Author: M.Temel AYGUN

Lean production often appears as an approach that comes from the large-scale production of automobiles and from time to time reaches its limits in the project business of machine and system engineering. A high percentage of customer individuality, a low repetition frequency of activities, and extensive work contents impede the standardization of procedures and thereby prevent the basis for a sustainable introduction of lean. Especially the aspect of overcoming these limits through digital opportunities will play a role in the following chapter. For each element of the TPS the underlying mindset will be briefly introduced and where the practical implementation often reaches its limits will be shown. Subsequently, the opportunities for overcoming these limits within the context of digitalization and Industrie 4.0 will be presented.

Stable and Standardized  Processes

The stabilization and subsequent standardization of processes is the foundation for continuous improvement processes. The recognition of deviations is only possible through standards with a continuous target/actual comparison. Stability and standardization are furthermore the prerequisite for running further TPS elements, such as flow production or the triggering of PDCA cycles. Therefore, stability and standardization build the foundation of the TPS.

Limits of Stable and  Standardized Processes: Customer-specific individual products cause a high processing effort from sales to adjustment development, purchasing, and work preparation all the way to production and service. The creation of standard work instructions for individualized products and their components is time-consuming and error-prone. The processing and cycle times vary both in production and in all other areas. Frequently changing processing tasks mean that it is almost impossible to set times for workplaces and systems. But without standard specifications, deviations and underlying problems can hardly be recognized.

Opportunities through digitalization and Industry 4.0 :

• Opportunity 1:  Extend standard work in  customer-individualized production: Analogous to the structure of the product program, related work and process standards can be modularized and digitalized. Subsequently, the work documents are adaptively configured for each of the products to be produced and digitally made available to the operator on-site. In this way, quantity and time per unit can also be specified for non-series production. These adaptive work standards, in turn, are the basis for managing deviations as a foundation of continuous improvement processes.
• Opportunity 2:  Reducing effort in production preparation, avoiding mistakes during execution: The modularization and digitalization of work instructions means increased initial effort, but subsequently reduces work preparation effort for individual orders. Digital worker assistance systems provide the current information and thereby avoid improper processing caused by outdated paper documents. This way, paper will continue to be increasingly replaced in production by networked, electronic media. At the same time, assistance systems (e.g. pick-by technologies in commissioning) can avoid or recognize wrongful acting. Thereby, quality can be improved, order throughput time be reduced and flexibility be increased.
• Opportunity 3:  Increasing the reliability of machines: Many companies measure the efficiency of their machinery and equipment and record the reasons for loss. Regardless, unplanned breakdowns still occur. The targeted equipping of existing systems with networked sensors can help to detect critical conditions (contamination, filling levels, wear and tear) at an early stage and to plan the maintenance or replacement of components in good time (e.g. during the next planned maintenance shift). The next predictive level of maintenance can be reached with machine learning. Through the linking of a machine’s condition data with labeled event data (dimensions, surface areas, tool breakage, etc.), connections can be found and future events predicted.

Visual Management

The visual representation of process conditions and performance as well as standard procedures and work documents provides employees and management with the opportunity to recognize deviations immediately and without additional aids and activities. A good visualization makes standards simple and easy to understand through optical elements without additional tools so that no deviation keeps consealed. The identification of deviations is in turn a trigger for continuous improvement processes.

Limits of Visual Management: Manual recording, continuous updating and subsequent visualization of key figures is time consuming and error-prone. The performance of a process is often only recorded at the end of a shift or a week. This wastes valuable response time for managers and employees.

Opportunities through digitalization and Industry 4.0

• Opportunity 1:  Early detection of deviations –  Employee perspective: Important information about one’s own process can currently be made available to the employee directly at his or her workstation or anywhere else. In the simplest case, this is the current target/actual performance comparison (e.g. for number of units/productive time and scrap/rework time). This way, the employee can react or escalate in a timely manner. By expanding information to a simple trend analysis all the way to the prediction of deviation (realized through machine learning), the employee can engage proactively before negative effects on the process occur. Already today, for example, the failure of tools can be predicted. Depiction can take place, depending on the user, on-site via monitor, smartphone, or directly on a smart wearable (watch, glasses, etc.). This way, information can be made available directly to the respective employee.
• Opportunity 2:  Early detection of deviations –  Management perspective: Through the digital and direct provision of actual values, trends, and prognoses, management is provided with the opportunity to intervene more quickly. The daily meetings on the shop floor can be supported by the current values of important workstations, machines and systems, which are sent via radio technology directly to a device. Escalation cascades are pushed beyond the limits of manufacturing execution systems (MES) or enterprise resource planning systems (ERP) and management can provide support early on, reallocate resources, or situationally find solutions.
• Opportunity 3:  Solving problems more quickly with digital shop floor management: In daily shop floor meetings, above all, it is about recognizing target/actual deviations and describing these for the subsequent problem solving as comprehensively as possible. Figures, measurement results, and process data provide help and enrich the structured problem definition. Their digital measurement can bring about a temporal relief. The far greater benefit of digitalization lies in the possi bility of detecting relations between deviations (e.g. product defects) and the associated process data (such as temperatures, power consumption, feed forces, etc.). In this way, the point at which the error occurs can be narrowed down more quickly and more reliably. Utilizing documented digital PDCA cyclesenables  a networked search for similar events and thereby successful solutions.

Levelled Production

The direct transfer of fluctuatingdemand to production leads also to a fluctuating capacity utilization. This results in provision of additional capacity, unused capacity, as well as continuous plan changes, also in supply. The stronger the fluctuation of capacity, the harder it is to adhere given standards and processes, with the corresponding consequences for quality  as well as managing deviations. Therefore, through levelling and smoothing, the planning of production is decoupled from the market demand to a certain extent. This takes place, on the one hand, with a view to the overall capacity of production, in which orders are planned only until the attainment of maximum capacity. On the other hand, orders are scheduled with a smoothing pattern (“mix”) so that individual stations are not overloaded while others are simultaneously underloaded.

Limits of Levelled Production: Levelling and smoothing fluctuating demand for customer-individualized products is a challenging task. This is mainly due to the very different character of products and the associated fluctuating load of individual workstations or production areas. In this environment, master data, order data, resource data or project data are barely maintained or not available. Furthermore, available resources are unknown when decisions on the quantities and deadlines are made. Cooperation between sales, customization development and work scheduling is not synchronized, which is why customers are promised orders that cannot be realized within the specified time frame.

Opportunities through  digitalization and Industrie 4.0

• Opportunity 1:  Making better decisions in sales: For the even planning of orders, it is already necessary in sales to estimate a new project’s capacity requirements in individual areas or at different locations and to synchronize it with the available capacity. The basis for this is on the one hand the division of the available capacity into so-called capacity buckets On the other hand, maintaining bills of material and standard times in the ERP system is needed. While this is a standard function of current ERP  systems, the great opportunity lies in making the capacity available for sales via a mobile frontend. Within a time frame (e.g. one week), only a certain amount of orders is confirmed until the associated capacity bucket has been exhausted. This way, customers can be promised more realistic delivery dates and throughput times decrease, as the inventory of already begun orders is avoided by less rescheduling.
• Opportunity 2:  Better utilization with simpler planning: For certain product properties, a solution space can be defined that can be mapped by production without major planning and set-up effort. Configurators enable the sales department or even the end customer to find their individual solution based on rules. If the affected production system is prepared for all parameter combinations without major set-up effort, customers can book the next free deadline for their orders themselves. There is no need for the creation of engineering drawings, the writing of offers, as well as activities in work preparation.   
• Opportunity 3:  Self-organized pull planning: In defined segments of production (e.g. final assembly), free workstations can pull the next suitable order from a reserve of released and prepared orders. This is supported by automated guided vehicle systems (AGV) which transport the preliminary product and the required material to the next free station. The goal is an efficient and even use of available capacities.

See you in next blog with the following topics :

• Takt, Flow, Pull
• Autonomation / Jidoka 
• Continuous Improvement Process (CIP)

17.05.2020

Kadıköy, İstanbul – TURKEY

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

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

Copyright .

OLAYLARIN ARDINDAN

Azami Sürat

Author/Yazan : Numan Bayraktaroğlu

Bizim Darıca’nın şehire giriş yeri ile Yalıya çıkış yerinde, trafik teşkilatınca mı yoksa Belediyece mi konulduğu bilinmeyen iki işaret tablosu vardır: Bunlarda “Azami sürat 10 Km” ibaresi yazılıdır.

Bu işaretler, vardır ama yine de Darıca’nın bu caddesinden geçen vasıtaların hemen hepsi, en azından elli Km hızla aşağıya ve yukarıya doğru seyreder. Darıca’nın, bu istasyon caddesi ise, azami beş metre genişliktedir. Cadde, Darıcanın nüfus ve iş bakımından en kesif olduğu bir kısmıdır. Bütün resmi daireleri iş yerleri, ticarethaneler, kahveler, cami ve ilkokul bu cadde üzerindedir. Her an, bir çok vatandaş, bu vasıtaların altında kalıp ezilmek tehlikesiyle karşı karşıyadır.

Bu trafiği kontrol görevi, trafikçilerin olmadığı yerlerde, Belediyelerin ve onların görevlendirdiği zabıta teşkilatının olması lazım gelir. Fakat, çok kere hayretle görülürki: Bedeliye başkanından tutunda, bu vasıtalar cehennemi süratla seyreder ve etraflarına ölüm korkuları saçarlar.

Ve….Şimdiye kadar da, bir zabıta memurunun, bir şoförü, fazla süratı yüzünden çevirdiğini de maalesef göremedik.

Biz, çocuklarımızın, işyerilerimizin canlarımızın, velhasıl bu arabaların tehdit ettiği herşeyimizin emniyette olmasını istiyor ve bunu ilgililerden bekliyoruz.

31.05.2020

Darıca, Kocaeli, Türkiye

Author/Yazan : Numan Bayraktaroğlu

Author/Yazan: NUMAN BAYRAKTAROĞLU

OLAYLARIN ARDINDAN

İHMAL

Memleketimizde, çok kere ihmaller; sebebiyet verdikleri hadiselerin “facia”lar şeklinde tezahüründen sonra keşfedilir. Her gün, gazetelerde okursunuz:”Kontrolün ihlali yüzünden, müteahhit demiri az kullanmıştır ve bu yüzden, yapılan filan bina yıkılmıştır.” “Bozulan arabasını sağa iyice yanaştırmayan şöförün ihmali yüzünden arkadan gelen otobüs bindirmiştir, ölü ve yaralı şu kadar.” Vazifesini ihmal eden muhasebeci yüzünden milyonluk müessese iflas etmiştir. “İhmal yüzünden… ” İhmal, ihmal, ihmal…,,

Şimdi, şu son tren faciasına bakınız: Hepimizin içimiz cayır cayır yandı. Ölenlere tanrı rahmet versin, kurtulanlara geçmiş olsun. Çok büyük bir kaza idi, çok. Bu işin hissi cephesidir. Tahkikatların gazetelere akseden kısımlarından öğreniyoruz ki:

1- Hareket memurunun ihmali var. Birinden haber almadan ötekine yol vermiş.

2-Katar makinisti ile şefin ihmali var; tedbir almamışlarmış.

3-Banliyö treni makinistinin ihmali var; dikkat etmemiş.

4- Ve aziz okuyucularım, Devlet Demir Yollarının büyük ihmali var; bir ufak sadme de dahi tuzla buz olacak duruma gelmiş olan eski vagonları çalıştırıyor.

Bunlardan üçünün hakkında derhal takibata geçildiğini gazetelerde okuduk ya, dördüncünün akibetini de bekliyoruz:

6.05.1961

Darıca, Kocaeli, Türkiye

Author/Yazan : NUMAN BAYRAKTAROĞLU

OLAYLARIN ARDINDAN :

Author/yazan : NUMAN BAYRAKTAROĞLU

Tanrım, hiç kimseyi sıhhatından edip hastaneye muhtaç etmesin. Bu hastahaneler hele Taşranın Devlet Hastahanelerinden biri olursa vay geldi hastanın haline.

Göğüs hastalığına tutulmuş bir arkadaşım vardı. Artvin Devlet Hastahanesinin bu hastalıkla ilgili bir servisinde yatıyordu. Yattığı servise “servis” denmesi için bin şahit lazımdı. Pisti. Bakımsızdı, sinekler yığınak yapmıştı, günlerce doktor uğramıyprdu, odanın içi feci idi ve arkadaşım yürüyerek girdiği servisten, tahmin ettiğiniz gibi öldü ve öyle çıkdı.

Hastalanır ve bir hastahaneye muayene veya tedavi için giderseniz, doktorun karşısına çıkıncaya kadar, kapıcıdan ayrı, hasta bakıcıdan ayrı ve hemşireden ayrı azar yersiniz. Sanki o bakıcılar ve kapıcılar bütün şefkat hissinden yoksul kalmış ve birer azarlama robotudurlar. Hastahanelerin sağlık kısmı ile ilgili doktor ve sağlık memurları hemşireler kısmına sözümüz yoktur. Hoş; bunlardan da bazan merhametsizler çıkıyorya ama binde onu aşmadığı için yekün teşkil etmiyor ve tesirsiz kalıyor. Diğerleri, yani bakıcılar ve kapıcılar takımı, çok nursuz ve merhametsiz oluyorlar. Bunlara, Bakanlık çok az maaş vermektedir. Gerçi çok kere yiyecek, giyecek ve yatacaklarını hastahaneden temin ederler ama aldıkları para da azdır.

Yıllarca terfi etmezler. Dondurulmuş bir kadroları vardır, o kadro ile girerler onunla çıkarlar. Böyle az para verildiği için kaliteleri ve seviyeleri iyi personel bu hizmetlere yanaşmazlar. Bunun için de; doktorundan ne kadar iyi muamele görürse görsün, bir hasta, eğer kendisine ilacını veren ve suyunu getiren hasta bakıcıdan azar yerse iyi olmak şöyle dursun daha hasta olur.

Onun için: Böyle hakikaten eksantrik yerler de çalışacak personele yeteri kadar maaş vermeli ve kaliteli eleman almalıyız.

Bu yazımız tenkit olsun diye yazılmamıştır. Bir temenni olup, hastahanede yatıp çıkmış her hastadan aynı hususun şikayetini kolayca dinleyebilirsiniz.

28.04.1961

Darıca, Kocaeli, Türkiye

Yazan : Numan Bayraktaroğlu

Learning at the pace of crisis

Moving boldly doesn’t mean moving thoughtlessly, however. Bold action and the ability to learn are highly interrelated. The real-time ability to learn during a crisis is in fact the one ingredient that can turbocharge your ability to scale quickly.

Find a new cadence

In situations of extreme uncertainty, leadership teams need to learn quickly what is and is not working and why. This requires identifying and learning about unknown elements as quickly as they appear. Prior to the crisis, leading companies had already been increasing the cadence of their learning as part of a quickened organizational metabolism (Exhibit 3). Companies can look to their example as they work to adapt to change more rapidly during crisis times—and beyond.

Four areas of intervention can help companies learn more quickly during the crisis and the next normal that follows.

Quicken your data reviews

Start by evaluating the frequency with which you review the available data. You should be reviewing multiple sources of data on a weekly (or more frequent) basis to evaluate the shifting needs of your customers and business partners—as well as your own performance. Look to your crisis nerve center as a single source of truth for newly emerging data about your employees, your customers, your channel partners, your supply chains, and the ecosystems in which your company participates. Then turn to secure file-sharing technologies like Box and Zoom to remotely share and discuss insights from this faster pace of data review.

Focus on technology

The abrupt shift to virtual operations and interactions, both inside and outside your organization, also provides an opportunity to accelerate your pace of learning about, and adoption of, technologies with which your organization might have only begun to experiment. As experimentation scales, so does learning. The rapid shift to digital can also reveal potential trouble spots with your organization’s current technology stack, giving you a sneak preview of how well your technology “endowment” is likely to perform going forward. Here are some factors to keep an eye on as you more quickly learn about and adopt new technologies:

 — Data security. Are you experiencing breaches as you move to remote working and data sharing?

 — Scalability. Where are the breaks and crashes happening as 100 percent of your interactions with customers, employees, and business partners go virtual?

 — Usability. Right now customers and business partners often have little choice but to access your products or services through your new digital offerings. Their options will expand as we move beyond the crisis. How well will your new offerings stand up? If your current usability is low, experiment to improve it now, while you still have a captive audience to partner with and learn from.

Test and learn

In normal times, experimentation might sometimes seem a risky game. Changing the working models to which employees, customers, or business partners are accustomed can seem to risk pushing them away, even when those experiments take aim at longer-term gains for all concerned. The COVID-19 crisis, however, has made experimentation both a necessity and an expectation.

Start with the customer-facing initiatives that, while more complex, offer a larger upside. Use automation and predictive analytics to quickly and effectively isolate difficulties. Look for opportunities to standardize what you’re learning to support scaling digital solutions across core business processes. Standardization can help accelerate projects by reducing confusion and creating common tools that broad groups of people can use.

Learning while scaling

As companies increase their rate of metabolic learning, they need to quickly translate what they’re learning into at-scale responses. Scaling what you learn is always an obstacle in a digital transformation. We’ve had plenty to say regarding scaling up analytics, scaling up quality, or innovating at speed and scale. Here we’ll simply highlight the role learning plays in your ability to scale your  digital initiatives.

While companies frequently pilot new digital initiatives with the intention of learning from them before they roll out broadly, these experiments and pilots, in normal times, only test one dimension at a time, like the conversion/engagement/satisfaction rates of individual customers, the unit economics of a single transaction, or the user experience of a given digital solution. Whether they want to or not, companies in crisis mode find themselves in a different type of pilot: one of digital programs at massive scale. The rapid transition to full scale in many types of digital operations and interfaces has brought with it many challenges (for example, building and delivering laptops in under two weeks to all employees to enable 100 percent of them for remote working versus the 10 percent that were previously remote). But it also brings opportunities. At the broadest level, these include the prospect for real-time learning about where value is going in your markets and industry, the chance to learn and feed back quickly what’s working in your operations and your agile organizational approach, and the opportunity to learn where it is you’re more or less able to move quickly—which can help inform where you might need to buy a business rather than build one.

Observing interaction effects

Since scaling quickly requires changing multiple parts of a business model or customer journey simultaneously, now is a valuable time to observe the interaction effects among multiple variables (Interaction effects occur when two or more independent variables interact with at least one dependent variable. The effect of all the    interactions together is often either substantially greater (or lesser) than the sum of the parts).  For example, healthcare providers are facing an increased demand for services (including mental health and other non-COVID-19 presentations) at the same time that their traditional channels are restricted, all in the context of strict privacy laws. This has caused many providers to rapidly test and adopt telehealth protocols that were often nonexistent in many medical offices before, and to navigate privacy compliance as well as patient receptivity to engaging in these new channels. Providers are learning which types of conditions and patient segments they can treat remotely, at the same time that they’re widely deploying new apps (such as Yale Medicine’s MyChart) to accelerate the digital medical treatment of their patients.

Similarly, when a retailer rolls out, within a week, a new app for country-wide, same-day delivery, it’s testing far more than one variability at a time, such as the customer take-up of that new channel. Because of the scale, it can learn about differences in adoption and profitability by region and store format. It can test whether its technology partners can scale across 1,000 stores. It can test whether its supplier base can adapt distribution to handle the new model. Shifting multiple variables simultaneously, however, also increases the degree of difficulty when it comes to interpreting the results—because you’re no longer isolating one variable at a time. Companies who have already invested in AI capabilities will find themselves significantly advantaged. Making further investments now—even if you’ve yet to get going— with continue to pay out postcrisis as well.

Simplify and focus

Given the degree of complexity created by scaled experimentation, organizations need to find ways to simplify and focus to avoid being overwhelmed. Some of that is done for them as the crisis closes many physical channels of distribution and makes others impossible to access. But further streamlining is required along the lines of what is working, what isn’t, and why. This is perhaps the first global crisis in which companies are in the position to collect and evaluate real-time data about their customers and what they are doing (or trying to do) during this time of forced virtualization. Pruning activities and offerings that are no longer viable while aggressively fixing issues that arise with your offerings will help increase the chance of keeping a higher share of customers in your lower-cost, digital channels once the crisis passes.

Don’t go it alone

Research indicates that people and organizations learn more quickly as a result of network effects. The more people or organizations that you add to a common solution space, in other words, the more quickly learning occurs—and the faster performance improves. Some argue that these network effects occur in a so-called collaboration curve.

At a time of crisis, changing needs drive rapid shifts in employee mindsets and behaviors that play out as a greater willingness to try new things. Consider how you can best support the ways your talented employees learn. One option is to build or tap into platform-based talent markets that help organizations reallocate their labor resources quickly when priorities and directions shift—and help talented employees increase their rate of learning. Be sure to look not just within the boundaries of your own company but across enterprises to include your channel partners, your vendors, and your suppliers. Chances are they will be more willing than ever to collaborate and share data and learnings to better ensure everyone’s collective survival.

It’s often the case in human affairs that the greatest lessons emerge from the most devastating times of crises. We believe that companies that can simultaneously attend to and rise above the critical and day-to-day demands of their crisis response can gain unique insights to both inform their response and help ensure that their digital future is more robust coming out of COVID-19 than it was coming in.

10.05.2020

Kadıköy, İstanbul – TURKEY

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

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

04.05.2020

Author: M.Temel Aygün

Now is the time for bold learning at scale.

If the pace of the pre-coronavirus world was already fast, the luxury of time now seems to have disappeared completely. Businesses that once mapped digital strategy in one- to three-year phases must now scale their initiatives in a matter of days or weeks.

In one European survey, about 70 percent of executives from Austria, Germany, and Switzerland said the pandemic is likely to accelerate the pace of their digital transformation. The quickening is evident already across sectors and geographies. Consider how Asian banks have swiftly migrated physical channels online. How healthcare providers have moved rapidly into telehealth, insurers into self-service claims assessment, and retailers into contactless shopping and delivery.

The COVID-19 crisis seemingly provides a sudden glimpse into a future world, one in which digital has become central to every interaction, forcing both organizations and individuals further up the adoption curve almost overnight. A world in which digital channels become the primary (and, in some cases, sole) customer-engagement model, and automated processes become a primary driver of productivity—and the basis of flexible, transparent, and stable supply chains. A world in which agile ways of working are a prerequisite to meeting seemingly daily changes to customer behavior.

If a silver lining can be found, it might be in the falling barriers to improvisation and experimentation that have emerged among customers, markets, regulators, and organizations. In this unique moment, companies can learn and progress more quickly than ever before. The ways they learn from and adjust to today’s crisis will deeply influence their performance in tomorrow’s changed world, providing the opportunity to retain greater agility as well as closer ties with customers, employees, and suppliers. Those that are successfully able to make gains “stick” will likely be more successful during recovery and beyond.

Now is the time to reassess digital initiatives— those that provide near-term help to employees, customers, and the broad set of stakeholders to which businesses are increasingly responsible and those that position you for a postcrisis world. In this world, some things will snap back to previous form, while others will be forever changed. Playing it safe now, understandable as it might feel to do so, is often the worst option.

A crisis demands boldness and learning

Every company knows how to pilot new digital initiatives in “normal” times, but very few do so at the scale and speed suddenly required by the COVID-19 crisis. That’s because in normal times, the customer and market penalties for widespread “test and learn” can seem too high, and the organizational obstacles too steep. Shareholders of public companies demand immediate returns. Finance departments keep tight hold of the funds needed to move new initiatives forward quickly. Customers are often slow to adjust to new ways of doing things, with traditional adoption curves reflecting this inherent inertia. And organizational culture, with its deeply grooved silos, hinders agility and collaboration. As a result, companies often experiment at a pace that fails to match the rate of change around them, slowing their ability to learn fast enough to keep up. Additionally, they rarely embrace the bold action needed to move quickly from piloting initiatives to scaling the successful ones, even though McKinsey research shows bold moves to adopt digital technologies early and at scale, combined with a heavy allocation of resources against digital initiatives and M&A, correlate highly with value creation (Exhibit 1).

As the COVID-19 crisis forces your customers, employees, and supply chains into digital channels and new ways of working, now is the time to ask yourself: What are the bold digital actions we’ve hesitated to pursue in the past, even as we’ve known they would eventually be required? Strange as it may seem, right now, in a moment of crisis, is precisely the time to boldly advance your digital agenda.

A mandate to be bold

What does it mean to act boldly? We suggest four areas of focus, each of which goes beyond applying “digital lipstick” and toward innovating entirely new digital offerings, deploying design thinking and technologies like artificial intelligence (AI) at scale across your business, and doing all of this “at pace” through acquisitions (Exhibit 2).

New offerings

By now you’ve likely built the minimally viable nerve center you need to coordinate your crisis response. This nerve center provides a natural gathering point for crucial strategic information, helping you stay close to the quickly evolving needs of core customer segments, and the ways in which competitors and markets are moving to meet them. Mapping these changes helps address immediate risks, to be sure, but it also affords looking forward in time at bigger issues and opportunities—those that could drive significant disruption as the crisis continues. Just as digital platforms have disrupted value pools and value chains in the past, the COVID-19 crisis will set similar “ecosystem”-level changes in motion, not just changes in economics but new ways of serving customers and working with suppliers across traditional industry boundaries.

In the immediate term, for example, most organizations are looking for virtual replacements for their previously physical offerings, or at least new ways of making them accessible with minimal physical contact. The new offerings that result can often involve new partnerships or the need to access new platforms and digital marketplaces in which your company has yet to participate. As you engage with new partners and platforms, look for opportunities to move beyond your organization’s comfort zones, while getting visibility into the places you can confidently invest valuable time, people, and funds to their best effect. Design thinking, which involves using systemic reasoning and intuition to address complex problems and explore ideal future states, will be crucial. A design-centric approach focuses first and foremost on end users or customers. But it also helps make real-time sense of how suppliers, channel partners, and competitors are responding to the crisis, and how the ecosystem that includes them all is evolving for the next normal emerging after the immediate crisis fades.

Reinvent your business model at its core

Going beyond comfort zones requires taking an end-to-end view of your business and operating models. Even though your resources are necessarily limited, the experience of leading companies suggests that focusing on areas that touch more of the core of your business will give you the best chance of success, in both the near and the longer term, than will making minor improvements to noncore areas. Organizations that make minor changes to the edges of their business model nearly always fall short of their goals. Tinkering leads to returns on investment below the cost of capital and to changes (and learning) that are too small to match the external pace of disruption. In particular, organizations rapidly adopting AI tools and algorithms, as well as design thinking, and using those to redefine their business at scale have been outperforming their peers. This will be increasingly true as companies deal with large amounts of data in a rapidly evolving landscape and look to make rapid, accurate course corrections compared with their peers.

While the outcomes will vary significantly by industry, a few common themes are emerging across sectors that suggest “next normal”  changes to cost structures and operating  models going forward.

 — Supply-chain transparency and flexibility. Neardaily news stories relate how retailers around the globe are experiencing stock-outs during the crisis, such as toilet-paper shortages in the United States. It’s also clear that retailers with full supply-chain transparency prior to the crisis— as well as algorithms to detect purchase-pattern changes—have done a better job navigating during the crisis. Other sectors, many of which are experiencing their own supply-chain difficulties during the crisis, can learn from their retail counterparts to build the transparency and flexibility needed to avoid (or at least mitigate ) supply-chain disruption in the future.

 — Data security. Security has also been in the news, whether it’s the security of people themselves or that of goods and data. Zoom managed to successfully navigate the rapid scaling of its usage volume, but it also ran into security gaps that needed immediate address. Many organizations are experiencing similar, painful lessons during this time of crisis.

 — Remote workforces and automation. Another common theme emerging is the widely held desire to build on the flexibility and diversity brought through remote working. Learning how to maintain productivity—even as we return to office buildings after the lockdown ends, and even as companies continue to automate activities—will be critical to capturing the most value from this real-world experiment that is occurring. In retail, for example, there has been  widespread use of in-store robots to take over more transactional tasks like checking inventory in store aisles and remote order fulfillment. These investments won’t be undone postcrisis, and those that have done so will find themselves in advantaged cost structure during the recovery.

Boldly evolve your business portfolio

No company can accelerate the delivery of all its strategic imperatives without looking to mergers and acquisitions (M&A) to speed them along. This is particularly true with digital strategy, where M&A can help companies gain talent and build capabilities, even as it offers access to new products, services, and solutions, and to new market and customer segments.

More broadly, we know from research into economic downturns that companies that invest when valuations are low outperform those that do not. These companies divested underperforming businesses  10 percent faster than their peers early on in a crisis (or sometimes in anticipation of a crisis) and then shifted gears into M&A at the first sign of recovery.

In more normal times, one of the main challenges companies face in their digital transformations is the need to acquire digital talent and capabilities through acquisitions of tech companies that are typically valued at multiples that capital markets might view as dilutive to the acquirer. The current downturn could remove this critical roadblock, especially with companies temporarily free from the tyranny of quarterly earnings expectations. Because valuations are down, the crisis and its immediate aftermath may prove an opportune time to pick up assets that were previously out of reach. We are already seeing many private-equity firms actively looking to deploy large swaths of capital. 

See you in next blog with the following topics :

• Learning at the pace of crisis

03.05.2020

Kadıköy, İstanbul – TURKEY

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

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

Copyright:https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-strategy-in-a-time-of-crisis