www.efeso.com

ABSTRACT

As more businesses adopt Industry 4.0, they need to be more agile and set-up the capacity

and cadence required to handle the volume, flow and complexity of information. Digital

solutions, thus, become a necessity as they augment people with more computing power.

Organizations will be left behind unless they make a Digital shift to their processes across the

value chain. Digital tools and systems are a catalyst to business growth and any organization

not having a Digital Strategy on their agenda, is most probably staring at oblivion. Probably,

that is the reason why over 85% of senior business leaders believe that digitalization is a top

company priority (source: Gartner C-Suite Insights 2018-2019).

In the previous KnowBoTs on CDVC, we have explored how a concurrent digitalized value

chain is helping organizations transform their progression journey. Starting with a maturity

assessment based on the CDVC Model, organizations can identify the immense value locked in

silos and then create a progression plan to improve the processes and practices necessary

to move to the next level. Since understanding human behaviour is fundamental to a

successful progression, we discussed the Human Dynamics journey within the CDVC

framework.

In this Knowbot, we explore the Digital proposition in a Value Chain by introducing the ‘D’ in

CDVC, to give a perspective on how companies can plan their Digital Progression strategy. We

also share some digital solutions we are deploying at our clients.

Concurrent Digitalized Value Chain

THE DIGITAL PROGRESSION

KNOWBOT

KnowBoT #5 – CDVC – The Digital Progression 1

Let us think of the digital supply chain of a manufacturing/supply chain setup where data is

the most important raw material. When clean high-quality data passes through various

assembly lines such as data engineering, data storage, data transformation, data visualization,

it becomes an end-product that provides real time information and business insights capable

of making a direct business impact. Digitalization is the use of various technologies that

connect the different domains of the end-to-end value chain. It enables companies to be built

on real-time networks, that can show sales growth and value creation as part of an

interconnected network.

EFESO’s CDVC framework is truly E2E, covering the value chain from customers’ customers to

suppliers’ suppliers and all domains in between. A concurrent progression is possible when all

E2E domains advance their capabilities and performance standards with aligned goals and

synchronized workflow.

The D in CDVC - Digital

KnowBoT #5 – CDVC – The Digital Progression 2

So, what exactly are the real needs of organizations aiming for a digitalized progression? We

believe they should consider three main aspects:

Using technologies to do business differently

Transform Leadership for Change and Progression

Using advanced analytics to optimize the E2E value chain

The foremost challenge is to make the right choices at the start of the digital journey. It is

crucial to invest in appropriate technology as it helps to address the new requirements of

customers or the design challenges from a pure manufacturing and operational excellence

standpoint. As always, there is internal resistance to change, especially in the case of adopting

a new technology or digital solution. The common perception regarding smart machines and

robots replacing human jobs, is a major cause of organizational friction.

Clearly, the leadership will play an important role in not just drafting a digital transformation

roadmap but will also look at effective change management techniques using the Human

Dynamics approach. The vision of a digitally enhanced CDVC Level 5 organisation can be

achieved through a modular-scalable-integrated SMART solution approach. We can help

develop such solutions using advanced analytics augmented by our digital partners. The

ultimate objective is to reach The Golden Level of self-driving value chain, where demand is

automatically predicted and supply is proactively prescribed, to enable a forward-looking E2E

value chain that does not require human touch.

We consider some answers, in the next section, as we discuss the digital progression journey

within the CDVC framework.

KnowBoT #5 – CDVC – The Digital Progression 3

Digital Assessment - Operations Digital Maturity Baselining (ODMB)

Industry 4.0 brings to the table a series of exciting problem resolution and value creation

opportunities. It also requires companies to cope with the underpinning new technological

advancements realising these benefits (IoT, Advanced Analytics, Big Data, AI, etc.). Companies

need to develop their capability to master the rapid pace and navigate the plethora of digital

solutions available depending on company needs now and, in the future, to support the

business strategy. Knowing where an organisation currently stands from an overall digital

perspective is the vital first step in any digital progression acceleration.

FibonacciLab, the EFESO data science company, has developed Operations Digital Maturity

Baselining (ODMB) - a digital assessment tool to understand the current situation and develop

a progression plan. It helps to gauge the systems and capabilities required when engaging in

a digital transformation. Since data and data management are the bedrock to achieving a self-

driving value chain, the assessment involves testing the digital maturity levels through four

dimensions.

1. IT and Digital Architecture is essential for enabling design systems and helps to rate

companies on adoption and penetration of Data & technology architecture, Mobility &

Cloud, Applications, and Advanced analytics.

ASSESSMENT AND ARCHITECTURE TO DIGITAL PROGRESSION

KnowBoT #5 – CDVC – The Digital Progression 4

2. Applied Digital Business Solutions showcases how digital solutions have a strong positive

impact on the success of a business model. Assessment questions include product and

process specific digital tools deployed, data driven approaches and Digital & Artificial

Intelligence strategy.

3. Digitisation of E2E Supply Chain Systems and Processes measures the effectiveness and

efficiency of the businesses using digitalization. Within this dimension, the entire value

chain is assessed for process and horizontal integration, process integration,

manufacturing digitalization and visibility & reactiveness.

4. Organisation Design and HR Digital Maturity ensures that the digital strategy is

considered as a key enabler to creating future-proof organizations. The assessment aims

at covering digital interventions available to measure organization & governance, talent

attraction & retention, people & performance management, thought leadership & assets.

Digital Architecture to support Concurrent Progression

The digital progression for an organization aims at managing and optimizing the end to end

value chain in a concurrent way. In the Concurrent Progression journey, Digital is key to

connecting different domains of the E2E. EFESO has proven capabilities in supporting

organizations’ shape their digital transformation by utilizing our digital architecture that

includes specific solutions for companies at different maturity levels. We call it a Digital Tools

Progression which runs in parallel to the Concurrent Progression in the CDVC Model, helping

companies to attain the Golden Level of a Self-Driving Value Chain, deeply rooted in Artificial

Intelligence, Reinforcement Learning and Intelligent Decision Making. The journey is explained

for the different maturity levels as below:

KnowBoT #5 – CDVC – The Digital Progression 5

Levels 1 & 2 – Baselining and Preparation

Organizations at this level are mostly devoid of a functional digital architecture and still rely

on traditional IT tools to drive their processes in silos. The teams are making initial strides in

data visualization and are trying to create a digital performance management system through

product/information flow mapping. Companies at this level require an Operations Digital

Maturity Baselining (ODMB) assessment to understand domain-specific digital capabilities and

requirements, while also undertaking value chain decisional tree mapping.

Level 3 – Real-Time and Integrated

Out from the silos, organizations at this level can install functional level digitization solutions.

They have a partially connected digital architecture with preliminary data integration and

automation that provides live E2E visibility, traceability and security. A digital form of product

and service portfolio is visible along with vertical integration of processes and data flow.

Certain underpinning technologies such as – Block chain, Internet of Things (IoT) and Cloud is

adopted at this level and organizations can realise the benefits of decentralized governance

and cost savings.

Level 4 – Forward Looking and Predictive

At this level, organizations have an enterprise-wide digital systems installed that boosts a fully

connected digital architecture, robust data management system and the horizontal

integration of data flows E2E. Synchronized demand sensing is possible because the bullwhip

effect is eliminated and collaborative product development and collaborative robotics leads to

improved accuracy and negligible manual intervention. Organizational and HR Digital

capabilities are also enhanced through the seamless integration of IT department with a data-

driven organization.

Level 5 – Deterministic and Prescriptive

Very few organizations are part of the top level of real time networks that boost deterministic-

prescriptive digital tools progression. Technologies such as - Big Data, Artificial Intelligence,

Real Time Analytics, Internet of Things (IoT), Cloud Computing are vastly used throughout the

enterprise and across the E2E value chain. The entire digital architecture is fully integrated to

provide robust, real-time continuous data flow within the organization and autonomously

self-optimised processes with E2E partners. These can be truly called Corporate Digital

Organizations (CDO), having the capability and resources to develop disruptive business

models. Artificial Intelligence, Deep Learning and Intelligent decision-making ensures that

such organizations can automatically predict demand and proactively prescribe supply, to

enable a forward-looking value chain that does not require human touch, also known as The

Golden Level of a Self-Driving Value Chain.

KnowBoT #5 – CDVC – The Digital Progression 6

We have deployed some very innovative solutions at our clients to help them achieve greater

efficiency and effectiveness in their jobs. In this section, we share a few examples of EFESO’s

digital solutions.

Digital Assistant - IBP Smart Cockpit

The Smart Cockpit, a digital assistant, allows smart visibility of the Integrated Business

Planning (IBP) KPIs covering On-Time-In-Full (OTIF) Global Business Performance parameters.

The tool also features an interactive visual assistant called Marc. It uses advanced algorithms,

that are integrated into the system, to guide you towards sublayers of the data lake and to the

drivers that caused the change in the first place.

Bottom line results

Better and quicker decision making

increased responsiveness to critical scenarios

Examples of Digital Solutions and Results

KnowBoT #5 – CDVC – The Digital Progression 7

Predictive Quality Tool

This technology allows to predict the level of non-conformity of each product coming out of

the supply chain. This information, together with the quality performances of the

manufacturing operations from raw material to end-product, are shown in an ad-hoc Quality

cockpit. This is on trial now in the automotive sector.

Similar to the IBP Cockpit, here too we find a self-root cause analysis capability: the algorithm

is able to identify the areas where causes of major issues are located, greatly saving time

spent firefighting problems. In the longer-term, this kind of technology boosts drastically the

continuous improvement work of a plant or manufacturing line.

Bottom line results

Decreased non-conformities

Augmented process control

Preventive quality management

THE AUTHORS

JULIEN BROUCKE

EFESO Value Chain Expert

MASSIMO FANTON

Head of Strategy, Marketing &

Communication at FibonacciLab,

the EFESO Data Science Company

KnowBoT #5 – CDVC – The Digital Progression 8

KnowBoT #5 – CDVC – The Digital Progression 9

Copyright © 2019 EFESO Consulting

“Improving results today, securing results for tomorrow” means achieving tangible business results and

simultaneously developing the capabilities, leadership and culture to continue progressing faster than

competition.

EFESO Consulting brings more than 35 years’ experience and thought leadership, supporting many of the

leading global brands in both mature and emerging markets.

We are a group of over 500 experienced consultants representing 45 nationalities, operating from 35 offices

around the world with a strong presence in Europe, USA, South America, Middle East, Africa and Asia.

Our people bring together hands-on experience and expertise spanning sectors and functional capabilities

and, in an engaging and sustainable way, we partner with our Clients on their progression Journey.

CALL US AT +33 1 53 53 57 00

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