Digital Transformation


18 Nov
18Nov

Digital Transformation is the latest must do in any business… but to most, what is Digital Transformation? The answer is simple… its the process of transforming analogue to digital! 

Still not clear?…This is the problem most businesses face, Digital Transformation is not clear or understandable. This lack of understanding leads to many false assumptions… Digital Transformation is expensive, a short cut to success, people become irrelevant etc… and too many consultants, software providers and automation companies are taking full advantage of lack of understanding and charging unbelievable costs to partially or badly transform businesses.

It is important businesses understand Digital Transformation, the benefits and the most effective way to implement!!! 

Digital Transformation if embraced correctly can be low cost, can enhance existing improvements and can empower the employees of any business to become more Agile, more Motivated and more Effective. Many businesses make the initial mistake that they perceive Digital Transformation to be a short cut to success… this is like buying weight loss pills and expecting to lose 10kgs in a week!

To understand Digital Transformation, first we need to understand it! It is a common misunderstanding that Industry 4.0, IIoT, Smart Factory and Digital Transformation are all the same thing…Industry 4.0, is not a methodology! It is in fact just a period of time which indicates that Industry is at its fourth evolution. The third evolution was the embrace of automation and now the fourth evolution is connecting with this automation to provide data and controls that aid us to further improve the efficiency and performance of business.

The most successful businesses currently embracing Digital Transformation, understand that there are NO SHORT CUTS! Businesses need to evolve with the correct Optimize and Efficient mind set from the beginning. 

Many Companies immediately see automation as an immediate solution… without understand if Automation required. The first step in Digital Transformation is OPTIMIZATION… optimization of processes before automation ensures a business does not spend Money/CAPEX which it will need to depreciate for many years. Many Companies find half way through depreciating automation, their requirements have changed, volumes reduced… and they now lack the agility to either react to market changes or reduce costs which are now fixed. 

The next mistake many companies make is focusing on only BIG STEP Change. It has been proven by millions of companies worldwide during the periods of Industry 2.0 and Industry 3.0… that EMPOWERING ALL employees to embrace a Kaizen approach that delivers both Big and Small changes is the best way of Optimizing the performance of any business. With All employees Empowered to Optimize the business… now a business is ready to Automate and Manage this effectively and efficiently. Now evolving to Industry 4.0 ensures that the data generated by automation is the correct data and used correctly to drive further improvement.


Why has industry evolved? This is due to the evolution of the market! The first evolution was driven by demand… so Industry only needed to supply. The second Evolution was driven by mass demand… so Industry needed to grow mass production. The Third evolution was driven by Quality, Cost and Demand… so Industry needed to drive Efficiency, Performance and Supply. The Market has again evolved, and again becomes more demanding… with a requirement for Personalizing, Digital Sales, Digital Connection and Simplicity. This means Industry needs to again evolve to meet the new market requirements and become more AGILE and CONNECTED… whilst maintaining the same Quality, Cost and Delivery.

IIOT, Industrial Internet of Things, is about connection and data… like an industrial mobile phone… everything within the business connected and sharing data on demand.This is an important contributor to Industry 4.0… as connection and data is critical to ensuring a more AGILE and CONNECTED business. 

To achieve this, there are many commonly known options… from Cloud Services allowing digital connection without hard wired connections, installed servers and firewalls. Also the use of Mobile technology and connection is helping businesses connect more to the people and processes of a business ensure greater reactivity and more efficient decision making. RFID, continues to be a big part of IIOT as still one of the best solutions for connecting products and people. IIOT is also evolving with also relatively unknown technologies that allow companies to connect people, processes and products within their business. These technologies include LoRa, Long Range low powered wide area networks.

SMART FACTROY is not Industry 4.0! this is a normal common misunderstanding. Smart Factory is the incorporation of intelligence within a business… it is neither a period of time like Industry 4.0 nor a digital connection like IIOT. SMART FACTORY is the use of generated data to automate standard decision making.

Systems such as MES (Manufacturing Execution System), are now taking Machine data and linking to other systems such as ERP systems with built in algorithms that control machine operations, process controls and product types. With such systems, Manufacturing facilities are becoming better controlled with less human error and more agility due to faster connection to customer demands via ERP. 

Other examples of SMART Factory can also be found in other areas of a business such as HR with digital automated up skilling, Maintenance with automated Preventative maintenance and Sales with automated product customization and costing… with DATA, any area of any business can become SMART. 

However, SMART Factories are SMART and not ARROGANT… many businesses strive to have a fully automated factory with full digital control. This is ARROGANT and not SMART… arrogance is assuming that People have no place within a Smart Factory. If this were true, then Robots would be conquering the world like in Terminator or Matrix. In fact a true SMART Factory embraces SMART People, it doesnt replace them. Yes, Automation of both processes and systems will infact reduce the number of people within a business… but it shouldnt completely replace them. 

The goal of a Smart factory is to have smaller, more highly skilled teams that are more dynamic, agile and effective. Smart People that not only run the business… but more importantly do what Automation wont do… OPTIMIZE, INNOVATE and IMPROVE the business.

DIGITAL TRANSFORMATION, if it is neither Industry 4.0, IIOT or Smart Factory… what is DIGITAL TRANSFORMATION? Digital Transformation is the transformation of manually created often paper based processes, information and data into automatically generated digital process, information and data.

So Digital Transformation, A fundamental contributor to the Industrial 4.0 period of time, it uses IIOT to connect, display and manage digital dataIt is both the process and collection of data and information SMART Factory needs to create algorithms and decision trees that automate decision making. As an example, imagine creating a Fishbone diagram on a white board as part of a collective problem solving activity… once complete, it is then the task of a member of the team to then recreate this on a PC and then fill out all the fields to start the evaluation and 5 why process. And if the problem is Customer Quality Concern, then it also needs to be recreated within a customer 8D. So instead of Engineers being on line investigate the possible route causes and implement robust counter measures… they first must spend hours on a PC doing administrative tasks. With Digital transformation, the fish bone would be created digitally online and would automatically create all fields and versions required by both the team and external use… allowing engineers to focus on the problem and solution.

Please remember, digital transformation is an evolution of an already continuously improving team and business… it is not to be considered as a short cut to success. If implemented correctly, digital transformation can be used to further Optimize Performance and Profits, Increase Agility and further empower a successful team to be more efficient and effective.

SMART PEOPLE, it is pointless to buy a Ferrari if you don’t know how to drive. Many businesses make the mistake that they automate and digitalize without having the skills either internally or externally to support both the day to day digital operations and evolution. 

is very interesting that in Germany, one of the leading industrial 4.0 countries, they reported that the main problem most companies in Germany will face is not the technology, but in fact the 85,000 missing skills in IT and Automation that Germany will need for all companies to digital transform. With also training evolving and becoming digitalized, it is becoming much easier to address this problem… if a business understands. With possibility to automate skills training and development and link to many training methods now existing, upskilling any business is a key part of digital transformation.

Training methods companies can use include many practical and fun ways of up skilling any business. Gamification, Virtual Reality, Augmented Reality, Digital Assessment, Online Courses, Video Training… the possibilities are extensive and can be easily embrace and adopted by any business to up skill the right people with the right skills.

It very important to ensure the business has the right skills to embrace this transformation… SMART PEOPLE are critical within a SMART FACTORY!!!

ARCHITECTURE, another critical contributor to digitalizing any business. Many companies make the mistake of making digital applications separate with data in differing formats and locations. This means when trying to recover data or compare data between different applications, it becomes expensive or almost impossible to do so.

BIG DATA and ARCHITECTURE are too often thought about too late… often leading to an almost complete redesign of all applications and configuration tools to ensure all digital data can be used to evolve Digital Transformation to SMART Factory.

Many leading IT and Automation companies will not provide this warning! as they don't provide an all in one solution to fully digitalize a business, then there focus is to sell only their solutions. Which then become very expensive when trying to integrate these solutions to other applications and software already existing. 

It is important to Plan your FUTURE requirements… 3 to 5 year digital evolution plan, creating and detailing the Digital Architecture of your systems, software, applications and BIG DATA. 

With this clearly understood, then it ensures a company can digitalize quickly and effectively.. also ensuring futures decisions, changes and introductions, all embrace and adhere to the already defined architecture. Always think PLUG and PLAY, creating an architecture and infrastructure that allows greater options of interfacing with any technology or system.

HELP, the following steps are a good guideline to any business embarking on their digital evolution,

  1. Plan and Skill
  2. Optimize and Empower
  3. Connect and Automate
  4. Digitalise and Smarten

Good Luck with your Digital Journey a story by KPI Digital Business Solutions as part of KPI Training on @LDPOnline