SUCCESSFUL DIGITAL TRANSFORMATION by Space Dreamer -12- Mr.M.Temel Aygun

How Change Management helps you to hold course

“We live in times in which digitalization is radically changing the business landscape across industries. To remain competitive, businesses around the world  are increasingly investing in digital transformation.”

The failure rates of digital transformations remain high. These failures largely stem from the unique challenges associated with digital transformation, including shifting from the current culture to a more digital, entrepreneurial one, dealing with a lack of digital talent, working in cross- functional teams where silos have been the norm, meeting accelerated timelines due to higher customer expectations, and accepting evolving target states instead of fixed goals. What most business leaders underestimate is that digital transformation is not just about technology: Above all, it is about people. That makes it complex – thus requiring a  new approach for managing the change.

From our experience with digitalization topics, we have  identified three key imperatives in successful digital transformations. These imperatives have shaped our Integrated Change Management methodology:

  1. Instituting an integrated approach across facts – i.e., tangible elements such as technology, processes and social interactions – i.e., intangible elements such as culture and teams throughout  the transformation journey and across the entire company
  2. Living agile by proactively updating change measures to meet both current needs and  overall objectives effectively
  3. Adapting “classic” Change Management levers such as communication, leadership, team setup, training, etc. for digitalization needs

This paper analyzes real cases to provide a deeper, more practical understanding of how digital transformation  can be a success story with the help of Integrated Change  Management. At the end of the paper, you will find insights as well as key recommendations to start your own digital transformation journey with confidence.

“Change Management  is a top 3 concern among executives when entering digital transformation  projects.”

“Digital transformation?  It’s all about the people!”

TOP FIVE CHALLENGES FOR DIGITAL TRANSFORMATIONS

We live in times in which digitalization is radically changing the business landscape across industries. Companies worldwide are facing the challenge of managing the fast and repetitive adaptation of their organizations to suit the volatile circumstances of the digital age. Sooner or later, your business may also be faced with a disruption.

The worldwide digital transformation market is estimated to grow by 20% annually to USD 2 trillion by 2022, from the current size of USD 1.2 trillion, driven by the prospect of significant benefits in customer experience, time-to-market, product quality and operational reliability. However, the failure rates of digital transformation initiatives lie in the range of 60% to 85%. It is perfectly understandable that business leaders are quite uncertain when it comes to digital transformation in general, and about Change Management in particular.

The top challenges we often hear from  business leaders about digital transformations are

  1. CULTURE : There is a lack of openness to digitalization, sometimes even pushback from traditional entities. It takes time for both leadership and employees to adopt the necessary information-sharing mentality and cope with continuously changing conditions.
  2. DIGITAL TALENT : It is difficult to attract the right talent to execute the transformation or fill in new roles. New and existing employees need to grow together and work toward the same goals across the entire organization.
  3. SPEED : There is a need to progress quickly in an environment that lacks complete clarity. Encouraging people to speed up and make their own decisions can subject them to stress.
  4. EVOLVING TARGET STATE : Unlike traditional transformations, the target state continuously evolves due to changes in technologies, processes and roles.  The flexibility required for this approach with its “fail fast, fail often” mentality contradicts the common 100% quality approach of many traditional organizations.
  5. CROSS-FUNCTIONALITY : The impact of digitalization across interconnected business processes is not fully understood. Breaking down silos and linking formerly independent functions often leads to turmoil.

Does this sound familiar to you? A lot of business leaders we spoke with see the need for launching a digital transformation soon in order to prevent being outperformed by their competitors. However, they do not know how to prepare their organizations and employees for what is to come. Therefore, it is not surprising that 46% of interviewed C-level leaders report that Change Management is among their top three concerns when initiating digital transformation projects. They acknowledge that the only way to remain competitive is to create a wholehearted acceptance of digitalization within an organization. Because ultimately, people build up your business, not machines.

INTEGRATED CHANGE MANAGEMENT

“Starting a digital transformation journey without a dedicated focus on Change Management is like  leaving the safe harbor with no knowledge of how  to sail through turbulent waters. Only when a mast cracks and the waves get rough do you notice that you forgot to manage the complex interplays.

To reach your desired destination with a sailboat, you need the basic equipment as visualized on the left. Facts such as technology and processes as well as social interactions influenced for example by culture and teams serve as the sails. Transformation management acts as the boat’s hull to provide the platform and a reliable structure for sailing the transformation in the right direction.

However, to master the challenges of a tough environment with troubled waters, skilled skippers adhere to three imperatives: Align both sails to benefit from the joint forces that quickly drive a boat forward, use a robust, yet flexible boat hull to hold course, and adapt the tools available on board to react to changing conditions.

Keeping the essence of these analogies and our experience with digitalization projects in mind, we created our Integrated Change Management approach to help you navigate your digital transformation journey:

KEY IMPERATIVES FOR CHANGE MANAGEMENT

From our experience in digitalization topics, we have identified the three following key imperatives for Change Management in  successful digital transformations:

  1. INSTITUTE AN INTEGRATED APPROACH TO CHANGE MANAGEMENT by incorporating tangible facts with the intangible social interactions throughout the digital trans- formation journey – from conception to implementation.
  2. LIVE AN AGILE CHANGE MANAGEMENT APPROACH given the context of technology  and people challenges that lead to evolving  target states. Humans often behave and react in unpredictable ways. Hence, Change Management must anticipate and adapt to changing situations to remain effective. Agile means being flexible  at all times to address current needs without compromising the vision.
  3. ADAPT CLASSIC CHANGE MANAGEMENT LEVERS TO THE CONTEXT OF DIGITALIZATION. The set  of levers for Change Management – comprised  of leadership, teams, culture, change story, communication, training, role transitioning  and learning organization – remain the same  but should be tuned to the requirements of digitalization.

See you in next blog with the following topics :

  • Institute an integrated approach to change management
  • Live an agile change management approach
  • Adapt classic change managment levers to the context of digitalization

21.06.2020

Kadıköy, İstanbul – TURKEY

Author : M. Temel AYGÜN, Ph. D. in Aerospace Eng.https://www.linkedin.com/in/mehmet-temel-aygun-1066a514/

Copyright belongs to Author

Determining the target condition – Value Stream Design 4.0 by Space Dreamer (Author :M.Temel AYGUN)

VSD 4.0 serves the designing of the target condition for the future order-processing process including the associated information flows. In the first step, the approach comprises the traditional VSD, which aims to bring products into flow in order to achieve short throughput times. In the second step, there is a check of which stations can be further stabilized and designed to contain less waste through digitalization in order to improve or expand the product flow.

Finally, in a third step, the product and information flows are integrated and synchronized. The basic rule is that initially it should be striven for a robust flow based on process stability instead of digitalizing complex and inherently instable processes.

Execution of traditional VSD

Through VSD, a value stream vision is developed that preferably satisfies the previously formulated targets regarding throughput time, quality, productivity, etc. The approach was established following Rother [6], who describes value stream guidelines. The use of these guidelines results in workstations and processes being capable to fulfill a given work content within the scope of customer takt time allowance. Subsequently, adjoining processes can  be linked with one another to create the largest flow areas possible. Within those “islands of flow” a product or order can be further processed without waiting times. If processes cannot be directly linked (e.g. due to setup times  or different cycle times), they need to be decoupled through pull systems (FIFO systems or supermarkets). The authorization of new orders preferably takes place in one place, the so-called pacemaker process.

Digitally improving product flow

If a value stream vision has been developed in this way, implementation projects are defined that develop the current value stream step-bystep towards this vision. Typically, these projects first address traditional wastes. Fundamental projects are the introduction of standard work and the stabilization of quality. Subsequently, projects follow that bring about the improvement of the material flow, e.g. the line balancing of flow lines, the development of flow layouts, or the organization of a pull-material supply.

Subsequently, digital improvement opportunities through the following questions can be checked systematically:

  • Which traditional wastes can be better eliminated through digital measures? Example: The use of flexible pick-by technologies if material trays are too inflexible for zero-defect commissioning.
  • Which wastes in information logistics can be eliminated by a better organization? Example: Figures and their recording are unified for all machines in a group and used in the morning meeting for the target/actual comparison.
  • Which wastes in information logistics should be eliminated through digital measures? Example: The data for machine availability is recorded directly to the machine control instead of a manual transmission to MES.

Finally, there should be a check of which performance characteristics of the formulated busines model can be supported by the digitalization of the order processing.  Example questions could be:

  • How can the flow be further improved by automating manual planning steps that are repeated for every order?
  • At which point do configurators help in automatically translating customer requests into process parameters?
  • How can the product automatically parameterize work stations in order to further decrease setup times and support standard work?
  • Where does it make sense to assign process data to the product and make them available to the customer?

Integrating the product and process information flow

In the last step of VSD 4.0 the information defined, which is needed (product, process, and resource information) at the stations of the new value stream to implement the vision of order processing without waiting times. To start processes at a station without delay, all required information must be available at the beginning of the order. With this goal, the information needs of all processes are assessed and recorded as ”activities” in the process boxes. The same applies to the support processes like work preparation, intralogistics and maintenance.

Linking of information sources  and storage media

Based on the definition of future informational needs, suitable storage media are defined in cooperation with production-oriented IT and inscribed in the value stream map with the respective horizontal lines. Through vertical lines and the placement of points, a clear and standardized assignment of information sources to storage media takes place. For example, in this step it can be determined that, in the future, all quantity reports are automatically collected in MES. To show this, a vertical line from the data point “quantity” is drawn to the line of the storage medium MES and connected with a point.

In this final step, all activities that use available information are attached by dashed lines. For example, it is determined that the output quantity of every station available in MES is discussed daily in the course of shop floor management in order to recognize deviations and initiate improvements. From data point “quantity”, a dashed line is therefore drawn to the horizontal line of shop floor management and also connected with a point.     

Example application of VSD 4.0

For the already exemplarily observed value stream of the special machine manufacturer, the objective of value stream design is to significantly reduce the cycle-time whilst offering simultaneously high flexibility in the configuration for sales and customers. This is essentially achieved through

  • consistent digitalization of information sharing from the customer all the way to the machines
  • a drastic reduction in manual process steps and the associated processing time (from 6.5 h to 15 min)
  • a reduction of storage media (from 12 to 7) and media disruptions

The new process in detail

On the customer side, an online configurator was implemented that depicts the solution spaces possible in production in the dimensions categories, materials, and measurements. In this way, it is possible for the customer to configure and order the product without further communication with sales or development. The product data generated through the configurator is automatically transmitted to a parameterizable CNC code generator. The new CNC program arrives directly at the machine through the Distributed Numerical Control (DNC).

Until now, the order authorization took place through a push principle. The foreman planed the sequence of the orders according to demand and his own judgement (Go-and-see planning). In the course of VSD 4.0, strict FIFO pull processing now takes place (Fig. 20).

In order to stabilize and further improve the new processes, the figures delivery performance and capacity utilization are discussed in future daily shop floor meetings. In the event of deviations the PDCA cycle is started.

14.06.2020

Kadıköy, İstanbul – TURKEY

M. Temel AYGÜN, Ph. D. in Aerospace Eng.

https://www.linkedin.com/in/mehmet-temel-aygun-1066a514/

Copyright belongs to author.