Digital Transformation Implementation Process in Industry

This long-standing concept remains prominent in the global agenda, particularly through marketing initiatives and presentations by well-known international technology-producing companies seeking to generate demand. However, for some reason, the application framework of Industry 4.0 (digital transformation in manufacturing) does not contain particularly sound and rational guidance on how to proceed. In this article, I have made it my responsibility to address what needs to be done, particularly during the transition process, and to present this matter to your attention, esteemed readers, followers and industry players.

Key Information (Future Added Value)

• By 2019, the number of robots used in manufacturing will be approximately 3 million. The number of interconnected devices is increasing from 13 billion to 29 billion. • By 2020, the Internet of Things market size will grow from USD 656 billion to USD 1.7 trillion. • The economic impact created by industrial robots will be USD 0.6-1.2 trillion annually.

Industrial Stages Worldwide

Why Industry 4.0?

In the diagram above, we have attempted to explain the real reasons for digital transformation in manufacturing. As you know, economics is the science of meeting unlimited human needs with scarce resources in the world.

Should We Invest in Technology Immediately?

The answer to our question will naturally be no. What process should company management follow after deciding to move up a level in digital transformation? In the remainder of this article, we have defined how this process should be managed based on our experience and knowledge in general terms. We hope it will be beneficial to all parties.

Industry Transformation Project Process • Meeting with top management:

A meeting is organized attended by the Board Chair and/or Board members and/or CEO and/or General Manager, Directors, and all department heads in the organizational structure. A decision is made regarding the frequency at which meetings will be held in subsequent phases. Top management explains its purpose. Estimated project duration is determined by gathering views on project timeline and expectations.

• Determination of current and potential customer expectations:

Data is collected and consolidated on matters such as customer feedback, past experience, and customers' future expectations. Additionally, the reasons why potential customers do not purchase from us are identified, and expectations are documented in a report.

• Preparation of family bylaws for business continuity (institutionalization) (an essential element of continuity):

Based on the current management structure, systematic and respectful work is conducted with family members to prepare an effective family management charter that ensures management continuity for future generations in a fair and undisputed manner, following which it is put into effect.

• Current state analysis of production processes, determination of current production capacity utilization rates:

Currently implemented processes in production are identified and workflow is determined based on actual facts. Capacity utilization rate generally does not reach 100 percent. Various disruptions may occur during manufacturing—power outages, machine breakdowns, equipment and facility maintenance periods, holidays, strikes, work hour disruptions, seasonal factors and similar issues—causing capacity utilization declines. Among these, the most important is that sales do not reach expected levels. To measure capacity utilization in production, machine downtime and stops are generally calculated. This is because manufacturing industry is generally the heaviest subsector of the industrial sector. In this case, the total machine capacities of the selected business and the rates of actual used capacity are considered. Commercial data is evaluated in this work. (For example, such as average profitability levels.)

• Determination of current technology and measurement of its level in the industrial process:

The technological level of the machinery fleet used in the identified current processes is determined, and analysis and reporting of its position in the current industrial process is ensured.

Determination of the required industry transformation level based on customer and market study results (optimum change):

Customer and market expectation reports are reviewed. First, a roadmap should be prepared by conducting cost-benefit analyses to maximize the capacity utilization rate of existing technology. This roadmap consists of two methods. These are: a) Determination of technological systems and application planning required for needed production. b) Determination of what the technological level for the required machinery fleet will be and how it will be.

• Current financial structure of the business and industrial transformation budgeting (optimization):

The business's balance of payments, financial leverage ratio, investment capacity and capability must be determined with a time diagram. For required technological transformation, budget work must be conducted with short-term (1-3 years), medium-term (3-5 years), and long-term (5-10 years) plans to cover financing (cost of capital), estimation of potential added value when technological (including software) transfers are made, and the technology to be procured must have previously proven itself.

• Review:

All prepared studies, plans and strategies must be reviewed and revised according to continuously changing customer expectations, and decisions regarding postponement and/or suspension must be made by evaluating data to ensure realistic, rational corrections. Simulation must be performed for each study and continued until optimization is achieved. Halil İ. Kırmacı Master's Degree in Business Administration Industrial Engineer Management Consultant Kırmacı Mühendislik Danışmanlık Tic.