Digital Transformation as a Business Strategy
#Scalability #SmartManufacturing #Operationalexcellence #NanopreciseDigital transformation requires an essential mindset change right from the beginning because you are not only shifting from the analogue to the digital but you are also shifting from a physical resource to a virtual resource. This is what a manufacturing leader shared at a virtual fireside organised by Pro MFG Media
The first edition of the Pro MFG Technology Leadership Think Turf ‘Let’s Talk Scalability series’ powered by Nanoprecise Sci Corp focussed on ‘Smart Manufacturing and Operational Excellence’. This insightful fireside chat witnessed two moderators Tanmay Mhatre, Lead Business & Strategy, Nanoprecise Sci Corp, and Manish Kulkarni, Director, Pro MFG Media, engaging in a stimulating conversation with Chetan Shrivastav, Executive Director – Manufacturing, Dalmia Bharat Cement Ltd.
The digital transformation (DT) journey has several elements and also many objectives. Could you shed light on the prioritisation of what to focus on first?
Business transformation and digital transformation are very closely linked as digital transformation is a major change initiative. When you are driving any major change initiative in an organization, it has to be top driven. You need to consider whether the board has got that kind of buy-in or whether the MD or the CEO is really engaged in this initiative and wants to use this initiative as a strategy. So the number one priority is that it should have a top driven focus and it should be very much a part of the top management’s agenda. Secondly, you need to understand how much the team owns it. If these two priorities are met then there will be enough facilitation and enough activity around it.
Let’s also understand that digital transformation requires an essential mindset change right from the beginning because you are not only shifting from the analogue to the digital but you are also shifting from a physical resource to a virtual resource. The whole idea should be how virtual can you be and how you can really shed this notion of owning everything and having everything with your money. So, while people say that resourcefulness is necessary, I say that the resource constraint should be totally out of your mind if you are looking at digital transformation. The top management and the actual team should be aligned towards digital transformation considering it as a strategy and not as a tool. We need to look at digital transformation as a method of doing things or as a way of performing your business.
The new age digital technology challenges have the promise and the potential to increase efficiency, reduce costs, improve customer experience and so on. What are the ideal metrics for optimization specifically for setting the right key performance indicators, KPIs and how do you align your metrics with your organizational goals and operations?
When you are actually looking at the digital initiative, one key consideration is how to actually measure where you are and where you are moving. Like I mentioned earlier, the main focus should be about engagement and ownership. So, that should be our number one metric with regards to how many people actually own it and how much they own. Is there a monthly review where someone from the top management joins in who is looking at the digital initiative as one of his key areas of work? Secondly, when you are making the teams then you have to actually look at who are the people you are involving. Is it that only the ground level people are fully involved and the middle managers or senior level managers are not at all aware or only facilitating in the traditional style? When you are working in digital teams, you may have somebody who has 1/10th of your experience but may be more competent. So there you have to necessarily play the role of being a team player with that person while at the same time being a facilitator. So it is important to have a measurement system around how many people are engaged from top to bottom or from top to the effective force which is implementing it.
Secondly we need to change the old mindset of completing everything and then launching it. Now, the speed of implementation should be the top priority. Suppose you decide to implement a digital initiative in two years after having everything in place. Well, you are already on the wrong path because what you will implement in two years’ time will already be obsolete. So the speed of implementation is of utmost importance. You need to keep on rolling out various upgrades or various corrections, whereas debugging can keep on happening. But this way, you would have implemented the digital initiative in a few weeks or a couple of months.
Thirdly, you need to ensure that the digital initiative is implemented in the business environment. Earlier, when a digital initiative was talked about, it was mostly on the social front where people are interacting socially through some app. But things have changed now. Today, you can actually leverage digital technologies to solve your business problems. And you can do it in a way and in a direction where your competitors are not even looking at.
How do you tackle the pilot purgatory stage, come out of it and scale it?
Due to the involvement of the top management at our organization, we have got the entire digital transformation team working with us and very senior people are heading it. It is being continuously reviewed and in every unit we have a person who is looking at digital transformation aspects with the entire team aligned to the initiative. I am happy to share that the unit where I am located right now is one of the most advanced and one of the most efficient units in the cement industry. From the generic perspective, what is important is to understand whether people are looking at digital transformation as a methodology to change their business or whether they are looking at it as a way of solving their business problems or are they looking at it just as a tool? For example, I get this particular tool and then it is implemented. Somebody else comes and also implements it. My point is, whether someone owns that entire digital transformation or is it being taken only as a tool? I see a lot of initiatives in various units and various businesses. But what I see is pockets of excellence.
Then we get surprised as to how an excellent initiative implemented at one location is not getting replicated anywhere else. Secondly, I will again come back to the top management focus. Well, all these initiatives are like a rubber ball. When you bounce it down once, you have to hold it and bounce it back again with the same force and energy otherwise it will slowly and eventually die down. Wherever I have seen any initiative working well right from Six Sigma, TPM, TQM, to Lean and Digital Transformation, it has always been a case where the top management does not hold it back but rather bouncing it back.
So, number one, believe in the methodology which you are adopting, in this case, digital transformation. And secondly, facilitate it back with the same energy. That’s how you can scale things up.
The cement industry is dust in and dust out. So the solutions needed to monitor the machines have to be robust enough to deal with this environment. What are your thoughts on the same?
I am really proud to say that the Indian cement industry is the most forward looking industry in the entire world and we can beat every other country hands down. There is a simple reason behind it that we are a growing nation with enormous infrastructure development. And the industry is booming as cement is an essential material required for all the infrastructure development that is happening. We have so many homes, so many bridges, so many roads and so many other infrastructures to be built. For that, we need a lot of cement. And as a result, the cement industry is an industry where you can really invest into innovating, and making it more competitive as well as more environment-friendly. So that motivation is there for the entire industry to keep getting better in every possible way. To give you an example, at my location I have got three units. The first unit was made in the 1950s in the service of the nation to build the Hirakud dam. When I joined this unit, I could see that everything has been changed and converted in terms of equipment or technology. Similarly, in many other older units that were commissioned in the 1980s, they have changed everything from 1990 to 2000. In fact, today, our unit is like a new unit. Thus, this industry has every time adopted the latest technology and has kept on improving itself wherever possible. So, if you come to any of our units, instead of dust you will find flowers growing inside. In fact, my vision is that this particular unit should look like Singapore, where your cement unit is located inside a forest!
Secondly, people in this industry have really innovated and modified themselves. The old units are modernizing and the new ones are coming up with robotics and automation. Environment is really taken care of and we do not have dust coming out of our chimney or stack or from anywhere. All material is stored in a manner that it will not fly. Of course, the latest generation equipment, which is coming in, really does not require that kind of temperature and dust free environment. In fact, they are equipped to work in many different kinds of setups. That itself is solving most of the problem and I do not see that part as a challenge.
Do you think completely wireless sensors (sim based) are the future? How much does the solution scalability matter to you considering mass deployment?
Actually wireless sensors are the only thing which will survive! You cannot put everything on wires; there are even plans to transmit power wirelessly. So, that entire mindset shift has to happen there. Today, sim based or cellular based technologies are really coming to the industry’s aid and on top of it now, you have the blockchain technology. Even the server can work wirelessly; you can simply move to the blockchain and then develop applications around it. It will bring much more transparency and credibility as compared to the wired ones.
Recently, I was talking to a boy at NIT Raipur and he shared a very good idea with me for the safety of our people who work in the underground mines and other confined spaces. He said he can fit a small sim on the helmet and if a person gets stuck anywhere, then this sim will help the person to get connected through a mobile phone. It will guide him to find an escape route from the mine. This cannot happen if you keep thinking about having wires. So whether it is wireless or blockchain or the sim technologies, they are the way to go. And maybe in another three to four years, even the cloud will become obsolete and blockchain will be everywhere. I think that is the future, which is inevitable.
What kind of digital technologies excite you the most and which are the ones that you want all plants to have in one or two years down the line?
Blockchain is one technology that really excites me. So, wherever there is an application, which makes you much more transparent and ready for the future is what I would like to implement. We are in an age with so much uncertainty and so much ambiguity. Even all the experience which people have gathered over thousands of years has really become nothing because you cannot actually work with that experience as what is happening is something beyond what you have experienced earlier. So we need a technology that actually liberates everyone. And blockchain is certainly one technology that could achieve it and it has various applications right from villages to banks to manufacturing. Basically, what excites me is a technology that makes things, which are otherwise deemed to be impossible, possible. Let’s take the example of a silo where you have stored a material like clinker at 100 degrees temperature. This silo was not constructed so that you can open it and go inside. It is not safe to do that. Now there are drones available which can fly inside your silo with night vision. And they can safely check the entire silo for strength and condition. There can be many more examples like that. So I am very excited about the kinds of possibilities which digital transformation is bringing in, and when I see technology delivering things which are not at all deemed possible by any human intervention.
How should organisations view ROI from a digital transformation perspective?
First and foremost, the return on investment on technological transformation cannot be viewed in a smaller perspective of six months or one year. You always do a certain part, which is for a very definite objective, and you do a certain part, which is more for failing or experimenting. All experiments which are failing are actually giving way to something else, which you will achieve in future. So, you should always put aside some amount only for failing, because then you will know that this is the way it cannot be done. And that’s how you know 99 ways in which it cannot be done. With technology, you have failed 99 times faster than others. And so, when you are able to find the right way, you will be the first to do that and that is much more important than how many times you have failed. So, that part cannot be linked with ROI. All intelligent organisations or intelligent people keep aside some time to fail.
Secondly, when you are talking about technological transformation, you should think of it as a profitable journey. So, when you are looking at a span of two years, you should have maybe 24 milestones where I should be able to leverage this kind of benefit out of it. And that should be a clear business advantage, because it cannot be done in a philosophical manner only for the sake of doing it. Once you have separated yourself from the experimentation part, the second part has to be very tangible and very clear. You have to link it to a business objective, which is very clear and crisp. You cannot keep on working in a vague manner that since everybody is transforming, I should also transform. You have to solve your problems.
Let’s look at one example. Suppose the turnaround time of your trucks is very high. Now, you can either do it in the traditional way of monitoring everything on an Excel sheet or you can make use of GPS or RFID. But you should be very clear that within one and a half month my turnaround time should come down. And that tangible result has to happen by deploying the RFID or maybe with the plant logistic management system. So if your ROI is linked to a tangible business interest then you are aggressive in a way in which you are actually trying to get that objective delivered. My idea is that when you are monitoring ROI, it should be on a modular basis. In areas where you are not monitoring ROI because you are experimenting, it should be on a trial basis.
