Managerial Practices for the Digital Transformation of Manufacturers
Abstract
:1. Introduction
2. Theoretical Background
2.1. Digitalization and Digital Transformation
2.2. Theoretical Perspective on Manager Competencies and Roles in Digital Transformations
3. Method
3.1. Case Selection
- Drivers of digital transformations (e.g., customization pressure, technology change, etc.);
- Barriers along transformation (e.g., lack of capabilities, lack of management commitment, etc.);
- Number of finished and ongoing digital technology projects (e.g., cloud, big data, etc.).
3.2. Data Gathering
3.2.1. Semi-Structured Interviews
3.2.2. Printed and Quantitative Data
3.2.3. Conference
3.3. Data Analysis
4. Results
4.1. Case Description
- Drivers for the digital transformation;
- Challenges in the digital transformation process;
- Needed competences and managerial practices used to overcome these challenges;
- The outcome/results.
4.2. Case Analysis
4.2.1. Strategic Approaches
4.2.2. Collaborations
4.2.3. Cross-Functionality
4.2.4. Usage of Data
4.2.5. Project Organization and Learning
5. Discussion
6. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Technological and Commercial Factors | WPC | ASC | PPC | EMC | AGC | MFC | ABC | PTC |
---|---|---|---|---|---|---|---|---|
Cost pressure | → | → | ↗ | → | ↑ | ↑ | → | → |
Delivery speed | ↑ | ↗ | ↗ | → | ↘ | → | → | ↘ |
Quality | ↗ | ↗ | ↑ | ↑ | ↑ | ↑ | → | ↑ |
Flexibility | ↘ | → | → | ↗ | → | ↗ | ↘ | → |
Innovativeness (product, process) | → | ↑ | ↑ | ↗ | ↗ | ↑ | ↗ | ↗ |
Overcome/face barriers in the digital transformation (lack of capabilities, feasibility, resistance,…) | 3/6 | 7/12 | 0/7 | 4/8 | 7/10 | 5/12 | 3/13 | 5/9 |
Finished/ongoing projects related to digital transformation | 5/3 | 10/30 | 5/10 | 5/15 | 50/200 | 6/8 | 20/10 | 10/5 |
Market diversity/demand variety | ↗ | → | ↘ | ↘ | ↗ | ↗ | → | ↘ |
Product diversity | → | ↗ | ↘ | ↘ | ↗ | ↗ | → | ↘ |
Employees (FTE) | 8200 | 18,800 | 11,500 | 36,300 | 29,500 | 9000 | 6200 | 37,200 |
FTE dedicated to digitalization | 30 | 20 | 30 | 120 | 50 | 30 | 20 | 90 |
Revenue (in bn USD) | 2.81 | 3.23 | 2.95 | 7.63 | 5.89 | 1.00 | 1.5 | 11.6 |
4-year revenue development (CAGR) | +2.1% | +3.2% | +2.2% | +11.7% | −3.1% | +1.7% | +6.3% | −2.5% |
R&D expenditures of revenue | 9.2% | 8.0% | 4.7% | 11.9% | 6.5% | 3.0% | n/a | 4.2% |
Digitalization invests of revenue | 0.5% | 1.0% | 10% | 1.0% | 0.3% | 2.0% | 0.5% | 0.1% |
Company | Industry Type | Position | Workshop | Durations (min) |
---|---|---|---|---|
WPC | Wood Processing Industry | COO, Head of Operational Excellence and Projects | 1-day on-site plant tour | 1 × 30, 1 × 90, 1 × 30 |
ASC | Automation Solution | Chief Digital Officer, Lean Team | 1-day on-site plant tour | 1 × 60, 1 × 100, 1 × 30 |
PPC | Precision Printing | Lean Manager | 1-day on-site plant tour | 1 × 90, 1 × 30, 1 × 30 |
EMC | Electronic Miniature | Plant Manager, Head of Lean | 1-day on-site plant tour | 1 × 60, 1 × 90, 1 × 30 |
AGC | Automotive Gear | CEO of Division, Lean Team | 1-day on-site plant tour | 1 × 60, 1 × 60, 1 × 30 |
MFC | Mechanical Fastening | COO | 1-day on-site plant tour | 1 × 90, 1 × 30 |
ABC | Advanced Building | COO | 1-day on-site plant tour | 1 × 90, 1 × 30 |
PTC | Power Transformation | CEO, Head of Operational Excellence | 1-day on-site plant tour | 1 × 30, 1 × 90, 1 × 30 |
Industry | WPC | ASC | PPC | EMC | AGC | MFC | ABC | PTC |
---|---|---|---|---|---|---|---|---|
Dominance | ↑ | ↗ | ↑ | → | ↑ | → | → | ↑ |
Growth | → | ↗ | ↘ | → | ↑ | → | ↻ | → |
Market characteristics | ||||||||
Product customization | ↑ | ↗ | → | → | ↗ | ↓ | ↑ | ↘ |
Product life-cycle duration | → | ↗ | ↑ | → | → | → | ↑ | → |
Organization | ||||||||
Degree of centralization | ↗ | ↗ | → | ↘ | → | → | ↘ | → |
Digitalization emphasis | ↑ | ↑ | ↗ | ↗ | → | ↗ | ↓ | ↘ |
Barriers | ||||||||
Budget restrictions | ✓ | X | X | X | X | X | ||
Time pressure | ✓ | X | X | ✓ | ||||
Shortage of manpower | X | X | X | ✓ | X | X | X | X |
Lack of capabilities | X | X | ✓ | ✓ | X | X | ✓ | |
Expensive technologies | ✓ | X | ✓ | X | X | |||
Existing infrastructures restrictions | ✓ | X | X | ✓ | X | X | ||
Technical feasibility | ✓ | X | ✓ | ✓ | ✓ | ✓ | ||
Missing norms and standards | X | X | X | ✓ | X | X | ||
IT security | X | X | X | ✓ | X | X | X | X |
Lack of management commitment | ✓ | ✓ | X | ✓ | X | X | ✓ | |
Resistance of employees | ✓ | ✓ | ✓ | ✓ | ✓ | X | ✓ | |
Timing | ✓ | X | ✓ | ✓ | ✓ | |||
Strategic digitalization approach | ||||||||
Top-down ↓/bottom-up ↑ | ↓ and ↑ | ↓ and ↑ | ↓ and ↑ | ↓ and ↑ | ↓ and ↑ | ↑ | ↓ | ↓ and ↑ |
Growth emphasis | ↗ | ↗ | ↑ | ↑ | ↗ | ↑ | ↗ | ↗ |
Production emphasis | ↑ | ↗ | ↗ | ↗ | ↗ | → | ↘ | ↗ |
Collaboration with | ||||||||
Customers | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
Suppliers | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
research institutions | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
Associations | ✓ | ✓ | ✓ | ✓ | ||||
work councils | ✓ | |||||||
competitors | ✓ | ✓ | ||||||
Data usage and management | ||||||||
Production data | A/P | A/P | A/P | A/P | A/P | P | P | P |
Logistics data | A | A/P | P | A/P | P | A/P | A/P | |
Field data | P | A/P | A/P | A | A/P | |||
IT Systems | ||||||||
Integration level | ↑ | ↑ | ↑ | ↑ | ↘ | ↓ | ↑ | ↓ |
Mobile devices on shop-floor | ✓ | ✓ | ✓ | ✓ | ✓ | |||
Process and product maturity | ||||||||
Digitally advanced products | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
Digitally advanced processes | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
Effect on productivity | ||||||||
Direct labor hours | ↓ | ↓ | ↓ | ↘ | ↓ | ↓ | ↓ | |
Raw material input | ↓ | ↓ | ↓ | |||||
Energy consumption | ↓ | ↓ | ↓ | |||||
Machine hours | ↘ | ↘ | ||||||
Indirect labor hours | ↓ | ↘ |
Theoretical Foundation (Based on Kotter 1996) | Barriers | Managerial Practices for Digital Transformation | Managerial Competencies for Digital Transformation | Propositions |
---|---|---|---|---|
Create a sense of urgency | No specific challenge identified |
|
| PA |
Build a guiding coalition | Variety of needed capabilities |
|
| |
Form a strategic vision and initiatives | Variety of opportunities, uncertain ROI |
|
| |
Enlist a volunteer army | Options of organizational forms |
|
| |
Enable action by removing barrier | Resistance of employees (e.g., job danger) |
|
| |
Enable action by removing barrier | Variety and interdependencies of digital technologies, existing infrastructures restrictions and technical feasibilty |
|
| PA |
Lack of capabilities, shortage of manpower |
|
| PB | |
Organizational silos |
|
| PC | |
Increasing decentralization reduces manageability |
|
| ||
Enable action by removing barrier | Willingness to learn from and share mistakes |
|
| PD |
Risks of investments, uncertain ROI (Budget restrictions) |
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Generate short-term wins | Uncertain ROI |
|
| PA |
Sustain acceleration | Variety of prerequisites for local implementations |
|
| PA |
Institute change | Sustain new ways of working and behaviors |
|
| PD |
Aggregated Competencies for Managers to Foster Digital Transformation |
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Budde, L.; Benninghaus, C.; Hänggi, R.; Friedli, T. Managerial Practices for the Digital Transformation of Manufacturers. Digital 2022, 2, 463-483. https://doi.org/10.3390/digital2040025
Budde L, Benninghaus C, Hänggi R, Friedli T. Managerial Practices for the Digital Transformation of Manufacturers. Digital. 2022; 2(4):463-483. https://doi.org/10.3390/digital2040025
Chicago/Turabian StyleBudde, Lukas, Christoph Benninghaus, Roman Hänggi, and Thomas Friedli. 2022. "Managerial Practices for the Digital Transformation of Manufacturers" Digital 2, no. 4: 463-483. https://doi.org/10.3390/digital2040025