The success of a 4.0 transformation is strongly dependent on the initial conditions

The success of a 4.0 transformation in manufacturing (and industry at large) is particularly dependent on the initial conditions for its implementation. The “founding fathers” of Industry 4.0 and the organizations who help its implementation soon recognized the importance of a suitable “ground” as well as a number of prerequisites for a 4.0 transformation to succeed.

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Aiming for such an ambition without regard for the initial conditions is taking chances. An all the more incomprehensible gamble as the warnings in this regard are… numerous!

At a macro level, the prerequisites for a 4.0 transformation are :

  • a sufficient digital literacy on the one hand and
  • an already efficient organization on the other.

In case of lacking digital literacy, there is a risk of entrusting powerful and sometimes complex digital tools to employees who will not be able to use them to their fullest extent, hence missing to reap the full benefits of the digital transformation.

If the organization is not already efficient, the addition of new digital processes and tools, a kind of “high-tech plating”, may be hampered by inadequate practices, structural under-performance and wastes.

Digital literacy

Digital literacy is the ability to understand and master, to some sufficient level, digital tools and information technologies. With the spread of smartphones and tablets in homes, as well as the increasing use of digital services in everyday life, digital literacy has made considerable progress in the general population.

However, the use of 4.0 tools in the context of the enterprise requires more understanding of these tools and systems than everyday applications. It is nothing less than driving or supervising complex industrial processes that are more and more – if not fully – digitized and virtual.

The required digital literacy is also about understanding the importance of data, from collection to processing and the desired or possible outcome of the analyses. Something that is far from obvious considering actual practices of sales meeting feedback, maintenance reporting or master data management for example.

On the shop floor, the switch from nearly fifty years of continuous improvement and problem solving using causal analysis to identify the problems root causes with relatively little data to big data and correlation analyses, can catch many people unprepared and unable to contribute as actively as they did.

We can see through these few examples that deciding a digital transformation and dedicating technical investments are far from enough to succeed. A digital “culture” capable of implementing and sustaining it is one of the prerequisites.

An already efficient organization

The second particularly influential set of initial conditions is the efficiency of the organization’s processes. A digital transformation can be a great accelerator, a catalyst and in some cases a disruptor, able to propel the organization and its performance to another dimension. If the prospect is exciting, it is still necessary to prepare the transformation so that it does not magnify bad practices, under-performance nor waste!

Here is the place to remind Bill Gates’ often quoted warning: “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.

If unaware of this reality, there is a risks of candidly automating and “improving” useless operations or broken processes, thus amplifying and accelerating “production of waste”. Conversely, real and sustained improvements made ante digital transformation are evidences that the organization and its stakeholders are capable of challenging themselves and strive for overall improvement of performance.

In the absence of an already efficient organization and in order to take full advantage of the benefits of 4.0 or digital transformation, it is strongly recommended to prepare it, in particular by critically reviewing all the existing processes as to their necessity, usefulness and the relevance of their automation.

Prerequisites and readiness audits

In order to assess the readiness for a 4.0 or digital transformation, readiness audits are strongly recommended. These audits compare the actual practices, the organization’s maturity against a standard reference. The standards are generally developed by each of the organizations that offer such services, but overlap and converge most often.

Such readiness audits should not be considered as an option, but as a preliminary step to the envisaged transformation, precisely because the success of a transformation is strongly dependent on the initial conditions.

The typical outcome of such an audit is a rating of the organisation’s readiness on several key points, critical to the transformation success, and a proposed roadmap to close the gaps and engaging the transformation.

About the author, Chris Hohmann

About the author, Chris Hohmann

View Christian HOHMANN's profile on LinkedIn

One thought on “The success of a 4.0 transformation is strongly dependent on the initial conditions

  1. Hi Chris,

    Good points to pay attention to in this article. Leveraging technology in the most efficient and effective manner possible has been something that organizations have had to content with since at least the mid-80’s. The only difference between then and now is the fact today’s technologies are much more encompassing in terms of what can be done and how it can be done. Everything from mission-critical applications to leveraging the internet-of-things to robotics/automation, to virtual reality, to big data. All these, and more, represent opportunities to do things differently than they’ve traditionally been done. HOWEVER, as Sy Syms (a famous men’s clothing entrepreneur and philanthropist) would advertise on the radio and was known for saying… “an educated consumer is our best customer.” In essence, it takes an educated consumer to make wise investments in today’s world of technology. Just as it has been in the past, it can be a PANDORA’s BOX (of horrors), and anyone who opens it without being prepared for what’s inside is likely going to be in a very rude awakening.

    Like

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