Manufacturing must seize upon digital transformation: BCG
Artificial intelligence, advanced data analytics and 3D printing are a few of the innovations.
BOSTON — Traditional industries such as manufacturing need to embrace fast-moving change and seize digital transformation opportunities, according to a new e-book from the Boston Consulting Group (BCG).
The consulting firm based in Boston says digital disruption is reaching beyond technology to engulf a variety of industries, such as manufacturing, which in Canada directly and indirectly accounts for 30% of economic output.
BCG’s e-book advises manufacturers to create multiple low-cost tech initiatives, kill lagging projects quickly, and commit to “always on” transformation to stay ahead.
Transformation: Delivering and Sustaining Breakthrough Performance draws on the firm’s work in more than 400 transformations that generated a median annual impact of approximately $340 million through the application of capital efficiency levers, cost cuts, revenue increases, and improvements in organizational performance.
“Through artificial intelligence, advanced data analytics, and 3D printing, to name just a few emerging digital innovations, companies in many industries can do great things for customers and create new levels of value,” says Lars Fæste, a senior partner at BCG and one of the editors of the e-book.
Industry leaders are advised to act now to launch digital products and services and to digitize internal processes, even if they don’t feel ready. BCG suggests taking these steps:
• Establish a baseline on their current use of digital technologies.
• Create lots of quick-and-dirty plans for technology projects. Successful companies move quickly to create project “portfolios” focused on just a few key areas where technology can make a difference: customer experience; reimagined products, services, and business models; and reengineered business processes.
• Become agile to accelerate the transformation. Successful digital transformers launch multiple pilot projects at once. The goal isn’t perfection but a “good enough” product, with just enough features to make it functional. Apps are often basic at launch. New features are added over time depending on what customers want.
• Transform the organization. Add capabilities, sometimes with the help of an ecosystem of partners, or create external incubators through joint ventures or acquisitions.
Download the Transformation: Delivering and Sustaining Breakthrough Performance is available for download at https://www.bcgperspectives.com/transformation-breakthrough-performance.