Digital Transformation Is More Than a Buzzword
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Even with all the technologies in place to support digital business, there's another major problem: getting everyone on board and pointed in the same direction.
One of the sobering realities in today's manufacturing environment is that IT systems aren't as smart and connected as most CIOs would like to believe. Despite growing digitalization, too much data, information and knowledge resides in silos.
Gaining visibility into everything is daunting. Tying POS and supplier data into operations, logistics and shipping on a real-time basis is a mind-bending task. Few organizations—even the smartest and the best—have mastered this concept, which typically encompasses the fourth industrial revolution, a.k.a. the industrial internet of things.
It's not that the tools don't exist. A growing array of sensors, smart devices and machines, along with agile cloud platforms, provide the plumbing for real-time, integrated systems. Yet, even with all these technologies in place and a mobile and cloud framework to support digital business, there's another nagging problem: getting everyone on board and pointed in the same direction.
A supplier might not see the advantage of tagging raw materials and individual items with sensors or RFID. A company may not have the money to devote to an initiative, or it may not realize the same level of value as your company. Multiply all of this across multiple suppliers, partners and customers, and the complexity grows exponentially.
"Companies aim to extend their relationship with their customers, but they are ultimately bound by their existing value chains," notes Debbie Krupitzer, digital manufacturing and industrial internet lead at Capgemini.
The answer? There's a need for unfettered communication, cooperation and collaboration within an enterprise—including across the boundary that too often separates IT and lines of business. It's necessary to create an environment where there are no walls, boundaries or borders.
But the task also requires different thinking and processes with the business ecosystem. It may be necessary to seed technology to other companies within a supply chain, or to tap into new types of expertise to put data to work in new and different ways.
For example, Swedish auto manufacturer Volvo now uses RFID to track components and speed assembly, leading to both cost savings and efficiency gains (including a manufacturing accuracy rate exceeding 99.6 percent). But it doesn't stop there. The same system delivers visibility into factories worldwide, including supplies and inventory, notes Yvan Jacquet, data communications and RFID concept project manager for Volvo Cars.
This, among other things, means that customers can change custom orders at the last possible moment. The next step is to equip dealers with handheld scanners that would speed and automate the reporting of defects.
Finally, says Capgemini's Krupitzer, "Business plans, staffing and governance all need to reflect the more agile way of doing business that comes with digital transformation."