Why digitalization is much more than a data project
Blog
May 7, 2024
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Digitalization
Ostrich tactics have outlived their usefulness. The wheel of change is turning much too quickly in the age of digitalization for the new challenges to be sat out or put on the back burner.
Industry is acutely aware of its current vulnerability, with 96% of organizations attributing great importance to digital transformation in economically challenging times. This as much to what is being recognized. However, the activities derived from this recognition are truly reason to be concerned. So, although one in two companies – actually, we should say ONLY one in two companies – is stepping up its digitalization efforts, one in three companies admits: “The current situation has no impact on our digitalization plans.” 17 percent are even slowing down their digitization efforts.
These figures from our “Digitalization 2024″ Study” that includes the survey of 417 industrial companies in Germany, Austria and Switzerland make a paradoxical situation very clear: on the one hand almost all companies aware of the high speed of change and the associated pressure to drive their own digitalization efforts forward. On the other hand, every second organization is obviously allowing itself to fall behind, thereby widening the digital gap to its competitors.
As an experienced consultant and project manager in the fields of operational excellence and Lean Management, Dr. Michael Feldmeth holds a doctorate in engineering and is a trainer at Staufen Academy. He specializes in mechanical and plant engineering, automotive and vehicle construction, and medical technology. He has extensive expertise in plant development, factory design and in optimizing direct and indirect business processes.
Michael has experience of restructuring in the areas of production (manufacturing and assembly), logistics and order fulfillment, practical Shop Floor experience and a sound technical understanding of production processes.
Cost pressures must not slow down investments aligned toward the future
And yet, this restraint is also reflected in the responses to the current economic crisis. As such, 63% of these organizations have committed to increased cost-cutting measures and 45% to focusing on their core business. The organizations are even more cautious when it comes to
working on new business models (37 percent),
entering into new collaborations or strategic partnerships (35 percent),
diversifying the range of products and services (34 percent), or
actively seeking new sources of income (31 percent).
In many cases, the current cost pressure is suppressing strategic decisions and future-oriented investments. This is definitely not a solution to the current dilemma that will be successful in the long term. Instead, containing costs by implementing performance improvement measures should be designed in a way that allows the released resources to be used specifically for new business and digitalization strategies.
The ideal instrument for efficiency increase
Combined with traditional Lean methods, digitalization can therefore prove to be a catalyst and an ideal tool for increasing efficiency, even in times of crisis. After all, with the new opportunities offered by data analysis, relevant information no longer remains isolated in a single department but can be utilized across departments and even countries to leverage hidden potential. This more in-depth insight reveals the interplay of individual factors along the entire value chain. The result: tangible positive effects in terms of innovative strength, quality and costs.
Exhausting the full potential of digitalization
The tremendous wealth of information means that companies can identify specific levers with the greatest potential within the process chain or even develop completely new business models. This makes it important to view such a data project not only from a technical viewpoint, but also as a strategic business project. The focus is not on cutting costs quickly, but on implementing Lean processes and avoiding waste. An efficient value creation is the foundation that the entire transformation is built upon. For example, without operational excellence, there is a risk that bad processes are digitalized and that waste is created elsewhere. The huge potential of digitalization would therefore not be fully or only partially exploited.
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As an experienced consultant and project manager in the fields of operational excellence and Lean Management, Dr. Michael Feldmeth holds a doctorate in engineering and is a trainer at Staufen Academy. He specializes in mechanical and plant engineering, automotive and vehicle construction, and medical technology. He has extensive expertise in plant development, factory design and in optimizing direct and indirect business processes.
Michael has experience of restructuring in the areas of production (manufacturing and assembly), logistics and order fulfillment, practical Shop Floor experience and a sound technical understanding of production processes.
The Staufen study “Digitalization 2024” shows how difficult it is to exploit the full potential of data. The study underlines the need for a data-driven strategy and professional data analysis and points to a lack of expertise, resources and a data-centric corporate culture.
