Strategy& surveys global manufacturing companies to understand their views on digital operations and Industry 4.0

Global manufacturing companies have put digital operations or Industry 4.0 on the agenda, but most corporate leaders are not yet ready to meet the challenges and opportunities brought about by digital transformation, nor have they embraced the brand-new concepts that digitalization has given birth to. Based on this, in the 2018 research report "2018 Global Digital Operations Survey-Digital Champions", Strategy& conducted a survey of more than 1,100 executives from global manufacturing companies to understand their views on digital operations and Industry 4.0. the opinion of.

Strategy& has developed a set of indexes based on the survey data, ranking companies according to their digital operational maturity (referred to as "digital maturity"), and divided them into four categories: digital rookie, digital follower, digital pioneer and Digital champion.

In the development process of an enterprise, companies that can keep up with digital changes and benefit from them are called digital champions. The report summarizes the four major business ecosystems that digital champions are better at, including customer solutions, operations, technology, and talents. Each system consists of a series of partners, suppliers, products and services, employees, and third-party consultants. , Factories, outsourcing, technology and customers. For digital champions, these ecosystems contain huge value creation opportunities.

In order to better understand the vision, organizational structure, capabilities, and ways of success of digital champions, Strategy& explored their common points and unique characteristics. They have established a unique advantage by integrating the four major business ecosystems of customer solutions, operations, technology and talents.

Four major business ecosystems

Customer solution system (also known as business model and customer value level): Through personalization, customization, function enhancement, logistics optimization, revenue model innovation, and design and application innovation, companies do their best to provide customers or consumers with Different products and services. In this ecosystem, external companies will also be integrated into the solution to create added value.

Operation system (also known as solution support and value chain efficiency level): Provide support for customer solution systems through activities and processes such as product development, planning, procurement, production, warehousing, logistics and services. The external partners involved in business operations, including contract manufacturers, logistics partners and academia, are all part of this ecosystem.

Technology system: This ecosystem covers IT architecture, IT interfaces, and digital technology, and promotes or supports improvements and breakthroughs in the other three ecosystems. It involves key industry 4.0 technologies such as artificial intelligence, 3D printing, industrial Internet of Things, sensors, augmented and virtual reality, and robotics.

Talent system: This support system covers corporate capabilities and corporate culture, involving factors that promote digital transformation such as skills, thinking models, behavior patterns, contacts and skills sources, and career development. We found that most companies, including those that have realized the importance of becoming a digital champion, lack the vision, strategy and corporate culture to promote digital transformation.

Customer Solution System of Ecosystem Analysis

Strategy& surveys global manufacturing companies to understand their views on digital operations and Industry 4.0

The survey found that 50% of digital champions deployed open platforms to provide innovation and operational support. These open platforms can attract a large number of companies and individuals at a lower cost. In this way, solutions that were originally out of reach become feasible, and unique skills and abilities can be built. With the help of open platforms, partners and other ecosystem members can take advantage of the digital champion's business model: for example, selling products through pay-per-view ordering and omni-channel retail (a mix of online and offline channels). Such external participants in the ecosystem include: product and service development partners, digital innovation experts, suppliers, IT providers, and various supplementary product providers from the private sector or academia.

A mature and complete customer solution system can break internal and external boundaries in an unprecedented way and create value for all stakeholders. For some backward companies, it is difficult to catch up with the digital champion, because the digital champion has invested a lot of time and resources in innovative applications to establish a first-mover advantage. The survey found that 68% of digital champions have adopted an optimized customer experience strategy to provide personalized products and services; 63% of digital champions have established a more complex value chain with their suppliers to seamlessly connect with customers. Products with suppliers.

Operating System of Ecosystem Analysis

Strategy& surveys global manufacturing companies to understand their views on digital operations and Industry 4.0

In digital champion companies, the operating system makes it possible to coordinate the operation and complete transparency of the entire value chain. It can connect the work of different functions and partners in R&D, supply chain and service process. The value of a high-performance ecosystem is particularly reflected in planning and execution, because it can optimize the cycle time: that is, speed up the pace of work, so that it can continue to unify the supply chain execution (including production and replenishment) and real-time customer demand signals.

Technical System of Ecosystem Analysis

Strategy& surveys global manufacturing companies to understand their views on digital operations and Industry 4.0

Leading the use of new technologies and using the benefits achieved to further enhance digital maturity is a strategy commonly adopted by digital champions. The benefits achieved include sales growth and efficiency improvements. In addition, by promoting technological changes in the operating system, the technological system has a subtle influence on the corporate culture—the changes in personnel structure and skills are a direct manifestation.

The Talent System of Ecosystem Analysis

Strategy& surveys global manufacturing companies to understand their views on digital operations and Industry 4.0

Only companies with a clear digital vision, strategy and culture can promote digital transformation and truly benefit from it. Two-thirds of the companies we interviewed lacked a digital vision, and the management of more than 70% of the digital champions had clear ideas about the digital future and played a leading role in the company. We also found that digital champions have invested a lot of money to train and cultivate the skills needed in the digital environment and successfully build a digital culture.

To become a digital champion, the key is to organically integrate the four ecosystems of customer solutions, operations, technology and talents, and make full use of various partners. In the process of continuously improving capabilities and upgrading systems, companies will go through four stages of continuous maturity: digital rookie-functional departments have not yet opened up; digital followers-business practices are closely linked by functional nature; digital pioneer-cross-functional Department-linked business practices, the operation system is closely linked to the technology system and talent system; digital champions—customer solutions, operations, technology, and talent systems are fully integrated on the road to digital champions. Companies must “addition” (establish The ability under a specific ecosystem) also needs to be "subtracted" (to promote the full integration of the four ecosystems).

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