The impact of the pandemic, the climate and energy transition and the change in market conditions caused by technology are increasing the pressure on organisations to evolve/transform their operations and, namely, their operations management. Organisations that have embraced digital have yet to transform their management systems overnight - they have carefully diagnosed their current state to outline their future operating model.
The integration of digital into operations boosts the development of new operating models. Consequently, digitised processes enhance opportunities for organisations to deliver products and services more efficiently, quickly and customer-centric. However, there is an apparent difficulty: the digitalisation of operations lacks proven experiences and examples and a comprehensive understanding of achieving the benefits of its adoption.
Adopting technologies and solutions that enable adaptability and real-time decision-making in dynamic environments must be accompanied by organisational models and operational strategies geared towards operational excellence in the value chain. The challenge is to design organisational and management models that promote the alignment of the operational strategy with the organisation's competitive strategy, involving the entire chain, namely its resources and processes.
One key point emerges from this: without an appropriate operations strategy to capture and maximise the value of digitalisation, companies will not be able to focus rationally on technological investments and the necessary operational changes.
To begin with, organisations must clearly define their objectives and goals when embracing digital. It is crucial to understand that digitalisation is not an end but a means to achieve desired results. This can include improving operational efficiency, optimising the customer experience, developing new products or services, or even exploring new business models.
The digitalisation of operations is undoubtedly a challenging journey. It requires not only the incorporation of technology but also a fundamental cultural and strategic change. The first step to success is to formulate a rational operations strategy that is aligned with the business strategy and enables the value of digitalisation to be captured and expanded. In addition, collaboration and the transversal involvement of the workforce are fundamental.
Digitalisation is not an initiative that should only be driven by the technology side. All areas and employees must be aligned with the defined vision and objectives. Education and training are essential components to ensure that everyone is able to integrate into the 'new' processes effectively.
Activities in operations are typically characterised by high levels of variability (for example, in operational performance, quantities ordered and their variety, delivery dates, and demand, among others) and the occurrence of disturbances (such as equipment breakdowns). These uncertainties trigger a significant deviation between the plans drawn up and their execution. It is in this context that it is essential for the decision-making process to operate quickly and in real-time. As well as incorporating conditions and restrictions generated by the use of technology (e.g. robotics), it must be supported by advanced analytical methods that promote the efficiency, ﬂexibility and agility of production systems. In this context, the Digitalisation of Operations takes us to three fundamental levels: visibility, transparency, and predictability.
In terms of visibility, the digitalisation of operations makes it possible to know what is going on comprehensively and in real-time! With the necessary sensorisation and connectivity (e.g. IoT), organisations can monitor every step of their processes, identifying potential bottlenecks, inefficiencies and opportunities for improvement. This provides valuable insight into the current state of operations, allowing them to facilitate more informed and agile decision-making.
Transparency is a critical element in understanding what is happening. The use of advanced analytics will allow in-depth analysis of causes and effects and can reveal factors that are impacting different types of losses (e.g. associated with response, efficiency and quality). This not only improves internal accountability but also provides a clear view of why certain events occur. The ability to identify the origins of problems is essential for continually improving processes.
Predictability is another crucial advantage of digitalisation. By using advanced data analysis, organisations can anticipate trends, identify patterns, and predict future scenarios. This not only helps to mitigate risks but also to optimise operations. The ability to expect what might happen allows companies to be better prepared to make proactive and strategic decisions.
Ensuring visibility, transparency and exploiting the potential of predictability means having a significant level of maturity when it comes to an organisation's ability to use data and advanced analytical methods to support critical decision-making processes in operations management. Data and analysis capabilities, therefore, play a vital role in the digitalisation of operations. Companies must invest in robust data analysis solutions to generate relevant information in real-time and use it to make informed decisions and identify areas for improvement.
Regular monitoring of results is essential to assess progress toward the objectives defined in the operations strategy. If necessary, companies must be willing to iterate and adjust their approaches as new opportunities and challenges arise. In this context, adapting to change requires constant monitoring and adjustments as necessary.
In short, the digitalisation of operations is a promising way to improve efficiency, agility and the customer experience in organisations. However, it is essential to have a clear strategy, involve the whole team and invest in data analysis to maximise the value of this transformation. Once the operations strategy has been defined, the next step is to implement the necessary changes gradually. With the right commitment and adaptation, companies can make the most of the opportunities offered by the constantly evolving digital world. It's important to note that digitalisation doesn't have to be a complete Transformation all at once but rather a continuous Evolution.
Article by Américo Azevedo, codiretor of the Postgraduate Programme in Operations Management.