make effective use of the transformation.

What's more? In the factory floor, technologies such as augmented reality will enable relatively inexperienced operators to see data about equipment and operations. Mobile devices will give workers on the plant ?oor access to real-time production information and provide valuable diagnostics data to maintenance personnel when a downtime event occurs, so they immediately know where a problem is happening, what the issue is and where they can get the tools the need to fx it. They, in turn, will need to have an appreciation of digital interaction to comfortably navigate these systems and to understand risks related to cyber-attacks and accidents e.t.c.

Focus on outcomes

As it turns out, the effects of digital transformation are not limited to improvements in efficiency. Analytics software and connectivity allows manufacturers to better understand how their products are being used. These insights can enable you to differentiate your company by developing new value propositions aimed at solving customer problems, as opposed to selling goods and/or tools. This means looking closely at the the reasons why people buy from you, the outcomes they expect and the ways you can deliver. 

Traditionally, manufacturers have focused on selling a product which the buyer could use to solve their own problems by themselves. And because digital transformation enables it, if you focus on outcomes you will move closer to your customers. Becoming more involved in solving their problems. Smart use of data will put your company in a compelling position where, rather than a tool, the client can be offered a solution. An outcome that makes meaningful differences to customers in terms of satisfaction and productivity. This clarity on what your company is about will make customers trust you to deliver what you promise.

Rapidly innovate

In my experience, whenever digital transformation is mentioned, there is a tendency among companies to think of it as a single 'swoop' of disruptive innovation. But it has been proven time and time again that a steady stream of incremental innovations can be more more effective and profitable. They are easier to generate and test.

Here's the thing, even if it’s clear that digital transformation holds great promise in theory, it can be challenging to pursue in practice. That’s because the path forward is often unclear. But with the tools of the industrial internet, you can experiment with solutions that give you a no-risk way to see you can accomplish with digitisation. You can also manufacture small batches, distribute them rapidly and see how your customers respond. These small incremental innovations will rapidly increase in size and intensity into a meaningful transformation.

The idea is that getting started doesn't require an all-encompassing project scope, or a more favourable starting point. The key is simply to get started somewhere with a focused initial project, and to experiment and iterate.

Conclusion

It goes without saying that manufacturing companies who will lead in this revolution, regardless of region or size, are the ones that make advances in digital transformation. Because digitisation leads to a new level of competence and to new types of opportunities.

What other principles are worth mentioning? I'd like to hear your opinions in the comments section below.

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