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Industry 4.0: On the road to success there are no shortcuts

Let’s not talk about all the agile and shiny high-tech start-ups here. Let’s talk about our honorable manufacturing industry. After ignoring the Digital Transformation for some years, many traditional industry leaders are now aiming for dangerous shortcuts.

How to securely ‘hit the wall’
Let me be a bit provocative. My experience during the past years was that the majority of leaders throughout the traditional manufacturing industry was convinced that the fourth industrial revolution is just another marketing fad. Now, a certain diffuse panic can be felt and leaders start looking for quick and easy ways to catch up lost terrain. This is an El Dorado for all kinds of ‘smart consultants’ and for component as well as tool providers, who are all eager to sell their ‘miracleware’. Combine this with delegating everything to R&D or with hiring a low-ranked Digitalization Coordinator and the frustration is pre-programmed. Here are seven ideas about how to survive.

Seven ideas how to master the Digital Transformation
Forget about the concept that this is just a minor change. We are about 10 years into the Digital Transformation, with another 20-30 years to go. Some industries have already been severely disrupted, others are standing  in the queue. In 100 years, our grand-grand-grand children will learn how all this has exactly happened  and everything will look very logical to them. Today, being in the middle of this thunderstorm, it is very difficult to find a clear path. Some disruptive technologies are already well-visible, others – like e.g. Blockchaining – are just around the corner. So, why not just wait and watch the others struggling? Well, standing still might not  be a good idea in times when ‘the lion is chasing the flock’. So, first of all, we need to start running. The following  best-practice inputs can be helpful for guiding us into a promising direction.

1. Securing Digital Transformation competence in the leadership team
Manufacturing industry was coined by mechanical and electrical engineering for most of its history. Already the third Industrial Revolution, bringing mechatronics and software into the game, was a big challenge. Now, totally new competences are needed within the C-level management team. Without that, no external consulting will show fruits. Without that, the big and destructive chasms between locations, hierarchies, disciplines, IT and OT will remain.

2. Implementing a cross-functional transformation-core-team
Great if organizations are ready to install a CDO, a Chief Digitalization Officer. But we must bear in mind that Industry 4.0 cannot be ‘purchased’ by hiring a new expert. A successful migration can only fly, if historically separated entities learn to cooperate – within a company as well as with key-suppliers along the value chain. Therefore, a CDO needs to be supported by forming an agile and interdisciplinary team, consisting of selected stakeholders throughout the main functional areas of a company. Such a transformation-core-team is important for getting properly started, but also essential for handling all the challenges along the road.

3. The courage to ‘question everything’
In some companies the Digital Transformation might not change much. In other companies it might change almost everything – from business models, organization to processes and people’s jobs. At least in the beginning and at some periodic points of time we will need to have the courage to question everything we did in the past and everything we believe about the future. Learning from best-practice examples can be very inspiring and helpful.

4. Establish a solid and leadership-supported Transformation Masterplan
Questioning everything cannot be a permanent condition (even though this should be periodically repeated). In order to function in our industrial reality, we will need to document our believes, goals, strategies, measures and roadmaps in a compact Transformation Masterplan. Until modified, this is the direction to go – for everyone in the company. This is also the framework that is urgently needed for resolving conflicts and making transparent decisions when we proceed.

5. Scouting for Quick Wins
Having a Masterplan for giving us a medium- and longterm direction is very essential. The migration to Smart Industry is definitely not an easy task and will naturally lead to many irritations and conflicts. Therefore it is very important to systematically identify and pick some low-hanging fruits along the road. This will help to keep the entire company motivated.

6. Risking a cultural change
The Digital Transformation can be seen as a huge mountain of challenges, but it is also a vital fountain for new opportunities. Whatever direction we are going, it is important to explain and communicate this thoroughly within the organization. This is a unique chance to re-inspire the complete company and to win the brains, hearts and hands of each individual.

7. Proceed in agile and manageable steps
Even though we have a Masterplan that gives the basic direction, it is important to structure the Smart Industry migration into small steps. It must be OK to fail with a single small step. It is important to get our Deming-Cycle spinning. Plan – Do – Check – Act. This will bring us iteratively closer to our big goals. Gigantic Berlin-Airport-style project approaches are much too static and are bound to fail.

More about this will follow at our Smart Industry Forum Summit in June 2017. We invite you to take a very practically oriented look at the current situation. Various best-practice examples from different segments of the manufacturing industry will help us navigating through the upcoming challenges.

Author: Heinz Gassner, Founding Director – Smart Industry Forum
Find more information at www.smartindustryforum.org

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