Pick a business sector (you know more about it) and provide ideas and suggestions for digital transformation based on the five principles mentioned in the case (i.e. how the principles can be applied within the selected business sector)? Justify your answers.

Globally increasing competition has raised the need for advanced technologies and digital transformation in the manufacturing organizations. Particularly, in the automotive industries companies are required to introduced innovative strategies and actions to ensure competitive strength in its assets and business process (Piccinini, Hanelt, Gregory, & Kolbe, 2015). Digital transformation can bring several benefits to the automotive industries therefore companies working in this sector are rapidly adopting modern technologies and transforming their businesses to the digital system from manual operations.

The business of the automotive industry requires digital transformation for improvement in business operations. Digital transformation can be implemented and applied in the automotive industry by following key ideas regarding the application of five principles. Five principles for digital transformation in the auto industry are enlisted below:

1)      Template-based

2)      Business Driven

3)      Matrix Organized

4)      Tight Supplier Steering

5)      Cascaded Planning

In the automotive industry, key identified challenges are related to the inefficiency of owners between global IT and local business. Moreover, other identified challenges are linked with an autonomous system of production assembly in the automobile industry. Furthermore, supplier relationship and program scheduling related challenges are also tackled by the principles of digital transformation.

1)      Template Based Principle:

The first idea behind digital transformation is to apply the template-based principle in the automotive industry for the improvement of IT solutions in the organization. Considering this idea, business management will upfront investment into increasing capabilities of the organization in the automation system. To implement this principle, managers will develop strategies of IT solutions and blueprints for business process in the form of templates. Thus, based on these templates (strategies and blueprints) company will implement a template based principle.

2)      Business Driven Principle

The second principle of digital transformation is business-driven. This principle will be implemented in the auto manufacturing company to bring effective solutions for global IT and local business owners related issues. For the implementation of this principle, managers are required to give emphasis on business ownership as compared to IT ownership.

Regarding this, the idea is to ensure that business sponsors and their interest in the business are given more importance than the IT system. For instance, in the process of vehicle painting or refinery plant managers will pay special focus on cost-effectiveness and waste control strategies for the benefit of business owners rather than promoting an IT system.  Furthermore, business managers will specifically focus on the use of a "push" strategy rather than using a pull strategy at the workplace of an auto manufacturing company.

3)      Matrix Organized Principle

The third idea is about the implementation of the third principle "Matrix organized”. The idea is to implement a matrix organized principle by combining program control with project autonomy at the automatic vehicle parts manufacturing plant. For the implementation of this principle, cross-functional streams would be developed at part manufacturing systems. Moreover, the IT system will be installed and implemented between the manufacturing sector and the administration department to ensure propose a communication system. This process will facilitate as liaison to ensure delivery of quality services and monitoring of errors and defects. Moreover, a network of stakeholders is also required to be developed (Winkler & Kettunen, 2018).

4)      Tight Supplier Steering Principle

The next idea is regarding the application of “tight supplier steering” principle in the auto manufacturing company.  Tight supplier steering principle will be implemented in the supply chain process of the company. The supply chain of the automotive industry includes internal suppliers and external suppliers. Internal suppliers are inter-departmental suppliers. For instance, employees who provide ready-to-use seat covers (after cutting, stitching and washing process) are the internal suppliers for the department that will put-on seat covers on vehicle seats. While on the other hand, external suppliers of the auto manufacturing industry are presented below:

These suppliers are those who provide raw materials (including paints, steel, fabric, and rubber) and then sell out vehicles at showrooms (also known as car dealers). By implementing this principle, the company will ensure positive relationship development with suppliers. Regarding this, business managers will set milestones and develop strategies for proper communication with suppliers using digital technologies.

5)      Cascaded Planning Principle

            After the implementation of tight supplier steering principle, the next principle is cascaded planning principle. The idea behind the implementation of the cascaded planning principle is to ensure flexibility in the timeframes of the auto-manufacturing company to ensure stability in the vehicle manufacturing projects. This principle will be implemented in the organization by developing plans about the required level of flexibility in different projects executed by the company. Moreover, schedules will be analyzed to find out possible time delays and space. Within clusters, high-level parallel rollouts will be tried to ensure flexibility.

Q2 Once you list down the ideas for the above question; propose a process model for

digital transformation where you need to explain at which stage(s) of the digital transformation

each of these ideas can be applied?

The key principle of digital transformation at the automotive industry are Template-based, Business Driven, Matrix Organized, Tight Supplier Steering and Cascaded Planning. These principles will be used in the automotive industry to support digital transformation in the selected company. However, for this purpose, some ideas are developed in the previous questions. These ideas will support the implementation of five digital transformation principles in the company. However, each of these principles (Template-based, Business Driven, Matrix Organized, Tight Supplier Steering and Cascaded Planning) will be implemented at a different stage or phase in the process model (Karabegović & Husak, 2016; Piccinini, Hanelt, Gregory, & Kolbe, 2015).

The simple process model for the digital transformation of the automobile company is presented below:

Following this simple model, templates will be developed in the initial stages while on the other hand, the company will review the outcomes of the whole project in the second last stage to bring improvement and refinement for the next time. Furthermore, the process model is discussed in more detail in the following paragraphs (Gorlach & Wessel, 2008).

The template based principle is here used to accomplish the goal of IT architecture introduction in the company. IT architecture is essential for the proper digital transformation in the company. Therefore, it will be implemented in the initial stages to support other phases and principles to have alignment with the goals of digital automation in the auto manufacturing company. Templates will be developed for all business process that will be transformed into the digital system from manual systems. For instance, in the vehicle manufacturing process, all assembly line processes will be made digital by developing templates for these processes.

Here in the third stage, the company will identify the owners and leaders for all developed templates. First of all, all major and minor stakeholders of the selected business process will be identified and then managers will select the most potential stakeholders. The selected business owner will make decisions regarding implementation and process execution. Department head, sponsors, or executive officers can be identified as business owners at this stage. However, a steering committee can be also developed by including all potential sponsors and executive officers from relevant processes (Winkler & Kettunen, 2018).

A business leader for the auto manufacturing company is the Chief executive officer of the company. CEO will deal with all matter including personalization of information system, automation system at the production sector, and plan to keep continue the manual system at the painting process. In general, the CEO will take decisions regarding all processes and execution of processes in the light of identified interest and requirements of sponsors or aligning all processing with the corporate goals.

In the automobile company, some processes are quite complex therefore digitalization and automation of these processes is not possible without an organized matrix. After the identification and selection of a business process owner, the next step is to organize a matrix for the complex processes to be executed at the workplace. In this matrix, the responsibilities of employees and managers will be identified. Moreover, for autonomous projects rollouts will be selected to run. The selected steering committee of the auto manufacturing company includes CEO, head of the production sector, departmental managers, and IT director.

The program director will work in the program management office to accomplish different tasks and activities including resources management plan development and implementation, quality and risk management, and programming monitoring to keep failure rate at a minimum. Selected streams for the program includes rollout management and testing product sector automation management.

In the process model, the next stage is about building a relationship with the suppliers. As all processes are digitally transformed in the organization then this process should be also made advanced. Relationship with suppliers has significant value in the business organization for future success and market capitalization. Tight supplier steering will make business closer to the consumer demands as suppliers represent the actual demands and needs of the consumer based on their interaction with potential customers. Customer relationship building strategies will be developed in the planning stage of the process model. However, the policies will be implemented after the selection of the business owner and matrix development.

Cascade planning is about scheduling and tracking methodology of the automobile company. In the digital transformation, cascading tracking can enable us to understand the complexities of the activities and accuracy of the tasks linked with other principles of the digital transformation. In this stage, project activities will be rescheduled to ensure flexibility of timeframe. Moreover, the tracking system will be used to monitor and control the integrated activities of an automotive company (Karabegović & Husak, 2016; Gorlach & Wessel, 2008).

In the last stages, outcomes of the monitoring and tracking system will be identified and eliminated. Automotive company will find out the alternative solutions after assessment to make processes more beneficial and effective for the organization.   

References of Digital Transformation

Gorlach, I., & Wessel, O. (2008). Optimal Level of Automation in the Automotive Industry. Engineering Letters, 16(1), 141-149.

Karabegović, I., & Husak, E. (2016). CHINA AS A LEADING COUNTRY IN THE WORLD IN AUTOMATION OF AUTOMOTIVE INDUSTRY MANUFACTURING PROCESSES. IV International Congress Motor Vehicles & Motors, 6-8.

Piccinini, E., Hanelt, A., Gregory, R. W., & Kolbe, L. M. (2015). Transforming Industrial Business: The Transforming Industrial Business: The Automotive Organizations. Transforming Industrial Business.

Winkler, T. J., & Kettunen, P. (2018). Five Principles of Industrialized Transformation for Successfully Building an Operational Backbone. MIS Quarterly Executive, 17(2), 121-138.