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genioux Fact post by Fernando Machuca and Claude
Introduction:
In the rapidly evolving landscape of digital transformation, manufacturers face unique challenges that require a strategic and phased approach. The article "Why Manufacturers Need a Phased Approach to Digital Transformation" by Nitin Joglekar, Geoffrey Parker, and Jagjit Singh Srai, published in the MIT Sloan Management Review, provides valuable insights into the three distinct stages of digital transformation and the appropriate metrics for each stage.
genioux GK Nugget:
"Successful digital transformation in manufacturing requires a phased approach, with each stage guided by appropriate metrics and stakeholder involvement." — Fernando Machuca and Claude
genioux Foundational Fact:
Digital transformation in manufacturing is a complex process that involves investing in and mastering new operational technologies, reskilling workers, aligning capabilities with external supply-chain partner infrastructures, and enabling new digital ecosystems. To succeed, manufacturers must recognize the three distinct stages of digital transformation and apply the appropriate metrics for each stage, ensuring the right stakeholders are involved and the project remains on track.
10 genioux Facts:
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- Digital transformation in manufacturing involves three distinct stages: gaining efficiency, building new digital capabilities, and growing via digital innovation.
- Each stage requires attention to different stakeholders and should be measured against a specific set of key performance indicators (KPIs).
- Stage 1 focuses on point solutions that leverage technology to cut costs and boost productivity, with metrics based on ROI.
- Stage 2 aims to develop organization-wide digital infrastructure and capabilities, with metrics focusing on the creation of new capabilities, adoption, and speed of deployment.
- Stage 3 involves deploying technology for strategic ambitions, such as digital engagement with partners and customers, with metrics measuring ecosystem partner engagement, new customer acquisition, and transaction volumes.
- Misaligning metrics with the appropriate stage can lead to costly mistakes and project failures, as demonstrated by General Electric's Predix platform.
- Unilever's automated powder tower project exemplifies a successful Stage 1 initiative, with metrics focused on ROI, product yield, and productivity improvements.
- Schneider Electric's supply-chain control tower project showcases a Stage 2 initiative, with metrics measuring visibility, customer engagement, and future development of autonomous planning and self-healing capabilities.
- Ralph Lauren's adoption of digital identity technology represents a Stage 3 innovation, with metrics focusing on brand integrity, consumer engagement, partner ecosystem, and factory activation.
- To succeed in digital transformation, manufacturers should determine the appropriate stage for each project, involve the right stakeholders, adopt relevant metrics, use data to make progress, and avoid relying solely on ROI as a metric for later-stage projects.
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Conclusion:
The article "Why Manufacturers Need a Phased Approach to Digital Transformation" provides a valuable framework for manufacturers navigating the complex process of digital transformation. By recognizing the three distinct stages and applying the appropriate metrics and stakeholder involvement for each stage, manufacturers can avoid costly mistakes and ensure their digital transformation efforts remain on track. The examples of Unilever, Schneider Electric, and Ralph Lauren demonstrate the importance of aligning metrics with the specific goals and focus of each stage. Ultimately, manufacturers that adopt this phased approach and leverage the right metrics will be better positioned to build new digital capabilities, drive innovation, and achieve their strategic ambitions in the digital age.
REFERENCE
The g-f GK Article
Nitin Joglekar, Geoffrey Parker, and Jagjit Singh Srai, Why Manufacturers Need a Phased Approach to Digital Transformation, MIT Sloan Management Review, MAGAZINE SPRING 2024 ISSUE / RESEARCH FEATURE.
ABOUT THE AUTHORS
Nitin Joglekar is an associate professor of operations and technology management at Boston University’s Questrom School of Business. Geoffrey Parker is the Charles E. Hutchinson ’68A Professor of Engineering Innovation at Dartmouth College, a fellow and visiting scholar at the MIT Initiative on the Digital Economy, and a coauthor of Platform Revolution: How Networked Markets Are Transforming the Economy (W.W. Norton, 2016). Jagjit Singh Srai is the director of research in the Department of Engineering at Cambridge University and chair of the World Economic Forum Council on Advanced Manufacturing Value Chains. The authors are listed in alphabetical order; each contributed equally to this article.
Copilot's Summary:
The MIT Sloan Management Review article "Why Manufacturers Need a Phased Approach to Digital Transformation" discusses the complexities of digital transformation in manufacturing². The authors suggest a three-stage approach for successful adoption of transformative technology¹²³:
- Making efficiency gains: This involves investing in and mastering new operational technologies (OTs), reskilling workers, and keeping capabilities in sync with external supply-chain partner infrastructures².
- Leveling up digital capabilities: This stage requires the multistaged integration of physical assets with digital technologies².
- Growing via innovation: In this stage, manufacturers apply the right metrics to achieve the kinds of innovation they seek¹².
The authors argue that applying the wrong metrics — those more appropriate for a different stage — can be a costly mistake². They emphasize that digital transformation in manufacturing is not a single process and cannot be demonstrated via a single metric such as return on investment². Instead, it requires a more nuanced approach that considers the staged integration of physical assets with digital technologies².
Source: Conversation with Bing, 3/20/2024
(1) Why Manufacturers Need a Phased Approach to Digital Transformation. https://sloanreview.mit.edu/article/why-manufacturers-need-a-phased-approach-to-digital-transformation/.
(3) Why Manufacturers Need a Phased Approach to Digital Transformation. https://shop.sloanreview.mit.edu/why-manufacturers-need-a-phased-approach-to-digital-transformation.
(4) undefined. https://info.microsoft.com/rs/157-GQE-382/images/A_Strategic_Approach_to_Digital_Transformation_in_Manufacturing_Whitepaper.pdf.
(5) undefined. https://www.ptc.com/en/blogs/corporate/digital-transformation-in-manufacturing-guide.
(6) undefined. https://www.mckinsey.com/capabilities/operations/our-insights/preparing-for-the-next-normal-via-digital-manufacturings-scaling-potential.
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Nitin Joglekar
Nitin Joglekar is an Associate Professor of Operations and Technology Management at Boston University's Questrom School of Business³⁴. He holds a PhD from MIT Sloan School of Management, an SM from MIT School of Engineering, an MS from Memorial University of Newfoundland, Canada, and a BS (with Honors) from the Indian Institute of Technology Kharagpur³⁴.
His interests span digital transformation of products & supply chains through artificial intelligence and data-driven decisions, platforms and market design, and sustainability realms³⁵⁶. He is particularly interested in Digital Product Management Thinking (DPMT), deployment of analytics and machine learning techniques, and digitization & public policy issues in local and global supply chains⁴⁶.
Joglekar's work has been published in leading academic journals across different disciplines, including marketing, psychology, management, and innovation³. He has also worked as a marketing professional in FMCG and financial services industries³. He serves as a fellow at BU’s Digital Business Institute⁵.
Source: Conversation with Bing, 3/20/2024
(1) Nitin Joglekar | Questrom School of Business - Boston University. https://www.bu.edu/questrom/profile/nitin-joglekar/.
(2) Nitin Joglekar | Digital Business Institute - Boston University. https://www.bu.edu/dbi/profile/nitin-joglekar/.
(3) Nitin Joglekar: Home Page - Boston University. https://people.bu.edu/joglekar/index.html.
(4) | Insights@Questrom. https://insights.bu.edu/author/nitin-joglekar/.
(5) . https://bing.com/search?q=Nitin+Joglekar+Boston+University%e2%80%99s+Questrom+School+of+Business+bio.
(6) Boston University Questrom School of Business. https://www.bu.edu/questrom/.
(7) undefined. https://people.bu.edu/joglekar.
Geoffrey Parker
Geoffrey Parker is the Charles E. Hutchinson ’68A Professor of Engineering Innovation at Dartmouth College¹². He also serves as the Director of the Master of Engineering Management Program at Dartmouth's Thayer School of Engineering¹². In addition, he is a Fellow and Visiting Scholar at the MIT Initiative on the Digital Economy¹²⁵.
Parker's research interests include data analytics, platform economics & strategy, intellectual property, core operations, product innovation & development, outsourcing & supply chain strategy, and energy economics²³. He has made significant contributions to the theory of two-sided markets, which are used extensively in platform business models⁶.
He is a co-author of the book "Platform Revolution: How Networked Markets Are Transforming the Economy" (W.W. Norton, 2016)². His work has been recognized globally, with him being ranked in the Thinkers50 — a list of top 50 management thinkers globally — for a third time⁶.
Parker holds a B.S.E. from Princeton and M.S. and Ph.D. from MIT¹²⁵. Prior to his academic career, he worked in the FMCG and financial services industries².
Source: Conversation with Bing, 3/20/2024
(1) Geoffrey G. Parker - Wikipedia. https://en.wikipedia.org/wiki/Geoffrey_G._Parker.
(2) Dartmouth Engineering | Geoffrey G. Parker. https://engineering.dartmouth.edu/community/faculty/geoffrey-parker.
(3) Geoff Parker - MIT Initiative on the Digital Economy. https://ide.mit.edu/people/geoff-parker/.
(4) Geoffrey G. Parker | Faculty Directory. https://faculty-directory.dartmouth.edu/geoffrey-g-parker.
(5) Dartmouth Engineering | Geoffrey Parker Named to Thinkers50 2023…. https://engineering.dartmouth.edu/news/geoffrey-parker-named-to-thinkers50-2023-ranking.
(6) Geoffrey Parker | Speaking Fee | Booking Agent - All American Speakers .... https://www.allamericanspeakers.com/speakers/442068/Geoffrey-Parker.
(7) undefined. https://doi.org/10.1177/000812.
(8) undefined. https://doi.org/10.1093/icc/dtab048.
Jagjit Singh Srai
Jagjit Singh Srai is the Director of Research in the Department of Engineering at Cambridge University and the Head of the Centre for International Manufacturing at the Institute for Manufacturing (IfM)¹². He has extensive experience leading large-scale complex research projects across industry, academia, and public bodies¹.
His research focuses on the design, analysis, and operation of international supply chains and the impact of advanced production and digital technologies¹. He has worked extensively with industry, primarily in healthcare and food/FMCG sectors, and his research findings have directly underpinned major organizational change¹.
In addition to his roles at Cambridge, Dr. Srai is the Co-Chair of the World Economic Forum Council on the Future of Advanced Manufacturing and Production¹. He also leads IfM’s Digital Supply Chain Industrial Consortium, involving leading multinationals collaborating on digital supply chain transformation¹.
Before joining Cambridge, Dr. Srai had an extensive career managing complex supply chains for Unilever, a FTSE 100 Company¹. He holds a PhD from MIT Sloan School of Management, an SM from MIT School of Engineering, an MS from Memorial University of Newfoundland, Canada, and a BS (with Honors) from the Indian Institute of Technology Kharagpur¹².
Source: Conversation with Bing, 3/20/2024
(1) Dr Jagjit Singh Srai - Institute for Manufacturing (IfM). https://www.ifm.eng.cam.ac.uk/people/jss46/.
(2) Jagjit Singh Srai | Department of Engineering. http://www.eng.cam.ac.uk/profiles/jss46.
(3) Dr. Jagjit Singh Srai - Strath. https://spider.science.strath.ac.uk/cmac/files/media/srai.pdf.
(4) Dr Jagjit Srai | International Development Research @ Cambridge. https://www.gci.cam.ac.uk/people/members/dr-jagjit-srai.
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