Implementing a Digital Operations Strategy

Table of Contents

Executive Summary

Introduction

Board Aspirations

Areas of Current Operations
1. Digital Manufacturing
2. Smart Service and Supply Chain
3. Product Development Connectedness

Recommendations

Conclusion

References

Executive Summary

Many business organizations face significant challenges in managing their organizations due to the dynamics and complexities. These complexities include changing customer requirements, changes in the nature and types of demand, competitor actions, customer decisions, and the supply chain uncertainties. The organization prioritizes the goal of achieving flexibility to allow it to achieve competitive factors, such as wide range of services and products, frequent production of new products and services, easy response to the changes in the delivered products and services, as well as the changes in the delivery of products and services timings.

To achieve maturity in the digitization, the company must focus on areas, such as the next-generation manufacturing, product development connectedness, and smart service and supply chain that are critical for the achievement of competitive advantage through flexibility.

Digital manufacturing is aimed at achieving competitive advantage by focusing on machine-oriented solutions, machine data targeting, reduction of downtime, automation, capacity and solutions that target materials, production and labor flows. Digital manufacturing allows the organization to focus on automation that pertains equipment maintenance, remote services, and machine performance.

The smart service and supply chain will also be adopted, which consists of a number of building blocks, such as logistics visibility, horizontally integrated execution and planning, smart warehousing, prescriptive analytics, and procurement. Connectedness allows for better customer feedback, which is incorporated into the product to ensure that the new products take into consideration the actual usage of the products by the customers of the firm.

Recommendations for the organisation to fully implement the digitization operations strategy include the development of the right people that can implement the strategy, the development of a clear structure for the implementation of the digitization strategy. Therefore, the use of the right investments are acquired, especially the resources needed for the development of the systems that support the digitization strategy of the firm.

Introduction

Many business organizations face a significant challenge in managing their organizations due to the dynamics and complexities, such as changing customer requirements, changes in the nature and types of demand, competitor actions, customer decisions, and the supply chain uncertainties. The complexities faced arise not from the businesses’ technical dimensions but from the varied dimensions that are involved (Hill and Hill, 2017). Operations strategy has been impacted significantly by the rise of Industry 4.0. Industry 4.0, also known as digitization, refers to the emergence of human-human interactions, human-machine interactions, analytics capabilities, ubiquitous and cheaper sensors, and robust data that is rapidly pushing the IOT (internet of things) into the operations strategies of companies.

Board Aspirations

There are different aspirations that the board of the firm has which can aid in tracking the progress that has been made. According to Barnes (2008), the five basic aspirations are cost, quality, speed, dependability, and flexibility. Cost is closely linked to the ability to produce the goods and services at low costs, while speed is linked to the ability to respond in a quick manner to the demands of the customer. Speed, therefore, lead to shorter lead times between the time when the customer places the order and time when they receive the service or product. Quality, on the other hand, is closely linked to the absence of errors and production that aligns with the customer specifications. Dependability is linked to the ability of the organization to deliver services and products in accordance with the firm’s promises to the customers. Dependability entails delivering the services and products just as indicated in the published information and in the quotations (Barnes, 2008). Flexibility, on the other hand, can have various aspects, such as the capability to change the operations in line with the changes in production volumes, production times, service or product mix, and introduction or innovation of new services and products (Barnes, 2008). By achieving excellence in one of the above operational objectives, the firm can gain a competitive factor. Barnes, (2008) argued that any single organization cannot excel in all the objectives above simultaneously as such an attempt would lead to the confusion of the operations managers. Therefore, organizations need to choose the operations performance objectives that they can prioritize on. The organization will prioritize the goal of achieving flexibility to allow it to achieve competitive factors, such as wide range of services and products, frequent production of new products and services, easy response to the changes in the delivered products and services as well as the changes in the delivery of products and services timings. The choice is based on the trade-off theory that was proposed by Skinner in 1969 (Barnes, 2008). Skinner argued that operations cannot achieve all the goals at the same time, but a single goal should be identified to ensure that excellence can be achieved (Singh, Wiengarten, Nand, and Betts, 2015). The choice of the goal, such as flexibility, would thus act as the main criterion which acts as the guiding rod for the operations (Barnes, 2008).

Areas of Current Operations

The organization has significantly adopted a number of operations. The paper explores the three areas that can be developed to maturity. The three areas include next-generation manufacturing, product development connectedness, and smart service and supply chain that are critical for the achievement of competitive advantage through flexibility. The organization will, however, not play in the optimization of the capital assets. The choice regarding the non-entry into the above area is linked to the view that the current asset management of the company is efficient as the costs of maintenance have been optimized followed by great safety performance, optimized utilization of assets and high reliability in the operations. The various operations areas of focus that will help the organization to win against the competitors will be explored. Furthermore, the capacities that are needed as well as the management systems that are required to build, operate, and maintain the various key capabilities will also be explored.

1. Digital Manufacturing

Digital manufacturing, also known as next-generation manufacturing, is aimed at achieving a competitive advantage by focusing on machine-oriented solutions, machine data targeting, and reduction of downtime, automation, and capacity. Other aspects that the digital manufacturing at the company will focus on include solutions that target materials, production, and labor flows. The value proposition to the company for the adoption of the various elements include an increase in the capacity, labor requirements reduction, quality improvements at the sigma-six level, and a significant reduction in the various overhead costs (Ghasemi, Taimouri, and Sayadi, 2017).

To develop digital manufacturing, the organization needs to focus on automation that will focus on equipment maintenance, remote services, and machine performance. Further, the organization will also focus on location services based on real-time tracking of people and inventory in the shop floor using technologies, such as GPS and RFID broadband (Alvarez et al., 2016). For instance, in the digital replica, the warehouse dock should focus on the planning, ordering, replenishing, tracking, and receiving the stock thus ensuring that there is excellent customer relationship management, advanced scheduling and planning, and excellent configuration of the price quotes. The system that would be needed at this stage is the customer relationship management (CRM) system. The company already has the CRM system thus highly skilled labor will be needed to ensures that the planning, scheduling, and the pricing is undertaken accurately. The stage of assembling, testing, and fabrication will also require various management systems, such as manufacturing execution systems (MES) and warehouse management system (WMS). The systems will support the objective of flexibility through accurate data capture thus better sensing, actuating, identification and control, as well as monitoring, reporting, measurement, and instructing. The organization will be able to have greater flexibility in the shipping, planning, tracking, fulfilling, and replenishing the various customer orders (Ghasemi, Taimouri, and Sayadi, 2017).

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