Digital Transformation A Manufacturing Perspective

1. eBook Digital Transformation A Manufacturing Perspective

2. Table of Contents 1) Introduction………………………………………………………………………………………….. 3 • About the eBook 2) ManufacturingIndustry on The Thresholdof a New Revolution…………….. 4 • Small and Mid-Size Manufacturing Firms Surviving the Industry 4.0 Revolution • Strategies for Manufacturing Firms to Make a Smooth Transition to Industry 4.0 3) Embarking on Digital Transformation Journey………………………………………… 6 • Two-step Digital Strategy: Enhancing Operational Capabilities and New-to- Market Efficiencies • Collaborate to Resolve and Conquer • Building a Robust Platform to Increase Process Efficiency and Collaboration 4) Accelerating the Digital Journey……………………………………………………..........10 • Case Study Research 5) Re-architectingNew Ecosystem-Whereto Begin From?........................... 12 2 Title of the book

3. Introduction This eBook explores the trends of Industry 4.0 and what opportunities and challenges manufacturers must face to sustain and grow in the market. In the eBook, it has been discussed how digital transformation can help small and medium-sized manufacturers to reshape their business process and process to enhance process capabilities and achieve expected customer outcome. Since digital transformation also requires a technology culture and collaborative ecosystem within and outside the organization, in this eBook, readers will find a discussion on the effective implementation of technology to enhance collaboration and a case study research on how renowned manufacturershave transformedtheir businessesto attaintheir business objective. It will help the readers to: ▪ Understand changing manufacturing industry. ▪ Assess the capabilities of manufacturers and need to begin digital transformation journey. ▪ Identify the key benefits and prevailing best practices to implement digital transformation solutions. ▪ Find the opportunities and how manufacturers, regardless of size, can capitalize opportunities rapidly. the dynamics in the growth on the 3 Digital Transformation – A Manufacturing Perspective

4. Manufacturing on The Threshold of a New Revolution The changing dynamics of the manufacturing industry, such as high-level of competitiveness and emergence of new technologies is increasingly forcing the companies to review their business processes. During the first Industrial Revolution, beginning from somewhere in 1760, there was a transition from hand-based production methods to machines. A similar transition can be experienced today where mostof the manufacturersare movingfrom machinesto Smart Machines. These Smart Machines are now switching places with humans; the benefits are improved speed, high efficiency, low cost, and excellent collaborative environment; everything that a manufacturer wants. The transition from machines to Smart machines has a vision of interconnected factory, comprehending with the trend of automation, data collection, and data sharing. The dependence on humans is declining with advancing manufacturing technologies, including Cyber-physical Systems,IoT, Cloud Computing,and CognitiveComputing. This advancement turns a factory into Smart factory, enhancing the capabilities of machines to communicate with each other and with humans, and that too in real-time, both within and outside the organization. Small and Mid-Size Manufacturing Firms Where big giants quickly transform their practices Surviving the Industry 4.0Revolution and processes, after analyzing the impact, the The process of change behind revolution is small and mid-size manufacturing companies face not instant, it begins with a new the real challenge. Maintaining the same perspective, followed by breakthrough ideas, standards of information transparency, getting and implementation, adoption, and the technical assistance, and supporting the overcoming the challenges. Here, adoption decentralizeddecision-making. of the technology is vital, as only those technologies are adopted which are convenientandcost-effective. In the case of Industry 4.0 revolution that was first used by the German government in their effort to computerize the manufacturing processes and was later revived at the Hannover Fair in 2011, and gradually leading manufacturers began implementing the idea, which was received well by small manufacturing entities and consumers. 4 Digital Transformation – A Manufacturing Perspective

5. Improving Coordination and Knowledge Exchange: Sharing and exchange of knowledge can help companies remain updated and identify the change to better accommodate in the future. An essential part of future planning, coordination and knowledge exchange on the levels of government, experts, and business will empower the manufacturers to spearhead policymaking on the grounds of Industry 4.0. Strategies for Manufacturing Firms to Make a Smooth Transitionto Industry 4.0 Support Research and Development: Small ventures can take the assistance from third parties to engage in constructive research and development work that could help in understanding the business trends and requirement of the customers. These strategies are extracts from the proposals and policies set by the most innovative country in 2017, according to Bloomberg, South followed by market supportinga “SmartFactory”. Emphasis on the Development of Skills: Skill development to cultivate human resources that can work with new inventions will enable the small and mid-size manufacturers to adopt automation easily. Focus on Improving Processes: Small manufacturing ventures need to focus on their end- to-end processes to identify the gaps and introduce automated processes for different company functions. Korea, trends Enhance Information Management:Companies need to create a bridge between management and production teams and make available information wherever required. This will help them to increase accountability and traceability, while also increasing overall performance. Create a Digital Environment: Develop a committed leadership to manage a transition to the digital environment that could connect your consumers with new products, services, and platforms. In an appropriate digital environment, manufacturers can enhance the speed with which they reach to their customers, identify their preferences, and can meet their needs. 5 Digital Transformation – A Manufacturing Perspective

6. Embarking on the Digital Transformation Journey In order to withstand the new wave of innovation and take the lead, manufacturers need to adopt innovative practices to maintain the level of quality and reach out to their customers in fastestand flexible way possible. Before a manufacturing company embark on their digital journey, they must understand their paths are not the same as companiesfrom other vertices. If you see the results of Harvard Business Review Analytics Services Survey, December 2016, you will find that only 27% of manufacturingcompaniesfeel their industry will be disruptedby digital trends. Image Source: https://www.clickz.com/the-rising-opportunity-of-digital- transformation-what- businesses-need-to-know/110987/ 6 Digital Transformation – A Manufacturing Perspective

7. This is because most manufacturers lack how digital transformation can help their business grow. In 2017 study by Boston Consulting Group, researchers revealed that process manufacturers and to some will rely on these three drivers of IoT: extent discreet manufacturers Predictive Maintenance: It will help material cost saving, reduce equipmentdowntime,and maintenance planning time. Self-Optimizing Production: Managing and optimization of the production process in real time through interconnected factories and supply chains. Automated Inventory Management: Generate insight into the status of inventory and supply chains to speed up the response time and enhance in-time production. These drivers form the base for automation and integration with the machine and modern systems to create a collaborative environment and technology culture within the organization. It will help them to speed up the response time to incidents, develop adaptable processes, and empower their employeeswith the right capabilities. communication Two Step Digital Strategy: Enhancing Capabilities and New-to-Market Efficiencies Operational New to the Market Efficiencies: Improving Operational Capabilities: For companies industry verticals like communication, retail, and education, the value they expect from digital transformation and the ways through which they can different the way a manufacturer can extract the benefits of a digitization of business. from Effective communication with customers can increase new-to- the- market efficiencies. For the same, achieve it is completely manufacturers need to connect with their customers and vendors to share information and analyze their Manufacturers are required to focus on enhancing operational capabilities with respect to people, process, and machine to achieve their digital transformationobjectives. their preferencesand feedback 7 Digital Transformation – A Manufacturing Perspective

8. Buildinga RobustPlatformto IncreaseProcessEfficiency and Collaboration Collaborate to Resolve and Conquer Data collected by a Market Intelligence Company, Aberdeen Group, reveals that top-performing businesses are innovating their business processes to reduce friction and enhance flexibility. According to this data, around 46% of are promoting collaboration and 29% are focused on achieving goals than followingtraditionalprocesses. The key takeawaysare: 1. Collaboration business units 2. Task based on goalsrather than processes 3. Creating intelligentWorkflows 4. Making the businessprocessmore efficient 5. Decreasingresponse time 6. Digitize processes between business processes and Modern understand that innovations are not the revolution instead form the very core of the technology, which is to remove complexity convenience. Since technology change is a permanent phenomenon, they need to prepare themselves to move the way forward, reluctance. day manufacturers must and promote To accomplish this, manufacturing firms need a robust technology platform integrated with business unit that bring together every stakeholder involvedfrom suppliers to customers. processes and with little On to this connected platform, information whether it is about processes or business employees, everything can be shared. Besides, it could provide us with the details of the real-time situation and generateinsight into the processes. units, customers or From the digital perspective, they need to recognize that simply building a digital business won’t do, rather they must focus on creating operating models and value supply chains, which create more value for thebusiness. According to the latest Accenture survey of executives, only 13 of companies are taking out maximum benefit from their digital initiatives for higher efficiency growth. and increased Source Aberdeen Group 2015 8 Digital Transformation – A Manufacturing Perspective

9. To enable companies to build technology platforms for their business value and cost, we, at Finoit, combine technology and econometrics. Recent findings from the MIT Centre for Business show that companies which have embraced digital transformation are 26 percent more profitable than their average industry competitors and enjoy a 12 percent higher market valuation. Our reinvention of processes and practices to lower the costand drive top-linegrowth are: Creating Smart Applications: Through smart applications, create self-monitoring processes, generate data, identify the change factors,and predict the future. Data-Sharing Connected Platforms: Develop a collaborative environment among people, processes, and machines in real-time with the help of data sharing platforms. Help Develop Enterprise-wide Technology Culture: With custom-built applications, instil an technology culture with the focus on increasing speed and efficiency. enterprise-wide Creating Valuable User-Experiences: Promote adaptive interactionsto create valuable experiences for customers. According to PWC, out of 2,000 manufacturers, 86% expect to see cost reductions and revenue gains from their digitization efforts over the next five years. 9 Digital Transformation – A Manufacturing Perspective

10. Accelerating The Digital Journey According to the 2018 KPMG Harvey Nash CIO survey, 78 % of nearly 4,000 CIOs worldwide say their digital strategy is moderately effective or worse. Based on the survey, it has been revealed that most of the companies do not focus their digital strategy across the enterprise to enhance the deeper operational capabilities, rather only on front-end. To truly adopt Digital Transformation, it is essentialfor the companies to focus on thefollowing Develop Digitization can help enterprise capability to achieve and currentoperationalgoals. capabilities in operations: you integrate total strategic Business Analysis: Through proper business analysis, output, performance can be analyzed to increase the efficiency of the business unit and close the gaps. resources, and Building Robust IT-Business Relationship: The IT personnel of the business must be aware of the business should promote initiatives to help achieve the goals. According research, embraced transformation strategy and also seen as high performers in services have seen an increase in their profit margins of over 20%. to 44% Oxford of well Economics/PTC companies defined objectives and who digital Promote Governance: Create a digital strategy that is focused on engagement, and governance to help a culture of performance and uniformity amongemployees Vision, Engagement, and promoting vision, 10 Digital Transformation – A Manufacturing Perspective

11. Case Study Research Here’s a list of manufacturing companies from our intensive research that has created a balance between core production systems and people through effective digital strategy. Facilitated Collaboration and Derived Insight from IoT Data Coats Group The company moved its computing, data, and files to the cloud to reduce its dependency on hardware. The attempt of the company can be defined as moving from “industrial age to the digital age" to improve its security, enhance forecasting keeping itself updated. capacity for servers, and The company is also building a data lake to generate insight from its IoT data and predict inventorycosts. . Built a Digital-Ready Workforce Nissan’s CIO Tony Thomas focused on creating Workplace” to streamline and unify business units. His team is also mobile-enabling employees so that they can access corporate applications from their Smartphones and tablets. a “Digital its previously siloed Moreover, he also refined Nissan’s ERP information flow freely but generate business insight. . systems to help safely between systems and Lean and Agile Principles to Create a Sense of Urgency and Business Transparency The CIO of this 150-year-old manufacturer of ceilings, Dawn Kirchner-King said that adopting lean and agile practices introduced transparency, which increased their confidence in what they were doing. As a CIO, she upgraded Financial Applications and migrated travel management to Concur. Apart from investing in a new website, she also explored analytics to enable Armstrong anticipate quality issues with its manufacturing process 11 Digital Transformation – A Manufacturing Perspective

12. Re-architecting New Ecosystem- Where to Begin From? Why Finoit? Finoit has extensive experience in If being a manufacturer, this question frequently comes to your begin with you can strategy. mind, then to follow this two-step creating applications that empower decision-makers to analyze and compare gaps in processes and capacity and support 1) Analyze the real-time situation of your identification of opportunities and risks. business behaving in the current market Further, we can help you drive new scenario. opportunities and create personalized experiences for your employees and 2) Engage into application development to customers. We are trusted by more than 400 companies capture data into descriptive, diagnostic, from different verticals, including small and prescriptive, and predictive information. medium-sized enterprises to create data- drivenapplications. References https://bit.ly/2OuBftY https://accntu.re/2MGtPC6 12 Digital Transformation – A Manufacturing Perspective

13. Finoit is transforming how global enterprises address their business execution demands and problems with implementation of mission- critical applications. India Office With implementation services using web, mobile and IoT development technologies, we have delivered growth, process optimization, and awesome digital experiences to customers North America, Australia. our technology consulting and A 48 – 2nd, 3rdFloor, Sector 64, NOIDA – 201 301 Phone: +91.120.411 2386, +91.120.422 9345 over 250 Europe and US Office To know more and get the best out of your project, contact us today to discuss our services, your requirement and how we will address it. 400 E Royal Lane, Suite 290, Building #3, Irving TX 75039 USA Phone: +1 214 214 4510 For more information, visit www.finoit.com 13 Digital Transformation – A Manufacturing Perspective