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Why Digital Transformation is Necessary

Many small and medium-sized companies do not acknowledge the strategic relevance of digital transformation. This is concerning given the new market trends, such as the growing demand for personalization, on demand manufacturing and mass customization.

Well-implemented digitization involves far more than just installing or replacing software and machines. Companies have to reinvent their strategies and processes to accommodate this huge transformation. Technology is only a means to an end—to facilitate this change.

By approaching digitization in a proactive way, companies will be able to adapt easily to a constantly changing environment. The most foreseeing players will reap the rewards of Industry 4.0, whose deployment will intensify over the next few years. Although many industry leaders still deem this a complex challenge, it is, in fact, an opportunity to unlock the creative potential of North America’s industrial base. This is only possible if companies begin transforming the skills and expertise of their teams right away.

Feeding the value chain with data

With globalization on the rise, digitization is facilitating exchanges between different actors of increasingly fragmented value chains. Companies are expanding their design, product development and manufacturing departments across the globe—this is especially true for highly internationalized industries such as fashion (from luxury to ready-to-wear) and the automotive industry. To enable international teams to work together as effectively as possible, there is only one solution: using digital platforms to consolidate reliable and complete real-time data needed by everyone involved in the process. These tools are all the more relevant, as companies need to add structure to the huge volume of data they amass from varied sources and share it across all company departments.

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In today’s market, customers expect more—they want to personalize their items and receive them instantly while knowing their origins and production ethics involved. This implies that companies need to accelerate their production speed while becoming more transparent in their practices. Once again, the key lies in the ability to share flawless data between all people, organizations and solutions involved on the instant.

Production in the Industry 4.0 era

Digital technology is especially crucial at the production stage. Factories are becoming increasingly intelligent nowadays, playing a pivotal role in value chains. They are now connected internally (products, machines, people and processes in real-time communication) as well as externally, with an entire ecosystem of partners, subcontractors and distributors. This includes digitally savvy consumers, too, which are getting increasingly involved in the product design process.

As factories become smarter, with machines packed with sensors continuously transmitting data that, when analyzed, can maximize quality, efficiency and return on investment. Closer to achieving operational excellence than ever before, these factories have the flexibility needed to alternate between fulfilling high- and low-volume orders, producing in small batches and delivering made-to-measure items. They can thus accommodate an unlimited variety of business models.

The role of human intelligence

In the creative environment, technology has freed designers from numerous constraints. Today’s 3-D solutions, virtual and augmented reality, have opened up a completely new world of creative possibilities for design teams. Product development departments are also empowered with highly effective and ergonomic tools to develop faster and better products for consumers. Designers can therefore devote themselves entirely to their main mission, which is to create.

As factories regain importance in the value chain, so do the roles of the teams involved. Intelligent machines replace humans to eliminate repetitive tasks and accompany them on a daily basis so they can focus on adding value to the supply chain, where their contribution is irreplaceable.

It would be a mistake to underestimate the impact of these changes, however beneficial, on the redefinition of roles in a company: The acquisition of new knowledge and skills is fundamental to their successful digital transformation. Adopting today’s technology is an opportunity for companies to embrace the fourth Industrial Revolution with newfound confidence. The most forward-thinking enterprises will anticipate change by redeveloping the skills of their teams.

Daniel Harari is chairman and chief executive officer of Lectra since July 2017. He has served as director and CEO since May 2002.