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.