Digital Operations: A Smarter Approach

Stop tinkering, and focus on the digital trends that really matter

- Nate Anderson, Pascal Roth And Pierre-Henri Boutot

  As the leadership team at a consumer products company debated its digital strategy, two opposing views emerged. To stay competitive, some argued, the company needed to invest several hundred million dollars to automate its existing network of large regional plants. Others insisted it should hold off given how rapidly digital was changing the business. What if automation, mass customisation and increasing customer expectations require a future network of much smaller plants that are close to the customer and capable of same day delivery?

The leadership team was prepared to make a large investment, but it feared betting on the wrong trend. Yet if it waited, it risked falling further behind its competitors.

This catch-22 is playing out in the boardrooms of many companies as executives map out digital operations strategies. Many understand that to be competitive 5 to 10 years from now, they need to start building their digital capabilities today. They also know that investing in digital operations is no longer just about improving efficiency. Big Data, advanced analytics and connected hardware are powerful tools that can change a company’s strategic direction and create new sources of competitive advantage.

Often, companies hesitate to invest because the fast-moving digital universe is difficult to reconcile with the long lead times required to build out new assets in operations. On top of that, operations tend to be large and mission critical, so leadership teams have little room for error. As a result, operations, with its traditional long-term approach to planning, is particularly vulnerable to digital disruption.