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Obstacles to the path of digitalization

The digital transformation of companies, of their internal processes and the relationship with suppliers and their customers is not only a trend, but it is the way forward for manufacturing companies that strive to gain the best possible position in an increasingly competitive environment. As any change, digital transformation journey puts managers and decision makers in front of various type of barriers, but the driving forces are giving them the thrust necessary to pass over these obstacles. What they should keep in mind is that Industry 4.0 bears the potential to completely reshape the relationships with customers, employees, the market and they need to complete the journey to be rewarded and fully benefit of the advantages offered by a state-of-the-art organization. 

An in-depth analysis of the level of digital transformation of companies in Serbia

In the article ”Challenges and Driving Forces for Industry 4.0 Implementation” published in May 2020 on MDPI institute website, a joint research team from Universities of Belgrade and Zagreb take an in-depth analysis of the level of digital transformation of companies in Serbia based on a digital maturity model, and examine their managers’ opinions on the most important driving forces and implementation barriers. 122 high-level managers within the Serbian manufacturing sector responded to a questionnaire and the findings show that efficiency factors represent the main driving force, while the lack of competences and financial resources represent the greatest barriers to Industry 4.0 implementation. A very interesting finding is that customer satisfaction is perceived as a significant driver of Industry 4.0, which is a clear indicator that digitally maturing companies implementing Industry 4.0 exhibit higher responsibility, taking care of sustainable value growth for both owners and consumers. 

Many organizations do not take any action on smart factory investment and initiatives

According to a 2019 joint study of Deloitte and the Manufacturer’s Alliance for Productivity and Innovation (MAPI), “one of the biggest challenges of smart factory adoption is that many organizations simply do not take any action on smart factory investment and initiatives”. This study shows that almost half – 49 percent – of the managers were not thought about or thought, but not planning any initiatives related to smart factory. For those managers, lack of experience – implementation requirements and prioritization – was the top challenge (34%) that determined them to postpone the investments, followed by difficulty in adapting (32%), lack of compelling business case (32%) and lack of overall strategy (30%). 

The associated risks

Associated risks are also an important barrier and the managers are very cautious: “In a production environment, making a mistake can bring a production line down or harm a human worker, so the stakes are very high,” said one of the managers that took part to survey. Also, among other identified risks were operational risks and cyber risks. Concerns regarding disruption to the day-to-day business and the prospect of loss resulting from inadequate or failed experiments or change, on one hand, and disastrous effects if smart factory initiatives are implemented without taking precautions, such as creating a cyber risk strategy, on the other hand, put on hold digital transformation of the factories. 

How can companies overleap these obstacles? Of course, an inside transformation team is an option, but limited experience in such processes could turn the road into a long and winding one. The easiest way to reach your goals is working with organizations with know-how and a proven record of successful transformations. Even it is a fresh company on the market, KFactory relies on the expertise of a group of consultants who gathered a valuable pool of best practices ready to be put into practice and guide you during a swift journey. 

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