Digital transformation does not start with technology, but with the people and processes, it enables. Envision the enormous possibilities and high impact that digital transformation can have in the production process by enabling you and your workforce. Giving human relevance to digital transformation allows technology to be successfully adopted and fully realize the benefits.
As manufacturing operations experts, even more, those of us who have lived and breathed lean manufacturing transformations, we know of the pressures of striving for efficiencies. The traditional methods to optimize manufacturing are not the ones that enable agility and competitiveness.
Productivity Lag
According to the Wall Street Journal, worker productivity improvements are lagging. The output per hour for workers in nonfarm businesses rose 1.3% in the third quarter compared to a year ago, marking the 32nd straight quarter of yearly growth below 2%. During the early 1990s and early 2000s, annual productivity gains were between 3% and 4%.
Businesses have been hiring more workers to boost growth, as opposed to aggressively raising the output of their existing workers. As a labor shortage challenges them, they are hiring less-skilled workers, which also hurt productivity. The way to offset this situation is to make the appropriate level of investment to help workers become more productive by providing training, coaching, and technology.
Industrial Revolutions
The industrial revolutions have reduced their duration fueled by accelerated innovation. The first one took one hundred years, then fifty, forty, until the fourth industrial revolution which got started only in the past eight years.
The new normal is a world where the very young fourth industrial revolution is disrupting businesses at an unprecedented pace and where continuous improvement gets augmented by technology. A digital transformation champion must have a strategy and process to engage the organization. It requires to have the right partners involved in an ecosystem of collaboration to avoid pitfalls because not one person alone has everything figured out – this is unchartered territory. Only those who focus on human capital and cultural adaptation will thrive, succeed, and realize the benefits.
Industry 4.0 is a set of technologies that enable transparency, connectivity, and faster decision making to free up time for employees to focus on core competencies and value-add activities. What problem the organization is trying to solve and how it will help the workers do their job more efficiently. Some of the most significant technologies for manufacturing are Augmented Reality, Collaborative Robots; and Industrial Internet of Things (IIoT).
Digital Transformation
There are tremendous amounts of information on digital transformation, and the disruption is creating in almost every type of industry and business. Typically, when leaders and organizations hear those words digital transformation, the most immediate thought is that digital transformation has to do with products and services, and the latest technologies or gadgets.
Think of digital transformation as the ability of organizations, its leaders, and employees to adapt to rapid changes enabled by evolving digital technologies – a continual adaptation to a constantly changing environment to create value.
Digital disruption is the main reason why, in the past 15 years, 52% of the Fortune 500 companies disappeared. The average expectancy of a Fortune 500 company has declined from around 75 years half a century ago to less than 15 years today and heading towards five years. Once upon a time, we used products and services that are now part of history. We are in the days of instant response, 24×7 access, almost everything we need accessible on a smartphone.
Making Digital Transformation a Reality
The complexity of this topic gets exacerbated by the overwhelming amount of solutions and options. Some leaders feel pressured to do something in the digital space. They may shut down or take a position of wait and see where this is going to go – maybe it will go away. Other leaders may want to proceed but are not clear how.
The only way an organization can achieve success through transformation is when people and technologies coexist. People must be at the center of any transformation, even more, when it is a digital one, and technology alone cannot drive change. The organization needs to understand their current state and pain points to identify a potential technology solution then to address them. Have the people be trained to experiment with the technology before scaling.
Unlimited Benefits for Manufacturing
Industry 4.0 technologies allow companies to stay competitive, increase revenue, speed, and transparency; improve productivity, quality, and safety. Digital transformation has the potential to deliver improved efficiency, less downtime, fewer defects, and a re-skilled workforce.
The tremendous potential for digital transformation in manufacturing is underestimated and untapped. Organizations that fail to leverage digital to drive innovation, optimize operations, and offer their employees an improved and more productive working experience, are becoming less competitive.
Get Started
There are plenty of reasons for manufacturing operations to get started in the digital transformation journey. The times to stay in the nostalgia of the past is over. Unless there is a decision not to get on the “bullet train” of progress and perish.
There is no space or time for continued wait and see skepticism or the “we’ve tried this before” mentality. There is no room for not embracing the new, or for no willingness to prototype small and rapidly to experiment and fail. There is a competitive advantage for early adopters and risk-takers.
Make the decision and commitment to lead the digital transformation. It may be the only strategy you have to focus on to make the difference.
I hope you have enjoyed this article as I did when I saw it published in the magazines Manufacturing Technology Insights and CIO Review.
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