Digital transformation success is more than just buying the right tools

Aug. 19, 2022
In this Big Picture Interview, learn how to use digital transformation as a tool to improve the business, not to drive technology inside the business.

Eric Whitley is director of smart manufacturing for L2L, with a background in lean manufacturing and total productive maintenance. In January, L2L surveyed 125 manufacturing leaders with mid to C-level titles across production, operations, engineering, IT, and management to uncover the state of digital transformation in manufacturing. Highlights from the survey are available at Plant Services Editor in Chief Thomas Wilk spoke with Whitley recently about the secret to successful digital transformation.

PS: You emphasized that digital transformation, the way that L2L is looking at it, is a business initiative and not a technology initiative, and I think that’s an important distinction. Could you talk about the difference it makes to see digital transformation through that lens?

EW: One of the things that we have noticed or we have seen from a success story is that the clients that we have that are using digital transformation as a tool to improve the business – and not necessarily a tool to drive technology with inside of the business – are getting a much higher return on their investment. Because they understand that the process of transforming technologically is about solving the problems out on the shop floor, not necessarily just putting devices or chasing after one of the high-end terms, either AI or augmented reality. If they use those things and try to chase after those, they lose sight of the business improvement side of it. What we’ve seen in this process is that those people who understand that “this is a tool that we’re going to use to get better as a business” are the most successful ones when it comes to the return on their investment in this process.

The ones that really have a difficult time are the ones that approach it from a technology standpoint, because of a couple of things. They’re spending a lot of money upfront to catch up technologically, right? They’re spending a lot of money on devices, on infrastructure, on resources, all of that. And because they’re not focused on the business, they’re not seeing a quick or a sustainable ROI. And so, people lose interest in it, because they think, “well, this is not really working.” Those companies that are concentrating on it from an improvement initiative are the ones that are going to be successful.

Big Picture Interview

This article is part of our monthly Big Picture Interview column. Read more interviews from our monthly Big Picture series.

PS: Let’s go to the survey itself. What were some of the data points that jumped out to you and the L2L team as being important and meaningful?

EW: The first one is that only really about 24% of manufacturing actually have a digital transformation strategy. There’s some supporting data within that, that makes sense if you understand that. One of them is, who do you look to when it comes to helping you? Well, if there are no strategies out there, then people are turning to consultants, right?

I draw the parallel a little bit here, Tom, I go way back with lean. You know, in the beginning of manufacturing, when nobody knew about lean, lean consulting was a big deal. Now it’s a little more difficult to be a lean consultant because everybody knows about it.

So I think we’re in that stage with digital transformation, is that people and organizations don’t have a strategy, so they’re reaching out and grasping for, “How do we do this? I know we need to do something but how do we actually go do that?”

And then a couple of other data points that support this is that about 75% of the folks that we surveyed believe that their competition is ahead of them when it comes to digital transformation. So they know they need to go do something, they just don’t know what to do. That’s really been big for us from L2L standpoint, to be able to say, “Okay, what we’ve got to do is we’ve got to be able to communicate with our clients, our potential clients, that there is a strategy, there is a way to actually go do this.”

If you don’t have a strategy, if you don’t understand where you are, and where you need to go, then you’re going to have fear of missing out, right? The key here that we see is that you’ve got to have a nice, good pragmatic approach to implementing this stuff. Don’t panic, don’t go spend millions of dollars, don’t go off hiring a fleet of engineers to go install IoT devices, because that’s not going to get you where you want to go.

You want a very methodical, pragmatic approach to implementing this technology, and then you’re going to get to that point. Don’t try to jump there, you know what I mean? So that’s been something that we’ve found as well.

This story originally appeared in the August 2022 issue of Plant Services. Subscribe to Plant Services here.

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