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Digitalization as a management task – checklist for decision-makers 2019

Principles of successful digital transformation in the manufacturing industry

Medium-scale industry is starting to successfully exploit the opportunities inherent in digitalization. 62 percent of enterprises with more than 250 employees have already incorporated digitalization into their business strategy, according to a recent survey. But once the PowerPoint presentations have been held, companies have to sit down and address the day-to-day challenges of implementation. Particularly in the manufacturing sector, this involves highly complex change processes. What’s needed to turn the many good ideas into value-adding processes with a positive ROI – this very year?

To find out, our newsroom team interviewed Horst Heckhorn (Senior Vice President, SAP Solutions & Business Development Executive) and Martin Thiel (Senior Vice President, 3DS-PLM), two of our experienced experts who support clients in successfully managing digital transformation. They list a number of factors which they consider decisive in their consulting work, and we would like to share these with our readers.

The interview has produced a checklist for decision-makers. This will certainly not let you just “deal with” digitalization in passing. Rather, the list of questions offers you an opportunity to reconfirm your planning and supplement it where appropriate.

For more information on CENIT’s three-pillar approach (virtual product, digital process, autonomous production), we refer you to an article by our interview partners entitled smartPLM.

Digitalization as a Management Task – A Checklist for Decision-Makers

1. Have you identified where system breaks undermine your efficiency?

Digitalization measures only become scalable when you achieve digital continuity throughout your value-adding network. As long as you have separate data silos rather than integrated applications, you cannot implement lean, fast and efficient business processes in any sustainable way.

You therefore need to identify system breaks, and to do this you need to think in terms of processes rather than in terms of company divisions or fields of operation. Be sure to pay attention to systems availability as well, because only high data quality with real-time capability will let you achieve autonomous manufacturing.

2. Have you defined a milestone-based roadmap?
Converting to a digital business strategy is complex and requires a great deal of innovative strength. In several dimensions, you will be dealing with fundamental changes or a full reset: In terms of technology, in the way your teams work and, crucially, in the way they think.

To pull this major project off successfully, you need to establish a step-by-step approach. Otherwise, you risk running out of steam before you reach your objectives.

You should rely on individual sub-projects that can go live quickly and generate tangible benefits. Typically, three to six months should suffice to reach each milestone. This is effective in terms of budgeting and helps you keep team and management motivation levels high.

Typical initiatives, which can generally again be subdivided into a series of sub-steps, might include process-driven integration of software platforms for the product development process such as 3DEXPERIENCE and SAP, the introduction of work methods like simulation driven design, or data structures that follow the model-based definition approach.

3. How closely does your IT adhere to the standards?
If everything becomes agile except for your IT infrastructure, your business plan will end up on the rocks. The closer you stick to the software standard, the more robust your setup will be and the easier it is to update your systems. In the cloud age, this trend will only accelerate.

The experiences of our CENIT experts confirm that the standards inherent in modern PLM systems provide almost total support for the core processes of manufacturing enterprises. Via our “ready-to-grow” approach, we have incorporated this realization into products like the SAP PLM Foundation or the PLM introduction concept of the 3DEXPERIENCE platform, in which we work with software packages that are approximately 80 percent pre-configured.

4. Does your calendar include regular meetings with the project teams? 
Medium-scale industry has a major advantage: It’s easier for them than for major corporations to get decision-makers from all their divisions to sit down together to rethink and digitalize their business processes.

But the same level of management involvement still has to be there further down the road, when the project is up and running. Digital transformation means fundamental change and therefore produces fears and insecurity. This in turn requires professional change management, and participation by decision-makers to give the project the significance it needs, along with positive reinforcement and, where necessary, “this is how we’ll do it” authority. 

5. Does your planning identify internal communications as a separate task field? 
The further you travel down the road to automation, the more important people become, because the technology has to be accepted and understood. To become really good, automation must be fine-tuned to the experience, creativity and spontaneous problem-solving skills of your employees.

This means that everyone in your company has to understand the changes, not just the people who actively participate in the projects. Internal communication enhances that ROI of your digitalization strategy.

What if you don’t have a strategy yet?
Martin Thiel and Horst Heckhorn emphasize that a limited-purpose digitalization project is a valid way to begin a transformation process, because the results serve as an important catalyst for further changes. This is all the more so when such a “bottom up” approach receives parallel “top down” support from management via the development of an overall digitalization strategy. The guiding principle is “think big, start small, start now!”.

When thinking about objectives, it helps to be clear on two main aspects. For one, the digitalization strategy can be aimed at the efficiency of existing processes, meaning that your company delivers products to the market more quickly and at lower cost. With this advantage in your cost structure, you will have an edge on competitors who rely on a similar business model.

In reacting to disruptive competitors who have only arrived on the scene recently, your goal will be to leverage digitalization to achieve greater flexibility, innovation and even entirely new business models. You can find new ways to add value, for example by creating highly customized products that can be viably manufactured in lot size one and can be delivered to the client with minimal delay.

Do you have any questions? Or would you like to add items to our checklist? Let us know at myquestion@cenit.com. We would be happy to forward your input to the CENIT experts!

Responsible for the content of this press release: CENIT AG

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