Where Manufacturing Matters

What Really is Digital Transformation and the 5 Steps to Get Started

Posted by Alan Lupus on May 17, 2019, 9:03:00 AM

Many in the manufacturing community seem to be talking about digital transformation lately, and why they need to transform how they do business, but what really is digital transformation, and why should you even care about it?

Michael Dell, famed CEO of Dell Computers, had a few things to say about digital transformation:

“IT for a long time has been about how do you make old processes more efficient. But with all the progress in digital technology, there is a kind of digital transformation that is occurring. And you see it with an explosion in number of devices and you see it in the explosion in number of applications.”

He also said “The IT organization can’t drive or lead a digital transformation. It has to come from the business and business strategy, because they are fundamental to how a company or organization evolves.”

So digital transformation seems to be important, but why? The reason is that the world has changed, and in order to survive and thrive in our new economy, your business must adapt and change, as well. Technology has changed our lives in many ways from smart phones, IIoT, digital media, GPS, Linked In, Twitter, Facebook, and many other examples. We need to be even more integrated than ever before. Critical data from business processes drives good decision making and can be a competitive advantage in the marketplace. Without good data, you may make ill-informed decisions that can adversely affect your ability to grow and to be profitable.

So how should you approach a digital transformation process, and how can you get integrated across multiple applications and processes? Here are five steps to get started:

1. Understand Where You are Today. Do an assessment of your current environment. What is being done manually today that could be automated? Where would the benefit come from? Could our company realize lower labor costs, higher quality, better use of internal resources/productivity, or the ability to support higher growth in our business? How open or capable is our team to change? Where are the gaps today, and how could we close them?

2. Develop a Strategy. Every company is at some point in the digital spectrum. It can range from email and spreadsheets to fully automated customer order digital portals and use of robotics and intelligent IIoT. Identify where you may see the biggest benefit and fastest ROI, and use that as a launching point into your digital transformation journey. Increasing order velocity/fulfillment can increase capacity and help you to satisfy even more customers with your existing resources.

3. Integrate and Automate Workflows. Many companies work in silos, with an ERP business system, a separate CRM customer relationship system, MES, WMS, UPS/FedX, and many other applications that are either standalone, or disconnected. Often they represent multiple generations of legacy apps too. Work with a professional software services systems integration firm that can help you develop an integration solution strategy and architecture to share data, create common data pathways, and provide links to automate data/workflows between you and your external trading partners. Lower operational costs, faster throughput, and the flexibility to grow, adapt and scale are all keys to your future success.

4. Focus on your SLAs. SLA (Service Level Agreements) are performance standards you put in place between you and your customers, and between operations and IT. How quickly do you respond to an incoming order to ship out today? Are you staying within your contracted response times? Has a customer ever been negatively impacted by your slow response? (stock outs, stopping a production line from lack of parts, or can’t fill shelves in a CPG retail distribution supply chain?) How is your IT team keeping up to stay aligned to your business process SLAs? Is the software system your bottleneck? Failing to maintain good SLAs can not only hurt your supplier status, it can cost you in significant fines, and lost future business from your largest customers.

5. Build a New World. Embrace the new tools that are being introduced all the time. New ecommerce B2B and B2C portals, supplier portals, blockchain, EDI, and new digital marketplaces can expand your footprint globally. Optimizing what you do will pay for itself in faster response times, higher quality, and greater customer satisfaction. But only use the technology and tools that make sense for you. Jumping into a new tool/technology without a good reason and plan could be worse than not implementing it at all.

The best results come from a long-term view of the business and a vision and commitment to change the status quo. Have the courage to do something different and lead. Innovation is the driving force behind successful firms. Digital transformation is a journey well worth taking.

 ***

StoneDonut, LLC, based in Oakwood Village, OH, is a digital transformation software development firm focused on application integration, information management, and business process improvement. We work at the enterprise, and small-midsize business level, to help you to leverage technology to help your company to grow and prosper. Let us know if we can help you in your digital transformation journey. You can reach me Alan Lupas, Sales and Marketing Manager, at alupas@stonedonut.com or call me at either 440-287-7570.

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Topics: Digital Transformation, StoneDonut

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