How to Break Down Barriers to Digital Transformation in Manufacturing

Implementing Configuration Lifecycle Management (CLM) as a platform-based strategy across organizational and functional boundaries

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In our recent whitepaper: “Accelerating Digital Transformation in Manufacturing with Configuration Lifecycle Management (CLM)” [download here], we explored the impact that Industry 4.0 and new customer demands like customization are having on the manufacturing industry. New business models are emerging like servitization, which are demanding new cross-functional processes and a rethink on how products are designed, manufactured, sold and serviced. This calls for new solutions that can provide end-to-end support of cross-functional processes, such as Configuration Lifecycle Management (CLM) that effectively accelerate the necessary digital transformation of manufacturing.

It is worthwhile exploring further how solutions like CLM actually accelerate digital transformation. The single source of truth that CLM provides enables collaboration end-to-end across several functions, which is a necessary first step in enabling true digital transformation.

Let’s take a closer look at some of the barriers to digital transformation and how the collaboration that CLM provides can address these barriers.

“Over the long term, enterprises should build the organizational capabilities that make change simpler and faster. To do that, they should develop a platform-based strategy that supports continuous change and design principles and then innovate on top of that platform, allowing new services to draw from the platform and its core services.”

— Gartner

The importance of breaking down silos and creating platforms for change

In 2018, Gartner provided a list of 6 barriers to digital transformation[1]. These are still relevant today.

The 6 barriers for digital transformation in a graphic

In brief, the 6 barriers are:

  1. A change-resisting culture: “People have to be able to work across boundaries and explore new ideas. In reality, most organizations are stuck in a culture of change-resistant silos and hierarchies”
  2. Limited sharing and collaboration: “Issues of ownership and control of processes, information and systems make people reluctant to share their knowledge”
  3. The business isn’t ready: “When the CIO or CDO wants to start the transformation process, it turns out that the business doesn’t have the skills or resources needed”
  4. The talent gap: “Most organizations follow a traditional pattern — organized into functions such as IT, sales and supply chain and largely focused on operations. Change can be slow in this kind of environment”
  5. The current practices don’t support the talent: “Highly structured and slow traditional processes don’t work for digital”
  6. Change isn’t easy: “It can be technically challenging and take time, resources and money”

As can be seen above, barriers 1,2,3 and 4 suffer from traditional organizational structures and processes. Breaking down these silos and their associated control-based processes is essential, but how can this be done constructively without inciting turf wars?

Barrier 4 is a warning to organizations that want to drive digital transformation from within the silos. It is tempting to focus on upgrading current products and processes to more agile and intelligent solutions. However, even if this were possible, it would require closing a talent gap in each silo that can prove to be a slow process precisely because of the silo-based organization and a reluctance to change existing practices.

As barrier 6 indicates, change isn’t easy. It can be technically challenging and take time, resources and money. Gartner’s proposal for introducing change in a simpler and faster way is to use a platform-based strategy.

“Over the long term, enterprises should build the organizational capabilities that make change simpler and faster. To do that, they should develop a platform-based strategy that supports continuous change and design principles and then innovate on top of that platform, allowing new services to draw from the platform and its core services.”, Gartner, 2018[2]

With a platform-based strategy that can be introduced across organizational and functional boundaries, it is possible to address many of the barriers to change at once and accelerate the digital transformation process.

CLM as a platform-based strategy for accelerating digital transformation

One of the areas where manufacturers are facing major challenges, which requires a digital transformation strategy, is managing complex product configuration. A Configuration Lifecycle Management (CLM) solution provides the ability to manage this complexity and scale as that complexity increases.

The challenges that manufacturers of complex products face involve continuously shrinking product lifecycles and increased customer demands for customization and variety. Products themselves include more software allowing configuration after purchase. Potential configuration options need to be carefully designed and considered up-front and strictly managed once in the field. Service personnel need access to accurate and up-to-date information on configuration options in order to service products effectively in the field.

CLM solutions, such as Configit Ace® powered by Virtual Tabulation®, manage the rules governing product configuration options, providing a single-source-of-truth on which product configurations are possible to manufacture and order. CLM solutions are dynamic and continuously updated with real-time information on component and material availability so that options presented are valid and actionable.

CLM is naturally a cross-functional solution that can provide a platform for collaboration between otherwise siloed organizations and functions. For example, Product Lifecycle Management (PLM) solutions define how products are architected and manufactured. However, definitions of product configuration options can be static and confined to the PLM system. By combining PLM with CLM, it is possible to support a richer and dynamic variety of configuration options and make them available to other functions.

The manufacturing organization can access the real-time information in CLM to ensure that products are manufactured with the latest information on vendor components and materials so production can progress without delay. The sales organization can access the same information to understand which options are available to order for customers. Sales can also add configuration rules that are important to the sales process, but not necessarily important to product managers, such as financing options or payment terms. Finally, the service organization have access to the latest information on product configuration options including updated information on component options for replacement.

While there can be a formal owner of the CLM solution, each function can access the information, define their views so only information relevant to their function is provided and even add configuration options and rules to the CLM solution, which are important to their functions.

CLM provides a strategic platform for collaboration between all of these functions so that product engineering, manufacturing, sales and service can act immediately and with confidence safe in the knowledge that the information available is accurate and up-to-date. CLM thus provides the first step towards breaking down the barriers to digital transformation.

References

[1][2] Gartner, “Gartner Identifies Six Barriers to Becoming a Digital Business” 25 JUL 2018. [Online] https://www.gartner.com/en/newsroom/press-releases/2018-07-25-gartner-identifies-six-barrier-to-becoming-a-digital-business