Last year, as manufacturing companies struggled to adjust to the pandemic, manufacturers were reminded of the need for digitalization if they want to survive and thrive in a world driven by continuous disruption.
So far, 2022 is continuing along the same lines, compelling digi-skeptics to flush their doubts down the drain. The challenges faced by operations managers — including geopolitical crises and international sanctions, soaring raw material prices, stricter environmental regulations and an overall increase in the standards demanded by customers — mean that adopting modern digital technologies is a matter of when, not if.
Indeed, the shock of COVID has accelerated the need for manufacturing companies to go digital. IBM’s “2021 Digital Transformation Assessment” finds that 67% of manufacturers have accelerated their digital projects as a result of the pandemic. Words like “efficiency” and “resiliency” are now at the top of their agenda.
Yet it is one thing to acknowledge the importance of digitalization, and something else to execute it successfully. According to a recent report by Deloitte, 70% of digital transformation projects fail and, even for those who succeed, it can be years even before they start delivering results.
The question that every manager should be asking themself is: how can I make sure that my digital transformation program belongs to the 30% that succeeds? How can you make the process efficient so not only shareholders, but also customers, see the results as quickly as possible?
To achieve this goal, organisations and software vendors need to work with ‘ontologies’, representing the data and relationships relevant in the manufacturing and supply chain contexts. An ontology is a formal description of knowledge as a set of concepts within a domain and the relationships that hold between them.
An ontology allows users to get answers to their questions around concepts like customer, purchase and work orders, and, most importantly, understanding how they are interrelated. With ontologies, users do not need specific data science skills to be able to get the answers to help them in the daily operational decisions.
Having your data organized around business concepts and workflows allows taking optimum decisions that are aligned with the overall business strategy. In this way, data supports strategy execution, even at the level of micro-decisions.
We see this happen with Pelico users very often. Once they realize our platform helps them avoid a constant fire-fighting mode and reach their targets more efficiently, their initial reluctance stops being a barrier. When the “why” becomes clear, other elements fall into place.
Nowadays there are thousands of companies dedicated to developing, testing and implementing solutions to problems that once had been thought unavoidable. Not surprisingly, nearly three quarters of manufacturing leaders (73%) say that promoting collaborations with start-ups is part of their long-term business strategy. The same survey, however, shows reluctance at doing so in the next 12 months, despite a huge majority of those having done so admitting they would gladly do it again. But if you want to thrive in an industry that is changing at giant steps, you better follow the example of the latter.
As the World Economic Forum points out, the choice is clear: companies that are not able to go digital face significant risks of business continuity. But make no mistake—behind the technology, there is the need for people. If there is one thing that can hinder the success of a transformation process, that is management’s reluctance to change. To avoid that, we need a mentality change. The goal of a digital transformation is not just to survive, but to unlock new business opportunities and thrive in the future.
What do you see as the main success factors in the digital transformation of manufacturers?
Cut through the fog of uncertain operations and empower teams achieve predictable outputs
Reach out to contact@pelico.io or book a discovery call
Cut through the fog of uncertain operations and empower teams achieve predictable outputs
Reach out to contact@pelico.io or book a discovery call
We help operational teams to make performance leaps through better data exploitation