Route to digital transformation

Alec McCullie is a partner and specialist in digital platform technology at Vendigital. He recently shared his insights with Engineering Capacity.

As economies in developed nations rebound strongly, UK manufacturers must find ways to step up their productivity through well-funded, strategic digital transformation plans. In order to realise the potential of Industry 4.0 technologies, businesses should put in place a bespoke digital transformation roadmap, and consider how best to assess the value of different technologies and ensure they are effectively integrated.

Industry 4.0 technologies, such as the Internet of Things (IoT), automation, big data analytics, AI and machine learning, to name just a few, have the potential to play a key role in supporting manufacturers on the road to recovery. In particular, they can help businesses to scale up to meet supply-side demand, while maintaining an efficient cost base. Improved access to data from across the business can also inform manufacturers’ decision-making, while improving customisation, agility, speed to market and sustainability.

Despite this, a lack of knowledge about the true potential of Industry 4.0 technologies is holding back progress for some businesses.

Organisations may also struggle to define their focus areas for digital transformation, due to a lack of methods, tools or practical guidance, or may not have the right infrastructure in place, such as ERP systems or robotics. A lack of analytical skills and gaps in cross-functional visibility of the value of digital is preventing some companies from building a business case for further investment.

According to a joint research study by Vendigital and Cranfield University, there are several common challenges that businesses are facing during digital transformation programmes, including issues with funding and a lack of digital skills.

With the right plan in place, manufacturers can overcome these challenges – and by following the six steps below, they can develop a robust roadmap to fast-track their digital transformation programmes:

1. Raise awareness and understanding

Business leaders should start by improving awareness and understanding of Industry 4.0 technologies and their potential to deliver enterprise value. They should also improve their knowledge of the benefits of shifting to an operating model that allows them to make agile decisions, informed by reliable data. For digital transformation to be successful, it’s not simply about using the right technology platforms and systems. There needs to be just as much focus on the corporate culture and mindset, along with the organisational activities, processes, competencies and operating models.

2. Invest in leadership and training

The next step is to build digital leadership at all levels of the organisation and develop a culture that’s committed to researching new technologies. Attention should be given to spotting and filling skills gaps, including the upskilling of existing employees. The appointment of dedicated ‘Digital Transformation Champions’ can also help businesses to improve their internal communication while encouraging employees to support digital transformation programmes.

3. Assess the value of Industry 4.0 technologies through quick wins

If viewed strategically, Industry 4.0 techniques can join smart products and smart processes together to drive enhanced value for customers and the wider supply chain. Businesses can exploit this value by determining how their smart products can integrate into their customers’ processes and operations, putting in place the right operating model, focusing on IT infrastructure, internal capabilities and processes, and leveraging customer data and performance-based product data to improve how products are designed, developed and manufactured. Board-level executives need access to a smart data environment to define their objectives and inform their decisions, so this must be established at the start of the digital transformation journey.

4. Develop a bespoke Industry 4.0 framework

In the absence of any industry-specific frameworks, businesses will need to develop their own and these are likely to vary depending on the current operating model and long-term strategic vision. Many companies will not have the right digital infrastructure in place. To network smart technologies and new technology-based operating models, companies will have to adapt their existing IT infrastructure or implement entirely new solutions.

5. Drive value through integration

Assessing opportunities to enhance value through the cross-functional integration of digital technologies shouldn’t be viewed as a one-off process. Instead, this should be kept under constant review as there are likely to be opportunities for continuous improvement.

6. Track the benefits

The smart data environment created as part of the company’s digital transformation not only supports businesses in tracking the benefits, it can also help to underline the case for further investment by forecasting value creation with a high degree of accuracy. Such dynamic models can then be used to guide the organisation’s strategic planning.

The key to remaining competitive in the future will be a business’s ability to fast-track their digital transformation plans, enabling them to achieve growth in recovery. The absence of vital planning tools, such as a generic roadmap, to guide manufacturers on their digital transformation journeys, could be preventing businesses from accelerating their delivery plans. However, by developing and implementing a bespoke digital transformation roadmap, manufacturers can gain a competitive advantage and realise their growth potential.

To learn more about how to optimise value from digital transformation on to the way back to growth, read our white paper Digital Transformation: The Smarter Way Back to Growth.