30
Nov
2016
0

Digital Transformation Is Not Just a Shift From Analog

Digital is the new mantra. Every aspect of our lives is impacted, more or less, by digitalization. Even human relationships have partially moved to a digital level. Most of us have digital avatars—or digital twins, speaking the language of industry—that act on our behalf in the digital world.

Unlike many other situations, in this case industry is actually considered more advanced than the consumer world because of our use of many digital devices. This is true if we consider digital in opposition to analog.

But digital has a new meaning, and when we talk of digitalization in operations we go much further than talking about just substituting old analog control systems with new microprocessor-based systems.

That happened several years ago and—even if it’s never really complete because technology continues to advance—we can see that as having been achieved.

Today we talk about customers’ expectations to have digital products with associated digital services, providing them a totally new and more comprehensive user experience that includes fast delivery, customized configuration, complete and immediate support, and social openness. All these aspects have a strong impact on how production of the product itself is organized because everything starts in the operations. Operations need to focus not only on stability and efficiency, as has been done over the past 10 years, but also on the agility and responsiveness that digital culture demands.

Digital advances are already making operations management more effective thanks to continually updated dashboards that let people self-adjust their activities instantly and also data analysis that helps managers better optimize the organization. A digital thread through the entire supply chain and core processes not only helps to improve performances and reduce costs, but it’s also fundamental in achieving the flexibility to respond to and anticipate fast-changing customer demand. A digital link between the client, the product and the operations can shorten the supply chain and integrate the client into it, providing him a new awareness of his role and enabling him to influence operations with his own daily behavior.

It’s interesting how the move to digital is certainly technology-related, but any technological improvement or initiative still has people and their interaction as the final goal. Digitalization of information aims to help people communicate faster and more easily, with that communication based on more reliable facts. Digitalization of communication helps to align people through consistent data across the whole value chain. Digitalization of controls and processes helps to automate repetitive and well-identified processes in order to free up the time that people can use to focus on value-added business aspects instead. Digitalization of the user experience aims to guarantee that people work in alignment with the strategically defined company message.

All this requires adopting new solutions and technologies—new and more open control systems, new communication protocols to connect all the different systems in a single coordinated entity, new devices able to generate and communicate data, new components able to transform traditional products into connected products, new user interfaces able to simplify the interaction of the operators with the production lines using the power of all the information available, and new portals to distribute in a modern and efficient way the information inside and outside the plant. It even requires new partnerships and the creation of new ecosystems formed by organizations providing specialties and expertise not needed before; not only in terms of digital technologies, but even of digital culture.

Capturing the digital opportunity will require a new operations management discipline and organization. Fortunately, digital makes this discipline and organization easier to implement and sustain. Combining the two together can create a powerful combination that not only allows companies to maintain their competitive position, but perhaps even disrupt and renovate their well-established market space.

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