The concept of transformation is referenced
all around us. You don’t have
to look far to find it in headlines about
health, science, politics, society, and more. As
such, it’s no real surprise that transformation
is also an important topic among manufacturers,
especially as they face innovations and
challenges in production, quality, operations,
technology, and the supply chain.
When it comes to committing to Industrial
Transformation (IX), we are seeing some real successes.
The hard work is being done and it’s paying
off for manufacturers who are taking their IX
journey seriously. According to LNS Research
data, IX leaders are 72% more likely to have grown
revenues by more than 10%, and 57% more likely
to have reduced cost of goods sold by more than
10% as a result of their IX program. While these
early successes are certainly promising news for
manufacturers, to create long-term and sustainable
IX results, there needs to be a bit of transformation
to the transformation itself.
According to Tom Comstock, principal analyst
at LNS Research, IX leaders must “reorient or
reject the core processes they needed to deliver
early IX successes and adopt a different set of
operating procedures for lasting impact.” In other
words, Comstock is stressing the fact that manufacturers
must be able to rearchitect their IX
programs in mid-flight.
The biggest reason this is necessary for longterm
IX strategy success is the challenging, albeit
crossable, divide between those early successes
and sustainable IX. Comstock explains that this
gap exists between the processes for success in
early-stage IX programs and those processes that
work for more mature programs. “Crossing this
transformation chasm is the fundamental differentiator
between success and stagnation/failure
in IX,” says Comstock.
Many of the challenges to long-term, sustainable
IX can be found in four necessities of
getting an IX program off the ground: team
staffing, processes, strategies, and methodologies.
These four elements must continue
to evolve within the IX program so as not to
become burdensome to it down the road.
To do this effectively, one of the first steps
a manufacturer should take in getting past the
transformation chasm is recognizing upfront that
the chasm does, in fact, exist and mapping out
an effective roadmap to cross it. Planning for the
long-term stages early on in the IX program is a
key preparation step according to Comstock.
Following are Comstock’s five key recommendations
for manufacturers:
- Begin focusing on building the infrastructure
work as soon as practical.
- Select easy use cases that also help build the
data infrastructure over the long term.
- Create a “to-be” operational architecture that
explains how the IT, OT, and new digital technologies
will work, thereby providing a goal
that can be referenced to accelerate IT and
OT integration.
- Build digital ambassadors across the manufacturing
network to accelerate the rollout
of solutions.
- Work with the finance organization early on
to ensure program/corporate resources and
budget for plant rollouts.
Taking these early steps to prepare for the long-term needs of the IX journey will help pave the way for sustainable results. But as important as these steps are, it’s equally important to realize they are just the beginning given that there are four stages of IX identified by LNS Research. Each of these stages come with their own needs, challenges, and best practices.
“For manufacturers to succeed in IX, they need to initiate their program with one set of processes, structures, and teams and then readjust all those factors to succeed in the long run,” says Comstock. “Jumping the transformation chasm is hard, but it is fundamental to IX success. Manufacturers can accelerate their leap by incorporating as many IX best practices as early as possible into their program.”
To learn more about IX and Comstock’s latest research, visit www.lnsresearch.com.
