Firms advised to leverage digitization for faster recovery, higher profitability

Businesses must utilize digitalization not just to rebound faster and stronger from the effects of the pandemic but also to achieve profitability as soon as possible, according to an IT expert.

For companies, their ability to recover and become profitable will depend on how swiftly they can digitize, apply scalable and sustainable technological solutions, and improve their digital skills set, said Buryan Apacoglu-Turan of Simularge A.S.

Turan, who is chief executive officer of the Turkish start-up company offering software solutions for manufacturing industries, said the most crucial strategy for a faster pandemic rebound and a return to productivity and profit is to utilize digitalization.

“First you need to digitize the data and collect the information related to your operations and then leverage this data” for business improvement and development of new business models, Turan said.

After crunching the data, testing the digital solution and finding that it works, “you need to scale this digitalization” from one factory to another, said Turan, adding that not scaling up will also not widen profitability margins.

At the same time, it is important to ensure that digitalization contributes to sustainability. “We all need to participate in sustainability, particularly in the industrial domain, because the global loss from manufacturing processes is US$8 trillion,” she said.

In addition, companies must improve their in-house digital skills set to be able to scale up and adapt to the new era of industrial transformation.

Turan, who spoke at a recent Asian Productivity Organization forum, also noted that “digitization, AI, automation, technology enablement” leads the five productivity drivers for profitability.

“So it’s better to start digitization sooner. If you start earlier, your business may become more profitable by 2024,” she continued.

The other drivers—operations processes; people and organization; resilience and operational agility; and the environmental, social and governance aspect—should also be given attention but “we all need to start focusing on digitalization,” Turan stressed.

In addition, she pointed to research showing that manufacturing is the sector with the highest potential for automation. Because it is an operationally intensive sector, manufacturing is easier to transform digitally.

Turan added that studies also show that factories that have started to implement digital solutions respond better and faster to the effects of the pandemic “because they have more agility to respond to drawbacks” owing to a higher Industry 4.0 maturity level.

Thus, she said those who still have not begun to digitize “need to hurry up in improving their digital skills set and digitalization roadmap because if you want to have more flexibility and agility to adapt to the new era, you need to start digitally transforming very fast.”

As an example, she said Beko, a Turkish appliance and consumer electronics brand, was able to improve its operations after installing a smart decision-maker app that helped it produce more high-quality products, reduce scraps by 50% and save 1,600 tons of plastic materials, leading to savings of EUR2 million annually. The company, she said, is now scaling the technology across their nine global sites.

Finally, Turan advises companies to choose well their technology and technological infrastructure, making sure the solution they get can be scaled swiftly from one machine to another for increased productivity and sustainability.

Companies should also make sure they have the in-house technical talent and digital skills set to support the transformation by instituting training plans for the workforce. This will allow the firm to address issues that may arise later on with the technology solution brought in from the outside, and even enable the in-house talent to develop their own solutions.

“It shouldn’t be a black box solution—you need to contribute to the solution to make it more sustainable in the future,” Turan concluded.

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