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The crisis as an opportunity for digital transformation

Published: · Last updated: · 3 min reading time

Steering skills

The consequences of the Covid 19 pandemic are creating new priorities on executive floors. Digitalization is part of the solution. But the principle remains: The digital transformation will only succeed according to the formula “first motivate people, then optimize machines.”

In the wake of the Covid 19 pandemic, the shutdowns in almost all developed economies will have serious consequences. The International Monetary Fund estimates that the world economy as a whole will shrink by three percent in 2020, “much worse than during the financial crisis of 2008/09”. The developed economies are expected to be hit with a minus of 6.1 percent on average.

In the Corona year 2020, the following applies to industry in a very unsentimental way: managers must cut costs quickly because sales have collapsed and current expenses remain high. “Cash is king” is the priority. All other plans must be subordinated to short-term cost management.

The crisis as an opportunity

Crises, however, also hold the opportunity for change for the better. And there is a time after Corona that responsible managers must keep in mind. A digital transformation with a sustainable plan beyond a pure cost focus is necessary. Whether CIP, TPM, or others, the proven principle of modern management doctrines applies: every project needs two wings to fly. For the digital transformation, the formula is: First motivate people, then optimize machines. Managers of successful digital change projects confirm the same: the Smart Factory will only succeed with a comprehensive change process and modern management culture. Therefore, the Smart Factory is a matter for the boss, not just one IT project among many.

Technology 4.0 in production requires transformation culture 4.0 throughout the company. First of all, the employees must be credibly convinced that technological progress makes sense – also in their interest. Only then can the joint task of optimizing processes and products with new technology be tackled.

Be open, address fears

Let’s face it: computers today are superior to all physical senses and abilities of humans – they can calculate, see, touch, taste, smell, reason, lift and move better.

Fears of more technology should therefore be taken seriously. But fears can be countered with facts. For example, digital technology works for a company’s location and jobs, not against them.

In his presentation at an Industry 4.0 event organized by Forcam, Kuka manager Heinrich Munz impressively proved with figures that internationally, unemployment rates are always significantly low where the number of robots per employee in the manufacturing industry is significant – South Korea and Germany, for example. Heinrich Munz’s conclusion: “We need Industry 4.0 for our well-being and the future of our children.”

Securing locations through personal responsibility

Digitization is not an end in itself. Companies want an intelligent factory to increase productivity and reduce costs. In Germany, too, sites have been preserved or production plants brought back because they have significantly increased their productivity through change processes and digital technology, in some cases by more than 30 percent. The teams in factories can contribute directly to such successes. They need to be trained in this. Education is also crucial in any digital transformation.

It means more personal responsibility when people can precisely control processes and products in their area of responsibility via touchscreen, tablet, and smartphone, along with incorruptible analyses. It means more appreciation when people can perform tasks on the most expensive equipment more efficiently and better. It means more motivation when people contribute to the optimal use of equipment on the shop floor and improve ROCE – the return on capital employed.

In this way, digital transformation becomes a way of securing locations and jobs from within the company. It then offers the best opportunities to reduce costs in the short term, manufacture more productively in the medium term, and maintain future viability in a long time.