Industry 4.0 leaders must constantly balance longer-term strategic planning & alignment with short-term investments & execution to generate immediate value. External market conditions usually tip the pendulum in one direction or another. In stable markets, digital transformation moves at a measured, sometimes sluggish, pace. Turbulent market conditions trigger more rapid, uneven transformation.
Three years ago, we were in the midst of a world-altering event that shook up our way of life and every industry that makes up our economy. The manufacturing industry was among those most acutely affected. Supply chain disruptions, labor shortages and spiraling costs have and continue to create unique pressures that are forcing manufacturing leaders to react to unprecedented times with unprecedented digital transformation.
While manufacturing leaders have embraced the potential of smart technology, few organizations have delivered on the promise it offers. In the above report, only 10% of organizations reported having integrated smart manufacturing solutions. Point solutions with narrow applications, overwhelming data volume & velocity and talent shortages still make up a vast majority of increasingly “smart” manufacturing facilities.
We find most manufacturing transformation programs fall into one of two scenarios.
Executive sponsorship in place
Funding is secured
Program is resourced
Roadmap guides the work
Use cases identified and prioritized
Effectively utilizing agile methodology
Change management work stream embedded in program
Program momentum stalling
Leadership increasingly impatient for digital transformation results
Proofs of Concept successes are isolated & not programmatic
Struggling to scale program successes
Difficulty securing funding & sponsorship
Transformation objectives not aligned across corporate & plants
If your organization is in Scenario 1, KEEP GOING. Your digital transformation program is well-positioned to keep swinging the pendulum toward use case delivery execution & scale-up.
If you are suffering from one or more symptoms of Scenario 2, it may be time to SLOW DOWN, take stock of lessons learned and align a strategic path forward.
Solution: Slow Down to Speed Up
Paradoxically, taking the time to slow down and carefully craft a cohesive, aligned roadmap can accelerate the journey toward a more efficient and agile future.
We believe an effective digital manufacturing strategy should focus on identifying high-value digital use cases that come together in a connected capability ecosystem (people, process, data, technology). Each use case should be contextualized in a broader enterprise architecture, capability roadmap and case for change.
Example use cases:
Example Use Case
Potential Enabling Technologies
Planning & Resource Optimization
Worker Allocation Optimization Engine
Computerized Maintenance Management System (CMMS), Learning Mgmt. System (LMS), Advanced Analytics (AI / ML)
Reduced re-work cycles
Reduced (equipment & employee) downtime
Digital Work Instructions & Logbooks
CMMS, Extended Reality (XR), Mobile Device, Data Mgmt. Platform
Reduced mean time to repair
Increased first time right rates
Advanced Simulation & Emulation
Virtual In-Line Process Testing (e.g., bottling & filling process)
3D Modeling Tool, Simulation Platform, Product & Process Data Mgmt. Platform, Advanced Analytics (AI / ML)
Reduced # of physical trials
Increased first time right rate
Failure Mode Event Prediction
CMMS, Internet of Things (IoT), Data Mgmt. Platform, Advanced Analytics (AI / ML)
Improved overall equipment effectiveness (OEE)
Reduced (equipment) downtime
Sustainability & Energy Management
Demand Response & Load Management
IoT, Data Mgmt. Platform, Advanced Analytics (AI / ML)
Reduced energy consumption
Reduced peak demand charges
Source: Kalypso’s digital transformation use case inventory, which includes 100+ use cases and accompanying benchmarks
In this handful of use case examples alone, we see the Internet of Things (IoT), Computerized Maintenance Management System (CMMS), data management platform and advanced analytics (AI/ML) show up as enablers three to four times each.
All too often, point solutions are developed for each use case, leading to redundant systems & tech stacks, complex integrations and compounding technical debt.
We find organizations are most successful when guided by a:
Prioritized List of Digital Use Cases: Bring together cross-functional leaders to force rank digital use cases with consideration to business value vs. ease of implementation.
Converged IT/OT Architecture: Break down IT and OT barriers with an open architecture powered by the digital thread.
Multi-Phase Roadmap: Build a holistic capability roadmap (people, process, data, technology) with phases tied to business outcomes.
Business Case: Align key value drivers and set achievable quantitative targets that can be measured and tracked.
Outcome: From Incremental Benefit to Transformational Value
In a 2019 report, Gartner shared that businesses move twice as fast on their digital transformation journey once the staff and management collectively understand the importance of their digital path ahead. Our observations from the field align with this conclusion.
We find that slowing down a few months to shape a strategy can help organizations transition…
Individual charters and differing opinions on transformation priorities
A cohesive vision grounded in business priorities that aligns executives and change agents across the organization
Disjointed initiatives competing for scarce resources
An overarching value case and roadmap that contextualizes priorities and accelerates path to value
Point solutions with narrow applications
A scalable platform for change, including IT / OT architecture, organizational structure and partner network
As we transition from a reactionary environment during the pandemic to a landscape of rising inflation and economic uncertainty, executives will demand aligned digital programs driving quarterly value drops and self-funding roadmaps.
When done right, we have seen our clients achieve both top-line growth, like 30% increase in factory throughput, and operational excellence, such as a 12% reduction in operating expenses and a 50% increase in OEE, through their digital transformation journey.
As your organization takes its next step, consider slowing down with a digital manufacturing assessment & strategy to align your organization and speed your path to value realization.
At Kalypso, Steve leads a team focused on serving senior product development and supply chain executives to help them digitally transform their capabilities in strategy, product development, planning, sourcing, manufacturing and distribution & logistics to shorten time to market, to drive revenue growth from new products, to streamline operations and to improve rates of compliance.