Digitalization of production: the challenge of our time

Part 1: Why many companies struggle with digital transformation

training of employees for digitalization of the production in a manufacturing company

Companies in all branches, and especially in the industrial sector, face the same challenge: Existing production processes need to be transitioned into the digital age. Many, however, overlook the opportunities and fail to harness all available know-how for their company.

  • Digitalization is not an automatic process and problems are usually home-made
  • Implementation frequently fails due to inadequate knowledge management
  • New know-how is thus often only shared among a few individuals

Digitalization of production affects everyone in the company

No-one disputes the fact that digitalization affects all areas of the economy. Everyone is aware that the coming years will be dominated by the topic of digital transformation. Even so, many struggle with the implementation in their own companies, or else shy away from the challenge. But without the right know-how in the decisive places, Industry 4.0 and the digitalization of manufacturing processes cannot succeed.

In our two-part series, we would like to show you how important it is to understand digitalization as a worthwhile challenge and opportunity! A challenge which you should best tackle and master yourself in order to be successful. We will also identify factors which are critical for the success of digitalization in your company, and the potential obstacles which must be taken into account. In the first part, we will begin by taking a look at those companies who fail to heed these words and outsource the whole subject of digitalization to others.

Are you well advised on digitalization?

Digitalization now! That is often the battle cry from company management, albeit without knowing exactly what this means or how it is to be achieved. That is initially not necessarily a problem. After all, for every arising question, there are experts who offer to share their advice and knowledge with others. For some companies, however, that is not enough. The consultations are barely over before they start demanding implementation:

They even get angry that nothing happens automatically after they have paid so much money to be shown the solution. They grumble with their consultants: “We don’t just want to be lectured all the time. It’s unacceptable that you are leaving us to tackle implementation alone. We demand that you also implement what you have only been showing us so far.”

Source: FAZ

That is how Gunter Dueck describes a common attitude of companies towards their consultants. In many cases, they expect them now only to show how digitalization could be achieved internally, but also to implement the process as well. Despite the fact that their job was actually just to advise.

That is furthermore not a real solution to the problem. After all, no knowledge will have been gained at the end. On the contrary: Digitalization cannot succeed in this way. And the more such tasks are externalized, the more difficult it becomes to retain key employees and to attract new talents. Talents love challenges and want to take on responsibility – in the competition for skilled workers, contemporary IT plays an increasingly important role.

No 4th industrial revolution without knowledge transfer

The reason for this lack of know-how within companies is often to be found in their decision to concentrate solely on core competencies. They are not prepared to take risks, place too great a focus on increasing profitability, and try to maximize perceived advantages in their core fields. Everything else is outsourced.

Startups are different. They also seek assistance, but then try to solve problems themselves. They act on the principle of capacity building. Risks are accepted, experiments are undertaken, and any mistakes are translated into new knowledge.

One fundamental problem under which most companies suffer is their inadequate handling of existing knowledge. Knowledge management is not a new topic, however – also for the big names in industry:

“If only Siemens knew what Siemens knows, our figures would be even better.”

Source: cogneon

That is how CEO Heinrich von Pierer described the situation within the company at the annual press conference in 1995. Even back then, there was awareness for this weak spot in the group’s armor: Inadequate knowledge transfer between individual departments and the different divisions.

Advancing digitalization has now made it crystal clear that many companies have not yet solved the problem. According to a study conducted by Skillsoft, companies all over Europe are facing the same problem: Employees must be provided with the necessary know-how for digital transformation.

Statistics on challenges for companies to digitize production

Training measures to help employees adapt to an increasingly digital work environment are seen as the greatest challenge by managers responsible for personnel development. The surprising thing: Only just over half have a corresponding plan!

57% have drawn up a training plan, but know that it is still a long road ahead for their companies. Only 2% see no need for action.

Source: Skillsoft

Targeted development of know-how in the company

Knowledge is present in enormous amounts in just about any company. In most cases, however, it lies dormant and is not being used. “If only Siemens knew what Siemens knows…” The same applies to so many. New knowledge is not shared across the whole company, but instead lands in silos. Instead of breaking down barriers, companies are increasingly likely to externalize required knowledge and rely solely on the capabilities of consulting offices. The priceless wealth of existing knowledge needs to be made accessible to everyone in the company, however, in order to reap the benefits of digital transformation. Employees need opportunities to access existing as well new knowledge.

We will be showing you how you can master this challenge for your own company in our next article Digitalization of production: How to. Sign up to receive our blog news here, and be sure not to miss upcoming blog articles.

Further articles on the topic:

Contemporary IT for the ‘war for talents’

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André Heller

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