Whereas 5 years ago, most people had not heard words like ‘digitalisation’ or ‘Internet of Things’ (IoT), they are now buzzwords that seem to be a must-use in each and any publication. Whenever there is a mobile device involved or a display for the user is built in, the product is labelled as an example of digitalisation or IoT. But is this really the intention of digital transformation? It may be one of the steps on the path to a digital world to try out technical possibilities, to play around with various options, and to test the market readiness. It is also essential that unusual and disruptive ideas are developed and tried out. At the end of the journey there is one goal: creating added value for the company.
Road trip to digitalisation
The challenge now is to find an efficient method to implement value-generating IoT projects. Based on project experience, the following approach will help guide the long journey from initial concept to successful project implementation.
Disruptive view to existing business models
Remember the time when everybody bought clothes in brick-and-mortar clothes stores? Nobody thought about ordering clothes online, with all the supposed obstacles (how do I know if it fits? I need somebody to consult on style). Today e-commerce is the most value-generating sales channel in the fashion business. So, allow open-minded brainstorming and simply collect the unusual and disruptive ideas without judging. Turn a business model upside down.
Sorting out the useful ideas
Having a set of ideas on the desk, it is the right time to separate funny stories from concepts that are worth pursuing. How to set the criteria? Be strict and simply ask about the value proposition for either the company, the client, the employees, or any other party involved in the process. Only an idea that promises value creation will survive the phases to realisation.
Having the idea is nice, but knowing the complete picture of the solution is more helpful. Therefore, in this phase the process steps that support the business idea have to be considered and designed. Keep in mind that there is no business without clear process.
This phase is the first time a technical solution is thought about. It may sound strange, but this is the only way to prevent technology-driven solutions that nevertheless do not create value. From long-term experience, a prototype is a good investment. It allows experimentation with the approach and gives immediate results about the business process and its potential for success. This small investment gives precious results for the upcoming project steps and investment.
Make it real
The idea, the process, and the technology is there: what prevents a business from finally starting implementation? Not too much, but prepare to be confronted with limitations. It could be the budget or a lack of qualified people. To avoid this – and to satisfy the project stakeholders at the same time – break down the full solution into digestible steps and milestones. This provides quick wins, fast results, and a positive mood in the project. At the same time, allow time to test functions within the market and to optimise the project.
Factors in focus
Three key factors have the largest influence on the project environment. These three factors are not brand new to digitalisation projects, but have different topics and weight. They are simply referred to as ‘HOT’ factors: human, organisation, and technology.
Human factors: the most important
When considering human factors, think about the emotions around change, interaction, and security. Some will be more open to the process than others. Digital transformation is especially challenging for human behaviour. In some cases, more responsibility is given to certain people along the process chain. These people need to be aware of and trained for the new expectations, risks, and tasks.
The main change with digitalisation is to maintain mass production, but allow individual treatment at the same time. Whereas factories were organised during the Industrial Revolution to produce parts in series, the winning factor of today is the provision of individual and customised services and products. Moreover, the cost should be even less than in mass production.
Perhaps for the first time in the process of industrialisation, technology is not a limiting factor. The explosion of technical possibilities on a small scale and at low cost is one of the drivers of digitalisation. Technologies have matured and gained intelligence, basically creating the IoT wave. So today the mission is not to find the technology, but more to find the right value-generating use of it.
Use case of horizontal process integration
The story behind this case study is to reduce the logistics effort in dispatching bulk products. The challenge is to satisfy the basic customer requirements of delivering the product in the correct quantity on time, while also keeping the customer informed about the status of the delivery. At first sight this is an easy job, but as soon as it comes to detail the complexity increases.
The basic idea is to open the business processes to the external parties involved in the supply chain. The business case is to allow customers to execute their own planning on a provided web platform. Taking secured access as granted, the benefit for the customer is to have 24 hour access to live data and immediate response on product availability and predicted loading or waiting time. Booking of loading slots online gives much higher planning and forecasting accuracy than before. For the factory, as the provider of the service, this results in a reduction of planning and communication, while lifting customer service to a higher level. But this is just the beginning of process digitalisation.
When the customer request for the delivery is available in the backend system, the service can be extended to self-service check-in and check-out when picking the goods from the factory. Again, this gives higher service for the carrier, whereas the effort on the plant side is reduced.
Overall equipment effectiveness (OEE)
Digital transformation also changes the meaning of distances: global becomes the new local. Far more opportunities in terms of production or sales come up. Production capacities can be seen not only within a plant, but also independently of locations. This gives many more options in exceptional situations, e.g. an unplanned production shutdown for satisfying the customer request within short time. Key performance indicators can be generated easily and benchmarked between different production sites. The value proposition behind OEE is much better use of production capacity by saving resources or budget.
Digital stock management
How does stock management and digitalisation come together? One of the big challenges in quarries is to know exactly what is in stock in terms of product and quantity. This sounds easy, but determining the quantity from a stockpile requires effort and time. Modern image processing allows the creation of 3D models from images taken by drone. Mathematical algorithms calculate from the 3D model the volume and derive the stock capacity. These drone flights and calculations can be done automatically on a regular basis, meaning much more accurate stock levels are provided to planning and dispatching. The technology is ready and other industries are already using it.
Integration of mobile application
Up to now, no technical detail has been described. The reason is quite simple: in a digital world, the business process can be represented in various ways, starting from a platform of simple data exchange to a web-based planning platform, or even as an app running on a mobile device. Once the data integration is ready on mobile infrastructure, further beneficial business processes can be easily implemented. Some examples could be checking health and safety equipment, which results in permission for the truck driver to enter the production site.
Electronic proof of delivery
Typically, the delivery in terms of dispatch and planning is done as soon as the truck leaves the factory, but much more can be done with digital business processes and mobile data representation. Imagine the receiver is able to prove receipt of a specific delivery easily, even online, with the correct geographical coordinates or a picture. This saves a lot of effort on both sides, as there is no complicated paper handling or checking.
Artificial Intelligence (AI)
Whereas AI in the past was a fuzzy and intangible term, it is nowadays present in daily life. With the help of AI algorithms, in conjunction with powerful computing technology, it is possible to handle huge masses of data and to find patterns or structures that are impossible for human beings to identify. Nevertheless, humans are responsible for the final representation and the meaningful use of the results. With the help of AI, it is possible to predict results within seconds, whereas previously it took a variety of experts a long time to come up with the answer. Most of the AI application areas are in prediction through the use of Big Data.
The presence of digitalisation is to be accepted as fact. The only choice is how and when it will be used. This article will hopefully give some helpful hints on how to approach a digitalisation project, as well as some already existing uses, to trigger the creation of future digital business models.
Read the article online at: https://www.worldcement.com/special-reports/06112018/future-technologies/