Companies that have transformed to meet the expectations of a digital world understand that change is a process. In some cases, it can take decades. It’s easy to lose sight of the goal when the journey takes years. However, companies with successful digital transformations have a plan and digital advocates that keep the process moving forward.
The following five companies began digital transformation long before it was guaranteed to provide positive outcomes. Yet, the investment in technology is what enabled them to pivot quickly when the business landscape changed overnight.
Pfizer has been working on its digital transformation for more than ten years. When the company started its journey, its 42 manufacturing sites were not connected, and data sharing was impossible. The sites didn’t even use the same legacy systems. Today, Pfizer has replaced those systems with a unified enterprise system.
Deploying automation technologies enabled Pfizer to transform its manufacturing operations into a seamless data-driven engine. The system delivers insights into Pfizer’s supply chain to improve operations and reliability. A Pfizer-developed technology provides visual management and action tracking capabilities across its sites. The solution facilitates collaboration through augmented reality technologies and mobile phones.
Pfizer’s digital transformation is credited with enabling the manufacture of three million additional doses of its COVID-19 vaccine than initially planned. The company’s next digital project is building a strong cybersecurity infrastructure across all manufacturing sites. The goal is to allow insights into shop floor data from remote locations while protecting digital assets.
In 2004, Lego was close to declaring bankruptcy. It needed to transform if it was to survive. In 2005, the company digitized its supply chain processes to provide more precise insights into production delays and manufacturing costs. In 2008, Lego moved its human resources applications to a centralized, enterprise-wide system. In 2009, they moved the shop floor to a digitized system that gave them better insight into factors impacting productivity. By 2011, they had implemented an enterprise-level product lifecycle management solution.
In 2016, Lego’s management team felt that the company had not completed its transformation. It had built an enterprise infrastructure that could support digital solutions, but the company had not yet transformed into a digital-first organization. One of its first steps was to streamline decision-making processes by eliminating silos and reducing the number of oversight boards. The executives then looked at IT.
They wanted to identify technologies that could facilitate collaboration and improve engagement. The company also looked at technology as a way to deliver digitized products to complement their traditional Lego blocks. As part of that effort, they created a customer portal where customers could suggest product ideas. Minecraft is one of the customer-suggested ideas that has been extremely successful.
As with Pfizer and Lego, Home Depot was moving towards digital transformation for years. It built a cloud-based infrastructure to support an increasing volume of online sales. The flexibility allowed the company to address recent logistical challenges and realign warehouses to support online sales. The quick pivot was a result of its transformational journey.
In 2016, Home Depot recognized that the original business model did not address the growing “do-it-for-me” consumer. People were no longer interested in the do-it-yourself projects. They wanted someone to install the products they purchased. Home Depot needed a solution that would allow consumers to choose products and services online and in-store.
The company’s initiative was called OneHomeDepot. In 2018, Home Depot initiated a plan to transform the retail experience into an interconnected digital solution that worked seamlessly across all eCommerce and in-store platforms. To accomplish its goal, they hired over 1,000 technology professionals to create an integrated digital experience. The investment in technology paid off. According to their 2020 annual report, Home Depot’s online digital sales grew 86% over 2019, and their overall sales increased 20%.
Schneider Electric recently announced that it had created the first smart factory in the United States. The facility located in Lexington, Kentucky, modernized a 1950s facility that led to a 90% reduction in paperwork and improved its mean time to repair by 20%.
In the 1990s, the company extended automation to improve the productivity of machining centers. Although the implementation was not fully integrated, it was a starting point for digital transformation. They moved on to automate material handling, which led to data integration for a material-flow-based process.
The facility implemented a centralized system for data sharing. The company built programs to measure the overall equipment effectiveness of its assets and use augmented reality on the factory floor. Employees can access live operational data from any machine with augmented reality capabilities. They simply scan a QR code with a phone or tablet to see data in real-time.
Finally, the ingested data from across the enterprise can be combined with artificial intelligence to build truly intelligent training algorithms.
IKEA was a pioneer of the clink-and-collect delivery model. Consumers ordered in advance and picked up their purchases at the store. This change to online sales required modifications to its website to support payment processing, eCommerce front-ends, and access to inventory tools. The company had to look to digital technologies to create a seamless experience.
Another step in its transformation is the IKEA Planning Studios. This digital solution is available at IKEA micro-stores, where customers can use a 3D imaging program to try out room designs. Consumers use tablets to add items to their virtual cart. The purchases are delivered to the customer’s home. For those consumers who want to leave IKEA with purchases in hand, they will have to visit the traditional warehouse-sized stores.
Micro-stores open a sales channel to reach consumers in large cities where a traditional IKEA store does not exist. Placing a warehouse-sized store in cities such as New York, Los Angeles, or Chicago is cost-prohibitive. By using digital technology, IKEA is expanding its market into areas that were unreachable because of cost.
Without digital transformation, Pfizer would not have been able to ramp up its production of vaccines. Lego would have declared bankruptcy, and Home Depot would not have experienced a 20% growth in sales. IKEA would not have opened another sales channel, and Schneider Electric would have closed its aging Kentucky facility.